Tankless vs. Tank Water Heater: What's the Difference?

Base of a water heater

When you turn on your sink to wash dishes or take a shower, you probably don’t think too much about the water. All that matters is it heats up and gives you that relaxing shower to relieve the stresses of the day.

A water heater delivers that warm water to you, but there are two distinct types: tank and tankless. Knowing the difference between a tankless vs. tank water heater can have a big impact on your home and your utility bills.

We developed this guide to help you understand, so you can make an informed decision when the time comes to replace your existing water heater.

How a Tank Water Heater Works

Whenever you use hot water in your home whether it is laundry or washing the dishes, it comes from a water heater. The water that enters your home is actually cold.

A tank water heater is used using either gas or electric. A traditional natural gas water heater uses a flame to heat the water and electric used a metal filament.

The tank fills with water, which can be 30-50 gallons, and heats to a set temperature. When you use the water, the tank sends the water to the desired destination and refills with cold water that mixes with the existing water.

If you use a large amount of water for a long shower or bath, then the tank may not be able to keep up with the demand. The tank depletes and refills, but the water won’t be warm. You can suddenly find yourself with a cold shower.

How a Tankless Water Heater Works

A tankless water heater works in a similar way, but without the tank to hold water. Instead, it heats the water on an as-needed basis.

For example, if you decide to take a shower, the water goes through the tankless water heater and is immediately heated to the desired temperature. It maintains the temperature for as long as you shower.

You’ll never run out of hot water in a tankless water heater. This is one of the biggest selling points of tankless water heaters. There are many reasons why tankless water heaters are becoming more popular especially in new constructions.

Tankless vs. Tank Water Heater Costs

Tankless water heaters are more expensive than traditional water heaters, but the cost less to run. You’ll pay between $2,000-$5,000 for a tankless water heater depending on the type you get and the cost of installation.

Tank water heaters can cost less than $1,000, which makes them ideal for people who don’t have a lot of money to spend. Also, if you have an existing tank water heater, the cost of transitioning to a tankless variety will be more than if it’s new construction.

The trade-off is the tank water heater costs more to run than a tankless. It requires a constant heat source regardless if you’re using the water. This means the flame or filament is heating 24 hours a day, 7 days a week.

Tankless only heats water when it’s being used. There’s no need for constant heat element, which means your utility bills are lower.

While the cost upfront is more for a tankless water heater, it can make up for it over time in energy savings.

Tankless Water Heaters Last Longer

Tank water heaters last about 10-15 years, but a tankless can last about twice that. This makes the savings overtime even more apparent. Why are tank water heaters less hearty?

The tank is made of metal and over time the metal can rust leading to leaks and puddling under the water heater. Since the heating elements are on 24-7, they take a lot of abuse over the years. These elements can fail and require replacement.

In fact, when a tank rusts the leaking water can come into contact with the heating elements and cause them to fail.

Tankless water heaters don’t have these problems. There is no tank to rust and the heating element only turns on when needed. When it’s not in use, the unit is dormant. It takes far less abuse than a tank water heater.

Tank Water Heaters Take Up Space

It’s not easy to find space for everything in your home. We accumulate items through the years and they end up packed up in a basement corner. Space is a hot commodity.

Tank water heaters take up a lot of space. A 50-gallon water tank isn’t small. It’s also incredibly heavy, so there’s no moving it around to a better spot.

Tankless water heaters take up very little space, so you can fill your basement.

What Happens if You Use a Lot of Water?

A tank water heater will provide hot water until the heating element can’t keep up with the pace. You’ll notice the water slowly decreasing in temperature until it’s cold. If you’re running the shower, laundry and the sink, then they’ll all have a steady temperature until the hot water runs out.

Tankless water heaters will maintain a constant temperature if you’re taking a shower or doing the laundry, but it may not keep up if several different people are using water at the same time.

If a person runs the shower, sink, and laundry, then the heating element may not be able to keep up with the large amount of water needed. It won’t be cold water, but it may not heat up to your desired temperature.

How Are Repair Costs Different?

We discussed how a tank water heater won’t last as long as a tankless one, but how do they compare when repairs need to be made. A tank water heater isn’t a complex machine. If there is a problem, then it’s usually easy to diagnose and cheap to fix.

In fact, many people can do the repairs themselves without contacting a plumber or HVAC technician.

Tankless water heaters are far more complex. If there is a repair cost, then it’s more expensive than a tankless and you’ll need a professional to repair it.

Choose the Best One for Your Situation

When it comes to tankless vs. tank water heater, the choice depends on your needs and situation. If you don’t use a lot of hot water, then the cheaper tank water heater might be a better investment. If you do use a lot of water or if you plan on living there for the rest of your life, then go tankless.

For more information on tank and tankless water heaters or other plumbing issues, please explore our website and plumbing blog.

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About the Author: Brett Bidwell, Mr. Rooter Plumbing of Austin

Brett has been a trusted Mr. Rooter owner of Mr. Rooter Plumbing of Austin since 2012. With over 8 years to back him, Brett has experience with a wide range of plumbing related solutions and systems. He and his team specialize in emergency plumbing, drain cleaning, and more.