Tank vs Tankless Water Heaters

A water heater is an integral part of every home, but with the recent rise of popularity in different styles of water heaters it can be difficult to know which water heater is the best choice to install in your own home.

We’ll be comparing the features of tank water heaters to the newer tankless models to give you all the information you should consider before investing one way or the other.

Rinnai RU98IN review

tankless model




tank model

Upfront Cost

When it comes to the cost of the standard model, it’s clear that a tank based water heater is a much smaller investment than a tankless model. The average tank heater tends to cost between $500-$700 with some outliers priced at $1000 or over.

In comparison, the cost of a tankless unit starts at $1000 and only climbs up from there. It’s important to note that these prices are in USD and are specifically for natural gas consuming models as this is the most common heating method used in North America.

Looking at electric water heaters there is a smaller price gap with tank models going for $300-$500 and tankless units going for $300-$750.

Installation and Storage

Tank based water heaters have long been the standard and many homes have been built with these units in mind. Installing a tank water heater will be both simpler and cheaper financially but it does come at the cost of physical space.

Tankless water heaters are often wall mounted units and take up very little space as a result.

If you’re a DIY expert then you might be able to get away with installing a tank water heater, but the process for a tankless unit is more involved and best left to professionals which will definitely cost more.

Energy Costs

The use of energy is where the bulk of expenses occur when it coms to water heaters. TO understand which type of water heater uses less energy to run it’s important to understand exactly how each type of heater use that energy.

A tankless unit comes equipped with a flow sensor which detects when water is passing through and then turns on the burner as needed. This means that the heater is only ever using energy when you’re using water.

The downside of this method is that the heating process has to occur almost instantaneously and thus the heater is eating up a large amount of energy in the time it is running.

A tank model is designed to keep the water held inside of its tank above a certain temperature level. The tank itself is designed to retain heat for as long as possible but it will still lose heat throughout the day and the burner will turn on each time the water needs to be brought back to temperature. The burner in the tank unit doesn’t need to burn as hot as it would in a tankless model but it is being used consistently throughout the day which is where the majority of its energy consumption comes from.

Overall, the tankless model has the potential to save you money on your energy bills but this is dependant on how often you use your water and the higher upfront cost means that it may take some time for these energy savings to actually pay off.

High Volume Demands

If you’re in a house where many people are using hot water at the same time, then it may be wiser to invest in a tank unit.

A tankless unit is great for providing an almost endless supply of hot water to a single endpoint, but if several people are showering at the same time, or washing the dishes, or doing laundry then a single tankless unit is going to have trouble keeping up which will result in water coming out at lukewarm temperatures. This problem can be mitigated by having multiple tankless unit although this is a costly solution.

On the other hand, tank units have a reserve of heated water that is specifically built for being drawn on by multiple sources at any given time. It is possible to empty the tank and be left with cold water but this problem should only occur in sever cases assuming you’ve purchased an appropriate tank size to start with.


Consumerreports.org did a long-term study of tankless water units in which they determined that tankless units may require more hands-on care than their tank equivalents. People in the industry recommend servicing your tankless unit once a year and the cost of this annual check-up can really add up.

The researchers at Consumer Reports spent $334 on special parts and professional help in maintain their unit.

Tank based units are comparatively cheaper to maintain.


Both units have clear advantages and disadvantages.

The tankless models have a high upfront cost especially when considering installation and maintenance, but they do have the potential to cut costs on your energy bill with some people reporting a savings of $80 a year or more.

The tankless unit also takes up much less space than the conventional tank model and it has a much more modern look.

The tank unit has the benefit of being cheap upfront and more capable of handling high-demand scenarios.

The tankless model seems more suited for smaller homes and smaller groups of people whereas the tank model is designed to handle large homes and large families. Ultimately, you decide what method is best for your home, and now you have the information to properly make that decision.

Check out Tankless Water Heater Reviews

Enable registration in settings - general
Compare items
  • Total (0)