Tankless vs. Traditional Tank Water Heaters – What’s the Difference?

Did you know that heating water accounts for nearly 30% of your energy bills? In fact, heating water is one of the top expenses for families around the country. That’s why the water heater you choose is so important.

There’s a fairly new technology that might be able to save you some money on your energy bills – tankless water heaters.

But, what about your old, traditional tank water heater? Is it really worth it to switch to a tankless water heater? It depends. By learning exactly how tankless water heaters work, you can decide if making the switch is right for you.

Tankless water heaters are powered by either an electric, gas, or propane heating device. Instead of storing hot water in a tank, tankless water heaters have a heat exchanger that quickly heats up water as it passes by. Heat exchangers are designed to turn on anytime you turn on the hot water faucet.

Since there is no tank, tankless water heaters take up far less room than their older tank counterparts. They do not need to be stored in your garage or closet. In fact, they can even be installed close to your bathroom, so that the hot water gets to your faucet faster.

So, how does a tankless water heater use less energy?

A traditional tank water heater keeps the water inside the tank hot all the time. Similar to an air conditioning thermostat, the water heater turns itself on and off, in order to keep a constant temperature. Depending on the size of your tank, your water heater has to keep 40-75 gallons of water hot all the time – even though you only use hot water a few times a day.

The energy your tank water heater uses to keep water hot all day long is called ‘standby loss’. In fact, 15-30% of the energy a traditional tank heater uses is due to standby loss.

With a tankless water heater, there is no standby loss. Tankless water heaters are called ‘on demand systems’, because they only turn on when you need hot water. Experts say that replacing a traditional 40-gallon water heater with a tankless water heater can shave 25% off of your energy bills, because there is no standby loss.

While it sounds like a great addition to your home, there are also some drawbacks to getting a tankless water heater.

The heat exchanger in a tankless water heater may not activate if you only need a small trickle of water – like if you’re shaving. If the exchanger doesn’t activate, you will be stuck with cold water.

Tankless water heaters can warm up water quickly, but they are not instantaneous. No matter what kind of water heater you use, there will always be cold water lingering in your pipes that has to be pushed out of the way before you get to the hot water.

Plus, tankless water heaters either have an electric heat exchanger, or, at the very least, electric-powered controls – meaning that, if the power goes out, so does your hot water.

And, tankless water heaters are more expensive to buy. They cost relatively the same as tank water heaters, but, with tankless systems, you also have to pay to have them professionally installed.

Tankless water heaters are also more expensive to maintain than traditional tank heaters. For example, heat exchangers are very vulnerable to cold weather. In frigid temperatures, they can crack, which is a very costly repair to make. If you live in a cold climate, you may not want to get one. Plus, since tankless water heaters operate at higher temperatures than traditional tank water heaters, they require a special vent – which is also very expensive.

There is also some debate over how much money they can really save you on your energy bills. Over the past few years, traditional tank water heater manufacturers have made their products more energy efficient. In fact, many tank water heaters now qualify for Energy Star certification.