Tips & Resources
A new water heater for your home is a substantial investment and choosing the right one is a decision you will live with for years. Whether you are replacing an old water heater or choosing what to install in a new home, knowing your options is an important first step. Start by determining which type of water heater is best for your situation: tank (storage) or tankless (on demand). Each offers benefits and trade-offs. The main considerations are cost, efficiency and longevity.
As the name implies, tank water heaters work by storing water (typically 30-50 gallons) in an insulated tank and heating it continually so it is ready when you turn on the faucet. As the water is used, fresh water refills the tank and is heated.
Tankless water heaters do not store water. Instead, when needed, high-powered burners heat the water as it passes through a heat exchanger on its way to the faucet.
A tankless water heater is significantly more expensive to purchase initially, both for the unit itself and for the installation, particularly if you are replacing a traditional water heater with a tankless system. However, a tankless system will cost less over time, both in lower energy costs and replacement costs. Tankless water heaters can last twice as long as a water heater with a tank.
Tankless water heaters are more energy efficient because instead of continuously heating a large amount of water (whether it is used or not), the tankless system only heats the water as needed. How efficient the water heater is varies based on the amount of water used. For less than 41 gallons per day tankless systems are 24-34% more efficient than tanks. That percentage drops with more water used, but efficiency still remains greater for tankless water heaters. Homes that use natural gas will save more over those that use electricity to heat water.