What Are The Pros and Cons of a Tankless Water Heater?

Which is better a hot water heater or tankless system?
Written by Steve Bates

Are Tankless Water Heaters Worth It?

First thing most folks look at is the price on the sales tag. But the initial costs don’t take into account long-term savings. For buyers, value for money over a longer timescale needs to be considered when we talk about anything ‘being worth it’.

So, if you’re struggling to justify the upfront expense of a more expensive but modern, on-demand, tankless water heater vs. a traditional, tank-based water system, I’ve got you covered.

Unfortunately, many families who suffer a water heater breakdown or burn out are forced to make this decision. Or, perhaps, you’re planning to buy a new property and need to make the choice about your hot water requirements. It can be a rather stressful time, especially those under financial strain.

“Do we go for the cheaper system that needs replacing more often, or a more expensive one that lasts a quarter of a century?”

This question is never pleasant; but a decision must be made, otherwise you’ll be stuck with cold water forever.

This article covers the pros and the cons of purchasing a tankless water heater. So you can make an informed decision regarding your water-heating needs. There are many arguments in both directions, but it will become very clear which is the right choice for you.

Four key factors to consider before buying

  • Family Size
  • Number of Bathrooms
  • Annual Water Usage
  • Budget

To begin on a positive note, we’ll start to talk about the pros of these on-demand tankless systems. But these reasons should always be taken with a pinch of salt. You should always compare each and every advantage with each and every disadvantage to ensure you balance out your thinking. Then you will ultimately reach the correct decision based on your circumstances.

We also take the full cost of each into account, for anyone who is struggling financially in these times. As installation costs for some systems can be prohibitive. Do you save money now, but plan for larger ongoing bills? I understand it’s a tough choice and not one to be taken lightly.

The Advantages of a Tankless Water Heater

This section covers all the positive aspects of a tankless water heater. Remember, balance these out with the cons, to ensure you make the correct decision.

Instant Hot Water

This is a no-brainer. A tankless water heater can deliver instant hot water to you and your family. No need to huddle in the shower, out of the cold stream of water, praying for your traditional heater to warm up quickly.

As a result of the way that these more modern, tankless water heaters are designed, you can enjoy instant hot, at your desired temperature at the turn of a dial.

This tends to be the main reason people switch to a tankless water heater.

Increased Energy Efficiency

A tankless water heater is much more energy efficient than a traditional tank-based water heater – generally speaking, at least. In fact, some are up to 50% more efficient than a traditional water heater, and for a cash-strapped family, that could make a huge difference.

This is also great if you’re somebody who finds recycling exciting. Or are concerned about climate change and reducing energy use. Yes, a tankless water heater is actually more friendly for the environment. And that’s fantastic!

With greater energy efficiency, you may even end up paying less on your energy bills, whilst still supplying your household with the hot water they need.

Lasts Longer Than a Traditional Tank System

The third pro of purchasing a tankless water heating unit is that it actually lasts longer. Much longer than a traditional heater.

What do we mean by this? Well, a traditional water heater needs replacing – on average – every ten years or so. That’s great, but why would you burden yourself with replacing an entire water heating unit every ten years? When you can purchase a tankless water heater and only have to replace it every quarter of a century?

Tankless water heaters are less susceptible to damage, and need replacing less often. And that’s a huge pro. Especially if you’re a cash strapped family; or you just like to not waste your precious earnings.

Think about it this way – you’re deciding between a traditional water heater and a tankless unit. You can either take the option which doesn’t provide you with instant water, is incredibly inefficient, costs a lot to maintain and needs regular replacement. Or you can take the more modern, tankless option and have a water heater that provides your family with instant hot water. Heated at much greater efficiencies and lower costs, and that only need replacing once every 25 years.

Doesn’t that sound like a big plus to you?

Leaves You With More Storage Space in Your Home

Traditional tanks occupy an entire closet. They take up an absolutely tremendous volume of space – space that could be used to store other things in.

By purchasing a tankless water heating unit, not only will you benefit from the spike in efficiency, the lower running costs, the instant hot water and the greater durability. But you’ll also suddenly discover you have more space where you live.

And I think you’ll agree – who doesn’t love suddenly discovering they have more storage space than they initially thought?

If you’re somebody using external storage solutions such as rented garages or expensive rented storage units, you could save money there, too, by simply finding more space in your own home.

Safer for Your Family

Hundreds of people worldwide die or are injured every year because of exploding or leaking traditional water heating solutions.

Tanks that heat and re-heat are especially prone to pressurization if not installed correctly. And yes, it’s common for them not to be installed correctly, which is highly unfortunate in many cases.

This is a common cause of house fires and gas explosions.

By simply switching to a more modern, tankless water heating unit solution, you entirely eliminate the risk of an exploding tank altogether. How? By simply not having a highly pressurized tank!

