Tank vs tankless water heater: how to choose

Storage tank water heaters

The most common type. A tank keeps a reservoir of hot water and releases it from the top of the tank when a hot tap opens, the Department of Energy explains. They are simple and handle several taps at once up to the tank’s capacity, but they keep reheating water whether you use it or not. DOE puts their life at about 10 to 15 years.

Tankless (on-demand) water heaters

A tankless water heater heats water only as it is needed, which DOE says eliminates standby heat loss: cold water runs through a heat exchanger where a gas burner or electric element heats it. DOE figures:

• For homes using 41 gallons or less of hot water a day, tankless units can be 24 to 34 percent more energy efficient than storage tanks.
• For heavy users – around 86 gallons a day – the gain is 8 to 14 percent.
• Most are expected to last more than 20 years.
• They typically deliver 2 to 5 gallons per minute; gas models produce higher flow rates than electric ones.

The catch is flow. DOE notes that running a shower and a dishwasher at the same time can push a tankless heater to its limit in a large household. Some homes use two units, or one per bathroom.

Heat pump water heaters

A heat pump water heater works like a refrigerator in reverse, pulling heat from the surrounding air into the tank, as ENERGY STAR describes it. DOE says they can be two to three times more energy efficient than conventional electric water heaters, and ENERGY STAR says certified models use 70 percent less electricity than a standard electric model to make the same hot water. They need room: DOE says the space should stay between 40 and 90 degrees F year-round and advises at least 1,000 cubic feet of air space around the unit. They also cool the room they sit in and need a condensate drain.

Questions that decide it

• How much hot water do you use at once? Big households with simultaneous showers lean toward a larger tank, a heat pump tank or a high-flow gas tankless unit.
• What fuel do you have? Gas tankless units often need a larger gas line and new venting; electric tankless units can need a big electrical upgrade.
• Where will it go? Heat pump water heaters need space and the right temperature; tankless units free up floor space.
• How long will you stay? Longer-lasting units pay back over more years.
• Incentives. Utility rebates and federal or state programs change often – check your utility and energystar.gov for what applies now.

Getting it installed right

Ask any plumber quoting the job: how they sized it (gallons per minute for tankless, first-hour rating for tanks), whether the gas line, venting or electrical service needs upgrading, whether a permit is included, how the relief valve and expansion tank will be handled, and what maintenance the manufacturer requires. DOE suggests that gas tankless models use an intermittent ignition device rather than a standing pilot light. Our hiring guide has the questions to ask every plumber.