a conventional water heater on the left and a white tankless water heater on the right with a versus sign in the middle

Tankless water heaters are some of the best appliances for heating water throughout your home. However, millions of people prefer conventional tank water heaters. 

Whether you’re worried about long-term expenses or carbon output, comparing these units side by side is essential.

In this article, we’ll explain why tankless water heaters are more efficient than conventional water heaters, which variant is better, and what benefits water heater tanks maintain.

So, continue reading for everything you want to know about these two water-heating technologies.

Is a Tankless Water Heater More Efficient Than a Tank?

Tankless water heaters are more efficient because they use less energy. Furthermore, they’re less wasteful with the energy needed. Almost 100% of the energy consumed by a tankless water heater is used, whereas water heater tanks only use a portion of the energy they pull from gas and electricity.

Tankless heaters are more efficient than conventional ones because they use over 30% less energy. Therefore, you’ll spend less money in the long run and use less electricity or gas. Further, tankless models last almost twice as long as traditional water heaters.

Let’s take a closer look at each reason tankless water heaters are more efficient:

  • An unlimited hot water supplyAbacus Plumbing states most conventional tanked water heaters only have up to 60 minutes of hot water at a time. Tankless water heaters can continuously heat for as long as you need them, saving you a lot of water and time waiting for it to heat up again.
  • Tankless heaters use less gas and electricity – your utility bill will be much lower, which is the primary reason people want tankless models. They don’t need a lot of power to function–they’re incredibly efficient with the electricity or gas they use (depending on the fuel source).
  • They’re much more financially efficient – tankless water heaters are the way to go if you want to save money. You don’t have to deal with stored water, corrosion, rust, unused energy, etc. These units are the most financially responsible appliances you’ll come across.

Do Tankless Water Heaters Last Longer?

Tankless water heaters last 10-20 years longer than conventional water heaters. They often last around 25 years, making them much better for people who want a long-term solution. In addition, their compact size makes them much less likely to develop metal corrosion and cracks.

Major Energy states tankless water heaters last up to 30 years. On the other hand, water heater tanks last about 10 years (maybe 15 under perfect maintenance conditions).

Here’s why tankless water heaters last longer:

  • They don’t have water storage tanks that develop massive mineral deposits.
  • They’re not prone to enormous water expansion.
  • There aren’t nearly as many parts in a tankless water heater.
  • Tankless water heaters can be mounted on a wall, so they’re not bumped and scraped as often.
A tankless water heater installed on a wall

Is It Worth Switching to a Tankless Water Heater?

It’s worth switching to a tankless water heater because they use less space, never run out of hot water, and don’t heat up the room. Furthermore, tankless water heaters make less noise than tanked models and increase a home’s value. 

So if you’re looking for a new water heater, tankless is almost always the best choice.

Consider these benefits of upgrading your water heater to a tankless model:

  • Tankless water heaters are more space-efficient – they’re a fraction of the size of a water heater tank. As a result, you’ll have fewer pipes and wires to deal with. In addition, tankless heaters don’t use floor space—they’re entirely wall-mounted so that you can store extra items with the saved floor space.
  • You’ll never have hot water dips – according to Prudent Reviews, tankless heaters don’t have gaps between hot water. If you have a tank, you can only use the stored water. Tankless units hit a specific temperature and maintain the heat for as long as you need it.
  • You won’t have to deal with an excessively hot garage – water heater tanks are notorious for overheating garages (or whichever room you have yours in). These massive tanks emit extreme temperatures that can be uncomfortable. However, tankless water heaters use the heat efficiently, preventing it from warming the room.
  • Tankless water heaters are quieter – you’ve probably heard the loud thumps and crackles coming from large water heater tanks. This noise happens due to constant metal and water expansion. However, tankless models don’t store water, so they don’t cause these loud sounds.
  • Your home value will increase slightly – tankless water heaters save money on utility bills. People pay more when they know they’ll save in the long run. Even if you don’t want to sell your home, you can use this value increase if you decide to file for a mortgage adjustment or a lower interest rate.

If you already know you want to upgrade to a tankless water heater, it’s time to decide if you prefer gas or electric. Both models are much better than conventional water heaters in various ways, but they have a few differences. 

Below, you’ll learn everything you need to know about tankless water heater efficiency comparisons.

Is an Electric or Gas Tankless Water Heater More Efficient?

Electric tankless models are more efficient than tankless gas ones because they require less energy. However, they don’t heat as quickly, and many have lower temperature ceilings. Both tankless electric and gas units are more energy-efficient than gas or electric tanked water heaters.

So, which tankless variety is more suitable for your home?

