Tankless Water Heater vs Traditional: Know the Difference

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The two common types of water heaters available today are tankless and storage tanks. Each has its own benefits and drawbacks. Knowing the difference between them can help you decide which one to go for based on your needs and circumstances. 

Tankless Water Heater vs Traditional Video

Traditional water heater or tankless water heater? Which one is better for your home or commercial property?

Traditional water heaters have a tank that stores and heats water continuously, and this requires a lot of energy. On the flip side, a tankless water heater heats water on demand when you turn on the tap. This makes them up to 34% more energy efficient. 

The only downside of a tankless system is that they’re generally going to cost a bit more upfront to install. But considering that a tankless water heater can last 20 years or more with proper maintenance, the longevity and monthly cost savings make them a great long-term investment. 

Which water heater would you choose for your property?

Difference Between Tankless and Traditional Water Heaters

Purchase & Install Costs

The buying price of a tankless water heater and the labor costs involved in the installation process are between $1000 and $4000.

Note: Point of service water heater installation may cost you less, but there might be a need for additional plumbing or electrical work that can be pricy. 

You can buy and install a traditional water heater for about $1000-$3000, depending on the size. This includes the labor cost of a plumbing service, which ranges from $250 to $550.

Storage Capacity & Operation

The tankless water heater does not store water. When a hot water tap is turned on, cold water makes it way through a pipe into the unit, and an electica element or a gas burner heats it instantaneously. It can heat 2-12 gallons (depending on the size) of water per minute instantaneously.

Storage tank water heaters are pretty common in homes and have an insulated tank that can hold 30 to 50 gallons of water. When you use it, hot water is drawn from the top of the tank, and cold water enters the bottom to be heated.

Energy Efficiency

Traditional water heaters regularly heat and reheat water to sustain a set temperature, even when not in use. This leads to waste of energy (natural gas or electricity), which contributes to high utility bills.

Tankless water heaters, however, only heat water when it’s needed. This on-demand heating process eliminates standby losses, so they can be 25% to 40% more efficient than storage tank models for homes that use 41 gallons or less of hot water every day.

Space Requirements

Storage tank water heaters require a significant amount of space for the tank. They need to be installed in a place according to the size of the tank, such as a basement, garage, or dedicated utility closet.

Tankless water heaters are much more compact, often comparable to the size of a small suitcase. They can be installed on walls, either inside or outside, which helps you free up valuable space in your home.

Installation Complexity

Tankless water heaters can be complex to install. They may require upgrading your home’s electrical system or gas lines to handle the increased demand for power. Proper ventilation is necessary for gas models. These factors can increase the labor time and the installation cost.

Installing a traditional water heater is generally straightforward. The existing plumbing and electrical or gas lines can often be reused, making the process quicker and less expensive.

Hot Water Supply

Tankless water heaters continously provide hot water, and you won’t run out of it even if multiple appliances are in use simultaneously. However, the flow rate can be a limitation. The water temperature may fluctuate if the demand exceeds the unit’s capacity.

Storage tank water heaters have a restricted hot water supply based on the tank’s capacity. Once the hot water is used, you have to wait for the tank to refill and reheat. This can be inconvenient during times of high demand, such as in the morning when multiple family members wait for their turn to bathe or do other chores.

Tankless water heaters also promote resource conservation. By providing hot water on demand, they don’t need to store and maintain large volumes of heated water. This results in less waste of water, as you’re not waiting for it to heat up before use, contrary to traditional water heaters.


Tankless water heaters usually have a longer life than traditional units. The lack of a tank eliminates the risk of corrosion and leaks, which are common issues with storage tank water heaters. 

Tip: Investing in a tankless water heater can mean fewer repairs or replacements over the years.

Which is Better, a Tankless or a Traditional Water Heater?

Choosing between a tankless and a traditional water heater totally depends on your needs. A traditional water heater is a better choice if you regularly run multiple hot water appliances that use a lot of hot water during the day. It’s easier to install as well.

However, if your household uses less hot water, a tankless water heater, although a bit costly to install, can provide you with long-term energy savings.

How Many Showers Can a Take with a Tankless Water Heater?

Your family members can take many showers in a row with a tankless water heater. The catch, buy one that has the highest GPM (gallon per minute). However, if you use a dishwasher or other appliances that require hot water at the same time, you can still run out of it quickly in the shower.  


Comparing the pros and cons of tankless and traditional water heaters is crucial for choosing the perfect system for your home’s water heating needs. 

If you’re still unsure, contact a professional plumber to visit your residence and check out your plumbing system to help you make that decision for you.