A Tankless Water Heater Saves You Money

A tankless water heater is much cheaper in the long run than a traditional water heater. As described above, greater energy efficiency means that you’ll end up paying less on your energy bills.

However, it’s important to take into account the initial upfront cost, which, as discussed in the ‘cons section below, as this also factors in.

So again – if you’re a cash strapped family, purchasing a tankless water heating unit can actually save you a lot of money in the long run, especially if you’re going to be living in the same property for a reasonably long period of time.

The Disadvantages of a Tankless Water Heater

Nothing is perfect. And there isn’t a solution that is ideal for everyone. So let’s move onto the cons of owning a modern, tankless water heating unit. As stated before, ensure that you balance these out with the positives, depending on your own situation and circumstances.

Inconsistent Water Temperatures

This is a common complaint with those who purchase tankless water heaters.

Unfortunately, as with anything that brings huge positives, also come some rather unpleasant negatives.

Depending on the temperature outside and the temperature of your home at any given time, the temperature of the water from a tankless water heater can be varied.

For most people, this won’t be much of a problem, as most can get on in any temperature of water, so long as it’s warm enough not to give them the chills. But if you’re somebody who likes the idea of sizzling hot water hitting your back in the shower, then a tankless water heater may not be for you.

Higher Initial and Setup Costs

As covered in the pro’s, running a tankless water heater is actually cheaper in the long run than a traditional option. However, as with anything, there is a catch.

The initial cost of a tankless water heater is usually significantly higher than that of a traditional tank-based water heating unit. If you’re cash strapped, this may be a barrier for a buyer.

However, many retailers of tankless water heating units actually provide financing options, as they understand that this option, for many families, is ideal.

Buyers should also consider the setup costs of such a water heating unit. If a property has always had a traditional water heating unit, you may need to make highly significant changes to it, which can cost a lot.

Also, you will find that the installation of such units requires greater skill, and therefore the labour required may cost you more.

A Limited Hot Water Supply

It’s no ideal for a large family. If your household has more than one bathroom. Or timing has it that somebody is usually washing the dishes or using the dishwasher at the same time as somebody is using the shower, a common tankless water heating system may not live up to the hype.

When multiple outlets are using hot water, the unit probably won’t be able to keep up and provide this much hot water to all outlets.

For this reason, you should think twice about purchasing a tankless unit. However, if your family take showers consecutively and not simultaneously, it may still be the perfect solution for you.


In short, it depends on your needs. There isn’t one perfect solution. Although for many people an electric tankless system is optimal. Due to it’s combination of safety, longevity and energy efficiency.

But in addition to the initial and ongoing costs, the layout of your home and electricity or gas supplies also have to be factored in. Which means that for some folks, their home’s electrical system might not be able to accommodate an electric water heater. For others, depending on geographic location, gas or propane may be better.


Source: https://www.energy.gov

Tankless vs. traditional water heater life expectancy: Regular water heaters typically last 10-15 years. Tankless, if maintained properly, can last 20 or more.

Cost of tankless water heaters vs. regular water heaters: Tank water heaters typically cost less than tankless water heaters. Consumer Reports found gas or electric tankless heaters ranged from $600-$1,300 compared to regular storage tank models in the $300-$600 range. Additionally, the report noted that tankless models had higher installation costs. This was due to the need for electrical outlets, upgraded gas pipes and a new ventilation system.

Potential energy usage of tankless vs. tank water heaters: When comparing water heaters, it’s important to note that storage tanks have some standby heat loss; water cools as it’s held in the storage tank until use. That requires the heater to periodically heat it, even when it’s not actually being used. In contrast, tankless heaters don’t have this additional energy spend since no water is heated until it’s needed.

Energy Efficiency = Saving you $$$

Tankless heaters can be 24-34% more energy-efficient than regular water heaters for households that use 41 gallons or fewer of hot water daily.

Tankless heaters can be 8-14% more energy-efficient for households that use around 86 gallons daily.

Installing a tankless heater at each hot water outlet, Energy.gov says, can increase tankless water heater energy savings by up to 27-50%.

ENERGY STAR estimates that a typical family can save at least $100 annually in tankless water heater energy savings by using an ENERGY STAR-certified tankless heater.

Do you go for a tankless or tank-based water heater? That’s your choice. Check out more of the guides on this site and I’ll try to help you decide.

About the author

Steve Bates

Hi, I'm Steve and I currently reside in Chicago, Illinois. Although for most of the last 20 years I was a partner in a HVAC company down in Austin, Texas.

I understand the frustration involved with dealing with water heater repairs and replacing or upgrading to a new, more efficient model.

My aim is offer some basic advice on fixing home hot water systems. And if a repair isn't possible, then to make the process of selecting a new water heater – be it gas or electric - as simple as possible.

So that you can save money and have a safe and reliable hot water system in your home for many years to come.