Tankless Water Heaters: Pros, Cons, & Savings

By March 12, 2020Costs, Plumbing
Tankless water heaters

What is a Tankless Water Heater?

The name gives it away. In essence, it is a water heater that does not hold water. Rather, once hot water is demanded in a home, the unit begins to heat the water as it passes through.

Through on-demand water heating consumers can see a drop in their energy bill along with other pros and cons. You should know, however, tankless units come in two types, each with their own pros/cons.

Overall, tankless water heaters are about 23%-34% more efficient than regular water heater tanks.

A Common Misconception

It is worth noting that there is a common misconception that tankless water heaters provide instant hot water. This is simply not true. Hot water still has to travel from the tankless unit to your sink. The water that is sitting in your pipes can become cold. In order to have instant hot water, you would need a circulation pump.

A circulation pump will circulate hot water through your entire home to ensure all the water is hot.

How does it work?

Gas Units

As hot water is demanded, a flow sensor starts the heating process. Cold water travels through the unit and gets hotter through a heat exchanger powered by, in this case, a burner. The heat exchanger is just where the high heat and water flow coils reside. Finally, hot water comes out the other side in a matter of seconds!

Electric Tankless Water Heaters

Electric tankless units are basically the same thing. However, instead of a flame, an electric powered burner heats the exchanger.

Gas Vs Electric Tankless Water Heaters

Gas Tankless Water Heaters

Gas Powered Pros

  • Provides more hot water per minute. This is better for bigger families.
  • Fuel prices are lower than electricity prices (in general, depends on region).

Gas Powered Cons

  • More expensive to purchase – on average about $500 more, but depends on size.
  • More expensive to maintain – requires special contractors and yearly maintenance.
  • Less efficient than electric on average – gas units are about 80%-85% efficient.
  • Needs more room and a flue for emissions. If the flue goes through your roof – it could cause a leak in the future.
  • Emits greenhouse gases.
  • Service Life is limited if not properly maintained.

Electric Tankless Water Heaters

Electric Powered Pros

  • Cheaper install – super easy install.
  • Cheaper maintenance – easy to maintain.
  • Longer-lasting.
  • Electricity does not emit greenhouse gases.
  • No need for a flue through your roof.
  • More efficient – 98%-99% efficiency (this may cause more overall savings than gas, depending on gas rates in your region).

Electric Powered Cons

  • Lower hot water output per minute.
  • Electricity is generally more expensive than gas.

Concluding Thoughts

Which One is Better?

Well, it depends on your needs and your region. A gas unit may be able to support your large family, furthermore, your home may have cheaper gas prices.

On the other hand, if your home does not have propane or natural gas and you do not have a large family an electric unit might be a better option.

You should also consider your budget, space allotted for the unit, and your thoughts towards greenhouse emissions.

Cost Savings

You may not see the cost savings you are looking for at the start. A more expensive tankless water heater can be double the cost of a regular water heater tank. Therefore, you may save $75/month with your new tankless system, but it may take a few years to get your money back.

Before you buy a tankless water heater… check this page out.

Looking for more myths and information about tankless water heaters? Watch this video.

Aaron Shishilla

Author Aaron Shishilla

Aaron Shishilla is the youngest registered professional inspector in Florida. Coming from a family-owned home inspection company and now the marketing manager at Waypoint.

More posts by Aaron Shishilla

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