Comparing a tankless water heater vs a standard tank water heater that is traditionally used in homes is an important endeavor if you’re considering the switch. Tankless water heaters have become increasingly available from numerous manufacturers and plumbers are increasingly experienced in selling and installing them for consumers and enterprises.
A tankless water heater provides on-demand hot water within seconds as it is required. A standard tank water heater on the other hand keeps an amount of water hot at all times inside the tank so it is ready for use. A tankless water heater typically takes up less space and is more energy efficient than a standard water heater.
How Does A Tankless Water Heater Work?
Traditional storage tank water heaters tend to be about 50 gallons in size although it depends on the home’s hot water requirements. It heats water inside the tank to a set temperature and keeps the water hot at all times whether hot water is being used or not. So it anticipates hot water usage by ensuring that the water inside the tank is always hot. When hot water is turned on inside the home, cold water inside the pipes is first expelled and is followed by the hot water from the tank.
With a tankless water heater, hot water is immediately provided on-demand as required. The tankless heater quickly heats water as it passes through the heat exchanger only when a hot water tap is turned on. So if you are not using hot water, none is being produced or heated. In that regard, it’s a more efficient system than a standard water heater that keeps hot water at a consistently high temperature even during periods where no hot water is being used ie. overnight, when the home is empty.
Why Consider A Tankless Water Heater?
- If you have relatively low hot water requirements a tankless water heater may make sense as you only produce hot water as needed, saving on heating costs.
- If you have space requirements, a tankless water heater tends to be much smaller than a traditional tank heater. A decent sized tankless heater is similar to a suitcase in dimensions, taking up around 2 sq feet and weighing 25 lbs – 50 lbs.
- Heating water is usually the second highest energy charge in a home next to heating/cooling the home so it’s possible that a reduction in hot water charges could make a big difference to your wallet.
- If you have remotely located appliances that use hot water (hot tub, bathroom) or have several that use large amounts of hot water than you run simultaneously (dishwasher, washing machine), you might consider more than one tankless water heater as a booster of sorts.
Types of Tankless Water Heaters
Tankless water heaters come in three main types in terms of how they are powered. Each have certain advantages and considerations to be aware of.
Natural Gas
A gas-fired tankless water heater tends to have a higher water flow rate than an electrical one but its pilot light run will typically run constantly which uses more energy. Since it runs on gas it also needs to be properly vented. With a gas-powered heater, the installation costs can be higher if the gas line needs to be rerouted to attach to the heater.
Check for federal and state tax rebates that exist to lower the cost. Gas-powered water heaters are generally more efficient than even electric ones so discounts may be available to help entice you to buy one.
The U.S. Department of Energy estimates that a gas-fired tankless heater will save an average of $108 in energy costs per year over standard water tank heaters.
The tank should be labelled NG for natural gas.
Propane
Some propane models are available that are targeted at smaller homes as well as RVs and campers that have limited hot water usage and are mobile, which would limit the appeal of an electrical or gas model. In that regard, due to the use of a propane tank that needs to be refilled and eventually replaced a propane-powered tankless water heater, it would also appeal to someone who is living off the grid.
Propane tends to be 200% – 250% more expensive than natural gas. Some tankless water heaters are available in both natural gas and propane options and you may find that the energy cost to use propane is around double if not more than the natural gas model.
The tank label should say LP to indicate it is a liquid propane powered tank.
Electricity
An electric tankless water heater means you don’t have to worry about gas lines or propane replacement and vapor venting. Electric tankless water heaters may require you to upgrade your home’s electrical service to accommodate its power requirements so be sure to factor that into the cost, however.
The U.S. Department of Energy estimates that an electric tankless heater will save an average of $44 in energy costs per year over standard water heaters.
Tankless Water Heater Cost
The three main costs of a tankless water heater are the cost of the heater itself, associated installation costs and ongoing energy costs to power each one.
Installation costs will depend on your personal situation and design of your home. Be prepared for extra costs for a gas (venting, gas line), propane (venting) or electric (electrical service) tankless water heater.
Here are some expected costs for the three main types of tankless water heaters in terms of the average cost of the tank itself and the average installation cost (both one-time costs) plus the average expected yearly energy costs to power each one.
| Type | Tank Cost | Install Cost | Energy Cost /Year |
| Natural Gas | $1,000 – $2,200 | $600 – $1,500 | $200 – $600 |
| Propane | $1,000 – $2,200 | $500 – $1,000 | $450 – $1,350 |
| Electricity | $500 – $1,500 | $150 – $700 | $75 – $300 |
NOTE: You can find cheaper tankless heating options but some are point-of-use models that may only be used in a specific room such as a bathroom to heat hot water rather than for the entire house.
