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Tank vs Tankless Water Heater: Which is the Smart Decision?

tank vs tankless water heater which is the smart decision

If you’re in the market for a new water heater, you may be wondering if a tank or tankless model is right for you. There are advantages and disadvantages to both tank and tankless heaters, so it can be tough to decide which is the best option.  Read on as we look at the pros and cons of tank and tankless water heaters to help you decide which one is the smart choice for your home and family.

Difference between Tank and Tankless Water Heaters

The main difference between traditional tank water heaters and tankless water heaters is, as you may have guessed, the tank. A tank water heater stores hot water in a cylinder storage tank, while a tankless model heats water on demand. Common energy sources for water heaters are natural gas and electricity with some homes using solar or geothermal heat for efficiency.

How does a storage tank water heater work?

A tank water heater has a tank that stores hot water and works on the principle that heat rises. Inside the insulated storage tank is a plethora of inner components that work to heat up incoming cold water. The tank is connected to a cold water supply and a gas or electric heat source. As the cold water is fed into the storage tank the heater starts heating the water. As the water heats, it rises to the top of the tank flowing out of the tank and into your sink, shower, or bathtub when you need it.

How does a tankless water heater work?

A tankless water heater is a type of water heater that doesn’t use a storage tank. Instead, it heats water as you need it. Tankless water heaters are usually powered by gas or electricity and use a powerful heat exchanger to raise the temperature of incoming cold water on demand. When you turn on the hot water, the tankless water heater starts heating the water right away. The heated water then flows through your pipes to the faucet or showerhead at the preset temperature.

Storage Tank Water Heaters

As the most common type of water heater, tank water heaters have a lot to offer most homeowners. There is a wide range of options so let’s outline the pros and cons of a tank water heater for your home.

What are the advantages of tank water heaters?

Tank water heaters have a few advantages over tankless models:

  • less expensive to purchase upfront
  • higher tolerance for simultaneous hot water usage when multiple people shower
  • heats large volumes of water at once
  • simpler to operate and repair

What are the disadvantages of tank water heaters?

However, storage tank water heaters have a few disadvantages that you should be aware of:

  • wait time for heated water to refill
  • lasts 10 to 15 years
  • higher energy bill
  • tank water heaters can develop leaks over time which can cause significant damage to your home
  • tank models need more space in your home

What size tank water heater do I need?

A properly sized tank water heater for your home and life will need to meet the needs of everyone in the household. To determine the size tank water heater you need, you first need to calculate your peak hour demand. This is the amount of hot water your family will use during the busiest hour of the day.

To do this, add up all of the appliances and fixtures in your home that use hot water and multiply each one by its gallons-per-minute (GPM) flow rate. The sum of those numbers will give you your peak hour demand. The Energy Guide Label on your water heater should tell you a capacity or first-hour rating (FHR) or how much water the heater can supply per hour. The FHR should match or exceed your household’s peak hour demand. For instance, if your peak hour demand is 66 gallons then you should look for a tank water heater that meets or exceeds that number for FHR.

Estimated Peak Hour Demand

Here are some basic average estimates for how many gallons each appliance uses:

Shower per use20 gallons
Food Prep3 gallons
Automatic Dishwasher7 gallons
Clothes Washer15 – 25 gallons

How long do tank water heaters last?

Tank water heaters typically last around eight to 12 years, but with proper maintenance, they could last up to 15 years. Tank water heaters need to be regularly maintained by flushing the tank and checking the anode rod to prevent corrosion.

Read Next: How Long Do Water Heaters Last?

How much does it cost to install a tank water heater?

Installing an electric tank water heater costs an average of $2000 to $3500. A gas tank water heater average cost is between $2500 to $5500.

Tankless Water Heaters

Tankless heaters come in two types: point-of-use and whole-house heaters. Point-of-use tankless water heaters are small and only heat water for one area – like a kitchen sink. Whole house tankless water heaters are larger and provide water to multiple showers, sinks, and appliances. There are also condensing and non-condensing tankless water heaters. Condensing tankless water heaters reuse the exhaust gas to further heat the water, reducing heat loss while non-condensing tankless water heaters exhaust most of the excess heat outside.

What are the advantages of tankless water heaters?

There are a number of advantages to tankless water heaters:

  • more efficient because they only heat the water when you need it
  • take up less space than a traditional tank water heater
  • have a longer lifespan
  • less potential for leaking and
  • non-condensing tankless units can be less expensive

What are the disadvantages of tankless water heaters?

There are some downsides to a tankless water heater that you should consider:

  • more upfront costs than a traditional tank heater
  • may require major changes to accommodate the hot water heater such as installing a gas line
  • not as widely available as tank models
  • have a lag time for hot water
  • condensing units can corrode

How much does it cost to install a tankless water heater?

Gas tankless water heaters are more expensive and can start at $8000 and up. 

What size tankless water heater do I need?

This is determined by a number of factors including the tankless water heater’s GPM (gallons per minute) and the temperature rise you need. Calculate the heaviest household water usage and the temperature you want your water to be at. For example, if you are running a shower, a dishwasher, and a faucet at the same time and want to raise the groundwater temperature from 52 degrees to 110 degrees, then you would need a tankless water heater with a flow rate of 6 to 7 GPM.

How long do tankless water heaters last?

If maintained regularly by a professional a tankless water heater can last up to 20 years. Regular maintenance of a tankless water heater is important to prevent mineral and hard water build-up on the heating elements that will shorten its lifespan.

Read Next: 10 Noticeable Signs that Your Water Heater is Going Bad

Gas vs Electric Water Heaters

Both tank and tankless water heaters have a gas or electric option for an energy source. Each type of energy source has its pros and cons:

  • An electric tankless water heater can be cheaper to install because it doesn’t require a gas vent but tends to have a lower flow rate 
  • Gas tankless water heaters have higher upfront costs, requiring ventilation and possibly a gas line installed. They also need more maintenance than a tank water heater.
  • An electric tank water heater have much higher operating costs and longer recovery times (and we don’t recommend)
  • A gas tank water heater heats the water quickly but may have a shorter lifespan than electric

Which is Right for You in the Long-Run?

Now that you know the difference between tank and tankless water heaters, which one is right for you in the long run? If you’re looking for an immediate installation with little to no maintenance, a tank water heater might be your best bet. However, if you’re interested in saving money on your energy bill and having a water heater that will last longer, you might want to consider a tankless heater.

While tankless water heaters have a higher initial cost, they often make up for it in the long run with their energy efficiency. If you’re not sure which option is right for you, be sure to consult with a professional before making your final decision.

Read Next: How Much Does it Cost to Replace a Water Heater?

Water Heater Repair & Replacement in Portland

There are many factors that go into deciding when to replace your water heater and Jacobs Heating & Air Conditioning experts are here to guide you. We carry a variety of hot water heaters so that your home or business has the best and most efficient water heaters around.

Avoid extra costs and fewer repairs by scheduling a maintenance check for your existing water heating system before issues arise. No matter what you need, we’re always just a phone call away.

Whether you are in the market for a new water heater or simply have questions about your current one, Jacobs Heating & Air Conditioning is here to help. We’ve been servicing the Portland area for over 70 years and our experience shows in the quality of our work. Give us a call today!

About the Author

Amanda Jacobs portrait

Amanda Jacobs, Internal Project Manager

Amanda Jacobs is an Internal Projects Manager and 3rd generation member of Jacobs Heating & Air Conditioning. She received her MBA from Seattle University and has worked for a leading HVAC training and consulting firm. When not talking HVAC on the Jacobs Blog, you can find her on the golf course or whipping up her famous vegan chili.