  • Electric tankless water heaters heat slower, so they don’t use a lot of energy upfront. Some homeowners prefer the quickness of a gas-powered tankless water heater, but their initial energy usage is higher. However, that doesn’t necessarily mean you’ll spend more money using a gas model.
  • Gas tankless water heaters last a bit longer. Proper maintenance supersedes the power supply, but gas variants tend to last a year or two more than their electric counterparts. Both variants last tremendously longer than any other water heater on the market.
A plumber installing a tankless water heater in a bathroom
  • Gas tankless water heaters can handle more water flow than electric models. We suggest getting a gas model if you have a house with multiple showers running simultaneously. Then, you won’t have to deal with fluctuating temperatures or reduced comfort. Keep in mind that this doesn’t improve your water flow, though.
  • Electric tankless water heaters cost a little bit more to run. Although they use their energy more efficiently, they cost more money. Electric tankless water heaters typically convert over 95% of their energy, whereas gas models are about 85%. However, gas tankless water heaters have a lower energy demand.
  • Electric tankless water heaters are often cheaper upfront. Companies charge less because they cost less to produce, and they don’t heat as quickly as gas-powered models. If you want to save money upfront, install an electric tankless water heater. But if you want to save a few dollars monthly, try a gas tankless water heater.

Remember, you should always check your local utility costs to know which is better for your home. For example, an electric tankless water heater will be better if you have solar panels. It could even cost less to run monthly because your electricity will cost much less per kilowatt.

Are Tanked Water Heaters Better Than Tankless Units?

Tanked water heaters are better than tankless if you want to save money on the upfront cost. However, they don’t save any money in the long run, which means you’ll end up in a financial deficit. Nevertheless, tanked models have a few benefits you won’t find if you get a tankless variant.

Here’s a quick list of reasons traditional water heaters could be more financially efficient for you:

  • They’re much cheaper than tankless water heaters. A tanked unit might be the better option if you don’t have thousands of dollars for a tankless water heater. You’ll undoubtedly use more electricity and gas, but you won’t have to spend as much money upfront. This route is typically a good idea if you don’t plan to stay at the house for too long.
  • You don’t have to waste water heating it up. A tankless unit can take a few seconds to heat up because there’s no stored hot water. On the other hand, hot water tanks hold several gallons of hot water for immediate use. So you’ll save some water and time with a tank.
  • Longer warranties. A tankless water heater typically has about 50% of its predicted lifespan covered by a manufacturer’s warranty. Tanked models usually have about six years covered, four less than their tankless counterparts. However, six years make up about 60% of their predicted lifespan.

When it comes to long-term efficiency and energy usage, tankless water heaters are always the better choice. However, some people prefer water heater tanks because it’s what they’re used to. Not only that, but the savings can take a long time to make the unit pay for itself.

You can make your tanked water heater more efficient by only using one water source at a time. For example, avoid using multiple showers, sinks, and hoses simultaneously. As a result, you’ll use a lot less energy and gas. That said, you still won’t match the efficiency of a tankless water heater.

Why Do Some Homeowners Prefer Conventional Water Heaters?

Some homeowners prefer conventional water heaters because they’re more affordable, heat much quicker, and likely already have the proper plumbing. Changing from a water heater tank to a tankless heater requires a lot of plumbing and electrical work, which increases the price tag.

Worker in blue overalls adjusting a valve on a hot water heater.

So, why might someone think a conventional water heater is a more efficient choice?

Reduced Plumbing and Electrical Costs

Switching from a conventional water heater to a tankless unit will have a considerable cost. The installation costs are high because the company has to remove the old (and heavy) water tank, plumbing, and electrical. New tankless heaters have utterly different wiring and minimal plumbing thank tanks.

If you want a like-for-like water heater tank, you’ll only have to remove the old model and connect the new one. You won’t need to adjust the plumbing or wires.

Note: After the first upgrade, switching from one tankless water heater to another will cost much less. The initial conversion is always the most expensive part of the process.

Fewer Labor Fees

Almost all HVAC companies charge installation materials and labor fees. The longer they spend removing the old water tank, the more money you’ll have to pay. Keep in mind that it doesn’t always work this way. Some companies have flat rates. So again, it would be best to get multiple quotes before choosing a company.

You could reduce the labor fees by removing the old water tank before the company arrives. Ensure you do this before getting the quote; otherwise, you might have to stick to the original labor agreement.

A technician services a tankless water heater

Higher Heating Capabilities

Morris Jenkins explains water heater tanks can reach a high temperature much faster than tankless units. So if you prefer extremely hot water, this could be the way to go. Tankless water heaters have no problem exceeding 100º F so this downside isn’t much of an issue for most owners.

Gas models are the way to go if you want a water heater without as many heating issues. They heat a bit quicker, and many owners claim they have higher temperature ceilings.

Final Thoughts

Tankless water heaters last longer, use less energy, and take up less space than traditional water heaters. While they might cost a lot more, you’ll get your money back through the next decade or so. Thus, they’re worth the reduced carbon footprint and monthly utility expenses.


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