Tank Vs Tankless Water Heaters – A Beginners Guide

Which one is better traditional water heater or the modern tankless water heaters?

This debate has been going on for almost a decade and there never is a clear winner. At the end of the day, it all boils down to your specific needs and which one of these will work best for your home.

The big question is how do you know, which one is the best for your home?

Let’s begin by understanding how different is the traditional tank water heater from the tankless counterpart.

Tank Water Heaters

It is also known as a hot water storage tank or a hot water thermal storage unit and came into being primarily for domestic use.

A tank water heater hot water comes wrapped in heat insulation that ensures the reduction in energy consumption while speeding up the heating process. It also helps in maintaining a desirable operational temperature.

Tank water heaters are normally used for different types of domestic use including bathing, washing of clothes, or even utensils. These water heaters contain inbuilt thermostat controls that help in the regulation of temperature to the range varying from 40°C (104°F) to 60°C (140°F).

In order to understand the benefits you can derive from tank water heaters, it is important to identify the pros and cons.


  • Installation cost is lower: The cost of installing traditional tank water heaters is quite less. The cost is comparatively lesser than tankless water heaters.
  • Low Maintenance: Tank water heaters are low maintenance units. They are easier to maintain and any replacement is inexpensive as well.


  • Utility bill will be higher: One of the biggest disadvantages of traditional water heaters is the high utility bill. This is more so because of the fact that these units keep heating and reheating water at a pre-desired temperature and this is irrespective of your household water requirement. The bills are higher during the cold winter month vis-a-vis summers.
  • Tanks take up space: Traditional tank water heaters can take up a lot of space. It is a bid disadvantage because they cannot be installed outside and hence need to be fitted inside.
  • Fixed water capacity: Traditional tank water heaters are available with a fixed capacity, which is basically dependent on the capacity of the tank. If you choose the right size then your household may face the problem of running out of hot water.
  • Lifespan: Although 10-15 years sounds like a long enough life span but it is not when compared to tankless water heaters.
  • Hard water: One of the major problem areas of concern for storage tank water heating systems is hard water. When hard water passes through the heating tank, a buildup is caused due to the high acidity level and this settles down at the bottom. This build-up largely affects the overall efficiency of heat transfer leading to premature system failure.

Tankless Water Heaters

The tankless water heater is also known as an instantaneous water heater or on-demand water heaters. These devices heat water when it flows through the unit and does not store any water internally.

These units contain copper heat exchangers through which the water circulates and gets heated by electrical heating or gas. The heater contains flow sensors that activate and start the heating process the moment water travels through it.

It also has a negative feedback loop that is primarily used for bringing water to the desired temperature. The modern day tankless water heaters are sleek in design, and come with several functionalities including Digital Thermostatic Control and LED display.

In order to understand the benefits you can derive from tankless water heaters, it is important to identify the pros and cons.


  • Energy Consumption: The salient aspect of tankless water heaters is less energy consumption as compared to the traditional tank water heater. According to a research study, as compared to the traditional storage tank water heaters, these on-demand water heaters are capable of being 24%–34% more energy efficient for households using less than 41 gallons daily and 8%–14% for households using almost 86 gallons a day.
  • Standby heat loss: A tankless water heater is able to avoid any standby heat loss that is normally the case with storage tank water heaters. It is a measure for the overall efficiency of a water heater. Standby heat losses come into play when the heater is required to keep hot water ready or standing in the tank.
  • On Demand: Since the water is not stored in a tank, it is delivered on demand. This reduces hot water wastage.
  • Fits anywhere: This is a big advantage as it can be installed anywhere inside your home. It is mostly used as a Point-of-use (POU) device as well and is placed where the water is being used the most like if you require it in the kitchen then it can be placed there.
  • Life and maintenance: The life of a tankless water heater is almost 20 years or even more and that also without the need for much maintenance. A tankless heating system can be serviced once in a while as a part of regular preventive maintenance so that you benefit from its higher efficiency levels.


  • Higher Installation cost: One of the major disadvantages of a tankless water heating system is the initial installation cost, which can be as high as $4500 depending on the brand and model being installed.
  • Retrofitting costs: Another area that needs attention is the retro-fitting costs.
  • Hot water delivery: Although tankless water heaters are known to deliver hot water on demand, there is a limitation to the amount of water that can be delivered instantaneously as compared to the tank water heater where the amount of water delivered depends on the tank capacity.
  • Longer time: A tankless water heater takes a longer time to deliver hot water as compared to the tank counterpart.


Both tank and tankless water heaters have advantages and disadvantages related to the delivery of hot water, unit cost and installation, and efficiency level.

It is always recommended to identify the requirements of a household on a daily basis before making a buying decision, especially for tankless heaters as they are quite expensive.

Last but not the least, always focus on the long-term benefits as compared to short-term benefits as this will help in buying the right heater for your home.