Popular Tankless Water Heater Models
Major manufacturers of tankless water heaters include Rinnai, Rheem, Bosch, EcoSmart, Takagi and Navien.
Below is a popular model for each of the major types of tankless water heaters by power type (natural gas, propane, electricity) :
Natural Gas: Rinnai RU199iN Tankless Water Heater: Produces up to 11 GPM of hot water (various models available). Uses up to 40% less energy than traditional storage water heater tanks.
Propane: Rinnai V53DeP Tankless Water Heaters, 5.3 GPM: Similar Rinnai models are available in natural gas too and options exist from 5.3 GPM – 9.4 GPM hot water capacity depending on what you require.
Electric: Rheem 240V Heating Chamber RTEX-13: Offers a hot water flow rate of up to 3.17 GPM. Enables you to heat water in 1°F increments from 80°F – 140°F. This model is 99.8% energy efficient.
Bonus products: Here is a portable tankless water heater option for use in campers and RVs and other outdoor endeavors and a point-of-use model if you need one for a particular use in part of your home ie. bathroom only.
Portable: Hike Crew Portable Propane Water Heater & Shower Pump (propane).
Point-of-use: ECOTOUCH 9KW 240V on Demand Water Heater (electric).
Tankless Water Heater Pros And Cons
What are the advantages and disadvantages of a tankless water heater over a traditional storage tank water heater? Here is a comparison of a new style tankless water heater vs tank water heater traditionally used in homes.
| Tankless Water Heater Pros | Tankless Water Heater Cons |
| More energy efficient than old style water heaters, up to 22% more according to Consumer Reports. | More expensive up front than other hot water heaters including both tank cost and installation/fitting. |
| Takes up far less space than full size water heaters. | You must ensure you get the right size for your needs to avoid having a lack of hot water. |
| Can last up to twice as long as other water heaters, up to 20 years. Tends to come with a longer warranty, too. | Inconsistent temperatures may result if multiple hot water sources are used simultaneously. |
| Hot water supply takes seconds to produce and is generally unlimited. | You may require use of a water softener to get the best use of your tankless heater. |
| Can produce enough hot water to run multiple appliances simultaneously. Some models can produce 10 gallons per minute (GPM) as an example. | Turning down the temperature of your existing water heater and reducing hot water consumption may save more money than a tankless water heater. |
| Can be a good choice for a small dwelling with limited space and limited hot water usage. | Requires yearly maintenance including a possible yearly system flush out debris to maintain the system and warranty. |
Tankless Water Heater Capacity Requirements
How much capacity do you require for a tankless water heater? How many gallons per minute (GPM) of hot water will you require for your personal needs? Before you purchase a tankless product, you need to decide what GPM rating you need.
First, consider how many people are in your household and think carefully about your hot water requirements. If you run hot water applications simultaneously (you regularly run a dishwasher and washer at the same time or have 2 showers running simultaneously) you will need more capacity.
Below is a table that illustrates how much hot water is required per minute for each major home application based on 2010 plumbing standards.
| Hot Water Application | Gallons Per Minute of Hot Water Used |
| Entire Home | Up to 6 GPM |
| Bath | >4 GPM |
| Dishwasher | 1 GPM – 2 GPM |
| Hand Basin/Sink | 0.5 GPM |
| Kitchen Sink | 1 GPM – 2 GPM |
| Shower Head (standard) | 2 GPM |
| Shower Head (low flow) | 1.5 GPM |
| Washing Machine | 1 GPM – 1.5 GPM |
If you are unsure, it’s best to over estimate and go for the next size up to ensure you have enough hot water capacity and don’t constrain yourself.
Summary
Most people don’t plan to replace their water heater. They simply do it on an as-needed basis when their current water heater either breaks or just reaches its life’s end. When your water heater breaks, you go one or two days without hot water and your goal is often to just replace it as quickly as possible and be done with it.
Shopping around for a tankless water heater is your best bet if you’re thinking about getting one. That way you can properly plan and budget and ensure that it makes sense for you.
People who live in small dwellings with limited hot water usage may benefit the most from a tankless hot water tank. Natural gas tankless hot water tanks are available in a wide variety of sizes and natural gas tends to be much cheaper than propane. An electrical tank may suffice if you have no gas line or it’s too expensive to install one.
If you have remote hot water requirements in a particular area of your home, own an RV or camper or live off the grid, a propane tankless water heater may be an option worth considering.