Tankless Water Heaters vs. Tank 
Which type is Better
(updated 2020)

Compare tankless water heaters vs. tank type and find the differences, advantages, disadvantages, and benefits to select the best water heater for your home.

Either you are building a new home or making improvements in your existing home due to a growing family, and thinking about buying the right size of a water heater, this article will help you choose the right type: tankless or tank-type.

There are several factors that will determine which type and model to get, and it depends on your family size, costs, efficiency, water usage, reliability, space it occupies, durability, warranty, and other more or less essential elements.

Benefits of tankless water heaters vs. tank-type

Tankless

Tank-type

Water heaters can be a costly investment, and you will be living with one for many years, so choose wisely. Here are some important factors to consider:

Save energy. Most of the tankless water heaters are energy efficient, while from the tank-type only some are. The efficiency goes from 0.82 for the non-condensing tankless to 0.96 for the condensing water heaters, where the best models such as Rinnai RUR199 and Takagi T-H3 can provide the highest savings and lowest emission.

Tankless heats water on demand, so there is no need for storing water and heating when not need it. If you buy a model with the recirculation pump, such as any model from the Rinnai RUR series, hot water is available instantaneously, so no more waiting for a warm shower. And no more energy and water waste.

As hot water is heated on demand, it is supplied in a continuous flow with no interruption (as long as you have water, electricity, and gas). Sometimes, when other applications are running at the same time, you might notice temperature fluctuation, but if you buy a tankless such as Rinnai or Takagi mentioned above, your comfort won’t be compromised, and you will be happy.

Save money. Since most tankless water heaters have high energy factors, and as the condensing models use exhaust gases to preheat water and therefore reduce energy loss, it is evident that tankless save you money. The Rinnai manufacturer states that savings are approximately 40% when compared to gas, or even more when compared to electric tank-type models.

As per Rinnai manufacturer , annual operating costs for one standard 50-gal tank-type heater are around $300 while for tankless around $200. In general, you could expect savings from 30-70%, depending on your usage habits and energy price. Savings are even greater with households with larger families or higher demand.

According to energy.gov, tankless heaters can be 24% to 34% more efficient than the tank-type.

You can use this calculator from energy.gov to see what the energy costs will be for electric and gas water heaters.

Save space. Tankless are small, while tank-type water heaters are large. For example, the size of Noritz NRCP1112 is approximately 28” X 18” X 9” while tank-type models, with the standard dimensions, come in sizes of 63” in height and 21” in diameter, and around 50 lbs vs. 140 lbs in weight. Due to small and compact sizes, tankless are wall-mounted that offer easy handling and flexible installation.

As you can see, tankless save a lot of floor space, which can now be utilized for some other use.

New vs. old design. Water-storage tanks are bulky and not attractive that deserve spots somewhere behind the door and in a designated room. Tankless are modern, sleek, look nice, and can be installed even in the kitchen or a bathroom. At the same time, tankless are much more advanced. They have many sensors, a built-in computer, a user-friendly control panel, a remote controller, and advanced electronics for safe, reliable, and precise control. Tank-type heaters are mostly forgotten in our basements and utility rooms until something happens.

Durability and warranty. What would you rather pick; a 15-year warranty or 10-year warranty, over 20 years lifetime or 10 years? Yes, tankless can last pretty long, and what is important is that you can replace any of its components. According to the Noritz manufacturer, nearly 3 of 4 tank-type water heaters fail due to tank bursting or leaking.

How to select – Sizing tips

Tankless water heaters are selected based on the water flow in gallons per minute (GPM). You need to determine the maximum number of devices you want to run. Other important factors are the required temperature rise, which depends on the temperature of incoming groundwater and set temperature output.

When selecting a tank-type heater, check out the first-hour rate, recovery rate, both in gallons per hour (GPH).

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Feature highlights – Side by side

Tankless

  • Modern and advanced
  • Continuous supply
  • Fresh water
  • Higher efficiency
  • Small
  • High initial cost
  • Low operating cost
  • Need electricity
  • Self-diagnostic
  • Low emission
  • Rebates and grants
  • Warranty 10-15 years
  • Lasts over 20 years

Tank-type

  • Old technology
  • Capacity is limited
  • Stagnant water
  • Lower efficiency
  • Bulky
  • Low cost
  • Higher cost
  • No electricity required
  • No diagnostics or simple
  • Some models
  • Some models
  • Warranty 6-10 years
  • Lasts up to 10-15 years

When the tankless is the right choice

  • You have a large family or people staying often
  • If you often run out of hot water
  • Gas bills are too high
  • If you have a smaller home where every inch of the floor space counts
  • You are away from your home often
  • If you prefer a greener choice

When the tank-type is the right choice

  • You are on a budget
  • If your household is not too big (demand is not too high)
  • You are generally at home during the day and will be using hot water often
  • You have a dedicated room for a water heater, such as the basement, utility room or garage

Price comparison

According to Home Depot tank-type waters that are powered by natural gas or propane can cost you between $900 and $1300 while the installation cost is between $1000 and $3000.

The price of tankless with the installation and material can cost you between $2000 and close to $6000. Again this is an estimation from homedepot.com.

An average price for a storage water tank is around $1000 or higher for condensing models. According to homeadvisor.com  the installation cost is from $800 to $1500, depending on how much your plumber charges.

The price range for gas tankless goes from $600 for non-condensing to over $2000 for condensing models, while the average installation cost is around $2000.

Are tankless water heaters better than a tank-type?

As we can see from the above article, there are many advantages of tankless water heaters over the tank-type, because it outperforms a tank-type in almost every way. Plus, tankless heats water on demand so there is no standby heat loss, water is delivered in endless supply and with the superior energy efficiency.

For those who would prefer a simple design, lower cost, proven technology, wide and established service network, and would like to have hot water no matter of the required water flow, get a tank-type.

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