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Tankless Water Heaters vs Tank Water Heaters

A Black Diamond technician checking a tank water heater in a local home

Whether you’re currently looking to replace an old water heater or equip your new home, it’s important to weigh the pros and cons of all available options. While cost is one of the main variables you’ll need to consider, efficiency and longevity are just as critical — after all, these two factors will impact cost across time.

The best way to decide is to stack your two core options side-by-side. In your case, is it best to invest in a tankless water heater or is a tank water heater your best option?

The answer to this question isn’t necessarily black and white, as there are many factors to consider, including your budget, available space, and daily hot water needs.

If you’re ready to invest in a new hot water heater or upgrade your current system, here’s what you need to know.


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Tankless Water Heater vs Tank Water Heaters — Which Is Best?

If you’re ready to invest in a new water heater, it’s important to weigh your options.

While storage tank water heaters are by far the most common, tankless water heaters are slowly gaining popularity — and for good reason.

So, what is a tankless water heater and how does it compare to storage tank water heaters?

Tankless water heaters are essentially “on-demand” water heaters, producing hot water only when you turn on a faucet or appliance that calls for hot water. This results in greater efficiency, offsetting the average U.S. home’s second-highest utility cost.

When hot water is needed, high-powered burners rapidly heat water that flows through a heat exchanger, delivering it to a faucet, shower, or appliance without needing to store it in a tank. In comparison, a tank water heater typically holds between 30 to 50 gallons of water. These tanks generally use natural gas or electricity for their fuel source.

While focusing on efficiency, according to the U.S. Department of Energy, tankless water heaters can be between 8 and 50 percent more energy-efficient than storage tank water heaters. However, the overall efficiency depends on how much water you use. In homes that use 41 gallons or less of hot water daily, tankless water heaters can be between 24 and 34 percent more energy efficient than their storage tank counterparts. However, if you use a lot of hot water daily (i.e. around 68 gallons), you will benefit by an additional 8 to 14 percent.

If you’re most concerned with the cost difference between tankless and tank water heaters, know that a tankless water heater will cost you more upfront. However, they last longer. On average, a tankless water heater will last 20+ years (in some cases, 30 years), compared to a storage tank water heater, which lasts only 10 to 15 years. In addition, those who place tankless water heaters at each water outlet receive energy savings of 27 to 50 percent.

Please note: “Hard water” areas can reduce the lifespan of both water heater options.

Pros and Cons of Tankless Water Heaters

While focusing on the advantages of tankless water heaters, you will benefit from:

  • Greater longevity compared to a storage tank water heater (often double the expected life of a storage water heater)
  • A more compact option, which can be hung out of the way (i.e. on a wall)
  • Cost savings across time (if gas-fired, you can save over $100 annually the longer your tank remains in service)
  • Instant hot water whenever you need it (unlike a storage tank water heater, which takes longer to heat, you will not need to wait even 15-25 seconds for your water to become hot)
  • The option to install your water heater outside of your home

If you do decide to invest in a tankless water heater, there are gas and electric options. Gas-fired tankless water heaters produce a higher flow rate than electric alternatives.

So, what about the drawbacks of tankless water heaters?

  • A higher initial price tag, which isn’t ideal for those on a tight budget
  • Must be used in the right application, as this option can restrict water flow
  • Doesn’t work as well in cold weather climates
  • If you’re replacing a storage tank water heater, installation can be costly (the process can be rather complex when aiming to relocate existing piping)
  • You cannot take a shower and do laundry at the same time or run two showers and expect the same output of hot water in terms of an optimal temperature

Pros and Cons of Storage Tank Water Heaters

To compare, here are some of the reasons why a storage tank water heater remains an attractive choice for some homeowners:

  • Since storage tank heaters are simpler in terms of how they operate, this often results in less costly maintenance and repairs
  • They cost less initially, which is beneficial to those on a strict budget

Now, for the disadvantages:

  • Higher utility bills which can offset the initial cost-savings associated with the unit itself
  • This is because storage tank water heaters heat and then reheat water to a pre-set temperature, regardless of what your hot water needs are
  • They also work harder during the winter months, driving up electric or gas bills
  • They occupy more space due to their size
  • They need to be replaced more often than tankless water heaters (twice as often as tankless options on average)
  • Higher probability of flooding, as these tanks can self-destruct when they reach the end of their life cycle

What Option Is Best for Me?

At the end of the day, both options offer advantages and disadvantages. Choosing the best option for you and your household will depend on a number of factors.

To make the best possible decision, it’s important that you understand how each system works, and more importantly, what that means for you and your hot water needs.

If you’re investing in a water heater for the first time (i.e. in a new build), a tankless water heater is an attractive choice. Yes, it will cost more upfront. However, based on this option’s efficiency and longevity, it is actually more cost-effective long-term. This is also the best option if you are space-limited.

If you’re making the switch from a storage tank water heater to a tankless water heater, know that this is not always a straightforward swap. Since this avenue requires a plumbing retrofit, as well as possible upgrades to your gas or electric service in terms of capacity, installation can be costly. This is something that can be discussed directly with your local expert plumber.

In the case of large family households, a tankless water heater is ideal, as you will be able to get as much hot water as you need. In comparison, a storage tank will only provide hot water for approximately three showers in a row. If your family members need to shower one after the other, the fourth person will need to take a cold shower.

Simply put, a tankless system is considered to be the best solution long-term, especially if you:

  • Plan on being in your home for years to come, so that you can enjoy a return on your investment
  • Have a large family as “on-demand” heaters don’t run out of hot water
  • You are away from home often, as you will not be paying to heat water you don’t use
  • Own a smaller home and require as much space as possible
  • Would like to follow a more environmentally friendly lifestyle
  • Live in an area where most homes are upgrading to tankless units so that your property remains competitive from a real estate standpoint

In comparison, a traditional storage tank water heater is a sure bet short-term, especially if you:

  • Are on a tight budget
  • Would like a less demanding option in terms of maintenance
  • Are at home often, utilizing the hot water that’s available
  • Don’t plan to stay in your home long-term
  • You have fewer people in your home (the more people you have, the larger the recommended tank size)
  • Have the space to store a larger water tank


Learn More About The 5 Main Kinds Of Water Heaters


Located in the Utah Area and Require Expert Advice?

If you’re a homeowner located in Utah, Black Diamond Experts offers both home and commercial services, focusing on plumbing, electric, HVAC, and draining. Locally owned and operated, we offer 24/7 emergency service. Regardless of your needs, when it comes to the installation of hot water heaters, you’ll require an expert plumber.

Black Diamond Experts has been servicing homes and businesses throughout Weber, Salt Lake, Utah County, Davis, Tooele, and Summit Counties since 2009. Many of our technicians have nearly 20 years of experience in their field, which is why we currently have over one thousand 5-star reviews and have won a number of awards.

We are committed to our community and are available when you need us most. Best of all, we offer financing options to help ease maintenance or repair costs. If you require water heater support, please give us a call today!

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