Tankless vs. Tank-type Water Heaters Comparison
Pros and Cons

Compare tankless vs. tank water heaters to choose the best option for an efficient, reliable, and long-lasting water heating in your home.

Selecting the right water heating option is very important, because, as stated by the U.S. Department of energy, gas-fired water tank heaters are the second highest energy consumer, right after the space heating. Between 14% and 25% from the home's annual energy usage goes toward water heating.

Check out how tankless and tank-type water heaters work, what are the benefits, and pros and cons of each type. After figuring out which one is better for your home; tankless or tank, see our recommendation of the best models to buy.

Selecting the right water heater is not an easy decision to make, because the best models are often expensive, while cheaper models usually come with the lowest efficiency and quality and could cost more at the end of its lifetime.


Tankless water heaters

Tank-type water heater

Tankless water heaters

How does it work

Rinnai tankless water heaterRinnai tankless water heater

Tankless water heaters heat water on demand, or per request, and provide hot water in endless and continuous supply.

Tankless does not store water as the tank-type, and since water is heated only when passing through the heat exchanger, heat loss is often minimal.

The tankless unit activates only when a hot water tap is opened and when there is sufficient water flow. When the water flow sensor is satisfied with the required flow rate, the unit activates. Then the heating element on electric heaters or a gas-fired burner of the gas models then starts heating the water, but as long as the tap is open. Water is heated inside the heat exchanger while passing through.

Most of the gas tankless water heaters are equipped with the electronic ignition which is used to ignite the gas burner. The "brain" of the tankless heater is the circuit board, which monitors and controls the heating operation and is used to diagnose the problems and help in troubleshooting.

In gas models, due to gas burning, products of gas combustion are vented out through the venting system, while in electric models, due to the absence of flue gases, vents are not needed.

When the tap is closed, the water flow stops, shutting down the heater.

Either you are buying a point-of-use or the whole-house tankless water heater; you will find many benefits over the traditional tank-type cylinders.

According to the Bosch manufacturer; if you have a tank-type water heater that is more than eight years old, it is time to upgrade it to tankless, a modern and advanced unit that can help you save the space, reduce the energy bills and lower the gas emission.


Tankless water heaters heat water on demand and deliver it in endless supply. Hot water is provided as long as you needed it, so you don't have to worry about running out in the middle of the shower, or during peak hours.

They are ideal for demanding homes and large families. Some models, are capable of delivering up to 11 GPM of hot water, which is sufficient even for homes with up to 5 bathrooms. You can also combine two or more tankless models if the demand for hot water is high.

Tankless are ideal for sites, such as vacation homes, cottages, and cabins, as they operate only when hot water is needed, which is periodical, reducing energy costs significantly. Tankless is also recommended where hot water is required in continuous supply and for remote or distant sinks.

While tank-type works well with recirculating systems, recirculation in tankless is more complicated, unless the unit comes with the built-in feature, such as found in Rinnai RUR98 models. The recirculation feature brings hot water faster to the tap.

Tankless also provide better energy and water savings due to the ultra-high energy efficiency, which can reach high 98%, as found in gas tankless models with the condensing technology. As the tankless does not use the storage tank and water is heated while passing through the heat exchanger, there is no standby heat loss as found in the tank-type.

According to the manufacturers, tankless can save up to 50% on heating costs. This translates to savings of several hundred dollars per year.

Tankless heaters are designed lightweight and compact that come with the size of a small suitcase, making them great for installation on the wall or inside the cabinets, not only indoors but outdoors as well.

There are no problems such as the rotten egg odor; sediment build up in the tank, discolored water and leaking, which is typical in conventional heaters.

Tankless water heaters are equipped with advanced electronics, which allows better monitoring, control, diagnostics, temperature accuracy, consistency, and overall comfort. The temperature control is more accurate, and the power can modulate for greater savings and comfort, so hot water is delivered with a constant temperature.

Some tankless can also use Wi-Fi technology for remote monitoring, diagnostics and management and Alexa voice control commands for added convenience. A great example is the Rinnai RUC98 (sold on Amazon.com).

The low NOx gas burner and pre-mix combustion process ensure reduced gas emission. The advanced tankless models often meet the ultra-low NOx requirements for.

The tankless usually lasts longer. The lifespan is over 20 years. Almost all of the components can be replaced, resulting in reduced waste.

The warranty is also longer. Most of the manufacturer provides up to 15 years while the tank type comes with the 6-10 years.


