Tankless Water Heater: Pros, Cons, and Is It Worth It?
By EasyToFix Homes Team
Tankless water heaters promise endless hot water, lower energy bills and a unit the size of a suitcase instead of a giant tank. They deliver on most of that, but they are not the right choice for every home. This guide lays out the honest pros and cons so you can decide whether going tankless is worth it for your household.
How a tankless water heater works
A traditional water heater keeps 40 to 80 gallons of water hot around the clock, reheating it all day whether you use it or not. A tankless unit has no storage tank. When you turn on a hot faucet, cold water flows through a powerful gas burner or electric heating element that heats it instantly as it passes through.
Because there is no tank of water sitting and cooling all day, tankless units avoid standby heat loss, which is where most of their energy savings come from.
Pro: lower energy bills
Tankless water heaters are 24 to 34 percent more energy efficient than conventional tank models for homes that use 40 gallons or less of hot water per day. For a typical household, that translates to roughly one hundred dollars or more in annual energy savings.
The savings are biggest in smaller households with modest hot water use. Large families that use a lot of hot water see smaller percentage savings because the unit runs more often.
Pro: endless hot water
With a correctly sized unit, you will never run out of hot water in the middle of a shower again. The heater keeps warming water as long as it flows, so back-to-back showers, laundry and dishwashing are no problem.
Sizing matters. A unit that is too small for your home will struggle when two showers and the dishwasher run at once. A plumber calculates your peak demand in gallons per minute and matches the unit to it.
Pro: longer lifespan and space savings
Tankless units last 20 years or more with proper maintenance, roughly double the 10 to 15 year life of a tank heater. They also mount on a wall and free up significant floor space, which matters in small utility rooms, condos and apartments.
Many units also qualify for federal tax credits and local utility rebates, which can offset part of the higher purchase price.
Con: higher upfront cost
A tankless unit plus professional installation typically costs two to three times more than replacing a conventional tank heater. Gas models may also need a larger gas line, a new venting system or an electrical upgrade, which adds to the bill.
The payback period through energy savings is usually 6 to 12 years depending on your hot water use and local energy prices. If you plan to move within a few years, you may not stay long enough to break even.
Con: yearly maintenance is not optional
Tankless heaters need to be descaled, flushed with vinegar solution, about once a year, more often if you have hard water. Skip this maintenance and mineral buildup will choke the heat exchanger, cut efficiency and can void the warranty.
A plumber can do the flush in about an hour, or you can buy a flush kit and do it yourself. Either way, budget for it as an ongoing cost that tank heaters largely avoid.
Con: the cold water sandwich and flow limits
Because the unit heats water on demand, there is a short delay before hot water arrives, and you may notice a brief burst of cold water, nicknamed the cold water sandwich, when the heater cycles. A recirculation pump solves this but adds cost.
Flow rate is also finite. A single unit can only heat so many gallons per minute. Homes with high simultaneous demand may need two units or a larger commercial-grade model.
Is a tankless water heater worth it for you?
Go tankless if you plan to stay in your home for 10 or more years, want to cut energy waste, need to free up space, or are tired of running out of hot water. Stick with a tank if your budget is tight, your household uses very little hot water, or you have extremely hard water and will not keep up with yearly descaling.
Either way, have a plumber size the system for your actual usage. An oversized or undersized unit, tank or tankless, wastes money every single day.
- Estimate your peak hot water demand in gallons per minute.
- Get quotes for both tank and tankless, including any gas or electrical upgrades.
- Check federal tax credits and your utility company for rebates.
- Factor in yearly descaling if you have hard water.
When to call a plumber
Call a plumber for a proper sizing calculation before you buy anything, and for installation in all cases. Gas tankless units involve gas lines, venting and condensate drains that must meet code, and even electric models need correct wiring and breaker sizing. Professional installation also keeps your warranty valid.