The Advantages and Disadvantages of Tankless Water Heaters

As you strive to conserve energy and lower you energy costs, you might be considering a tankless water heater, also called a demand or instantaneous water heaters. As with any appliance, there are pros and cons to choosing this option.


Are Tankless Water Heaters the Way to Go?

Tankless water heaters are approximately 20 percent more energy efficient than storage-tank models. Instead of using a storage tank, they heat water directly as it travels through the unit, with either an electric element or a gas burner. By eliminating the need for backup storage, they eliminate standby heat loss, saving energy.


Tankless water heater range in price from approximately $800 to $1,200 compared to approximately $300 to $480 for storage tank units. There are also added installation costs for tankless heaters, especially in existing properties. According to Consumer Reports, installation costs for tankless water heaters, including ventilation, electrical outlets and upgraded pipes, increases the cost by up to $1,200 on average, compared with $300 for storage tank heaters.


Tim Carter of AsktheBuilder.com estimates water heating savings of around $9 per month for his home, which totals $108 per year. Using these figures he estimates that it could take more than 12 years for a tankless water heater to pay for itself. Consumer Reports figures estimate a possible 22 years.

Flow Rate

Tankless water heaters offer an endless supply of hot water to the home. Storage tank heaters, on the other hand, can supply only the amount of hot water the tank can hold. The hot water with tankless units, however, is not instantaneous, and it tends to be inconsistent.


Many tankless water heater manufacturers recommend yearly maintenance for their units to prevent water flow restriction due to calcium build up. Some also require the installation of a water softener for a full warranty.