Buying and installing a tankless will cost you more than the gas tank-type installation. Retrofitting will even increase the cost of installation, mainly when replacing the old tank-type with the tankless in older homes, where the upgrades are required.

While both tank and tankless can work in low and high demanding applications, the minimum hot water flow is required in tankless. So, if you need just a trickle of water, the unit won't turn on. Also, sometimes, you will have to wait a bit longer for hot water to reach the tap.

Frequent "cold water sandwich" or temperature fluctuation could affect comfort.

Tankless are more prone to freezing than the tank-type, while tank-type to sediment buildup.

Tank-type water heater

Tank-type water heaters have been around for over 100 years. They use the proven technology, provide more-less reliable operation, and are covered by the extensive service network.

How does it work

Tank-type water heaterTank-type water heater

Tank-type heaters use the gas burner (gas type) or heating elements (electric type) to heat water that is stored inside the tank. A thermostat controls both. They turn on, only when the temperature of the stored water drops below the set temperature.

When the hot water tap is opened, water is drawn from the top of the heater and replaced at the bottom with cold.

The heater uses the dip tube to deliver water, anode rod, and glass lining to protect the metal tank from corrosion, and safety elements, such as TPR valve to protect the unit from the high pressure and temperature.


The greatest benefits of the tank-type water heaters are the low upfront cost, easy installation, and simple operation.

The tank-type water heater can use a variety of fuels; natural gas, propane, electricity, oil, and solar. Most models are low efficiency, while some, such as Vertex or Polaris are ultra-efficient and condensing, that come with the efficiency of 98%.

Gas models offer several different venting options: atmospheric, direct vent, power vent, and power direct vent, giving you more flexibility. Also, some models do not require electricity to operate.

There is no minimum water flow required.

The tank-type works well with recirculating systems.


The tank-type, no matter does it come with the 20 or 100 gallons, has the limited capacity, so water will eventually run out. If the tank is undersized, hot water is depleted quickly. If the tank is too large, and demand is low, the energy is wasted as the thermostat is trying to maintain the temperature of unneeded hot water. Also, if hot water is depleted fast during the period of heavy use, and recovery rate is not high, there can be a delay in supply.

The tank-type cylinders, due to its big and bulky design, require a designated room and more installation space. That is why they are usually located in the garage, basement, or mechanical room, standing on the floor. They cannot be installed outside.

Tank-type heaters are prone to standby heat loss. With the lower energy efficiency, energy bills are higher as the water is heated and reheated at a pre-set temperature, regardless of your hot water needs.

Water is often not fresh and could often lead to rotten egg odor and sediment buildup issues.

Most of the models have a short warranty of six years.

An average lifespan is between 10 and 15 years.

Notes: Both gas tankless and tank-type heaters require exhaust venting system and air intake.

If replacing a tank with the tankless heater, most of the time gas line and venting system have to be changed or upgraded, to accommodate a new demanding unit.

Both tankless and tank-type water heaters come in a variety of capacities so they can provide hot water from the single sink to the whole house applications.

So which one is better, tankless or tank-type?

If comparing the prices, tank-type heaters are more affordable; no matter is it electric or gas. The average cost of tankless units with the installation can easily reach several thousands of dollars, which is approximately twice as much as the storage tank-type.

Yes, the tank-type models are cheaper, but the operational costs are higher, because the energy efficiency is 60-65% on average, while in tankless, the efficiency is in the range from 85% to 98%. As it can be seen, the energy savings are substantial (30% on average). However, in the case of an emergency, power outage, for example, hot water, which is stored inside the tank-type unit, is still available for some time, while in tankless is not.

When calculating the overall costs of these two types, you should also take into consideration the lifespan of the heaters. It is worth mentioning that the tankless life expectancy is approximately twice as long as the tank-type so that you would buy two tank-type heaters over a lifetime of one tankless unit. Also, if the annual savings are, for example, $100, over 10 years the tankless can save you close to $1000. This isn't even considering the 15-year warranty of the tankless, vs. 6 years of the tank-type, giving you even more savings.

It should also be added, that almost all components in tankless are replaceable so any malfunctioning element can be replaced, which is not the case with the tank-type.

As you see, tankless water heaters, even with the higher up-front cost, are better solution for demanding homes – they have higher energy savings, last longer and can increase the home resale value. However, if you are on a budget and need a quick replacement, the conventional type might be a better solution for you.


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