Tank vs Tankless Water Heater: Which is the Smart Decision?

Tank vs Tankless Water Heater

Are you looking to install a new water heater and confused between Tank vs. Tankless water heaters? While both have pros and cons, deciding the best is challenging. However, it’s crucial to make wiser decisions, as they affect your comfort, energy bill, and environmental footprint.

This blog will discuss the pros and cons of tank and tankless water heaters, which you should decide on based on your family’s needs and comfort.

Difference Between Tankless and Tank Water Heater

Tank vs. Tankless water heaters: Understanding the basic mechanism of each type can help you choose the right option for your home.

Storage Tank Water Heater Working Mechanism:

Tanked water heaters store a reservoir of hot water, typically ranging from 20 to 80 gallons, depending on the size of the unit and household demand. A heating mechanism, usually electric coils or a gas burner inside the tank, heats the water to a preset temperature.

Tankless Water Heater Working Mechanism:

Tankless water heaters, on the other hand, don’t store hot water. Instead, they heat water on demand as it flows through the unit. When you turn on a hot water tap, cold water travels through a heat exchanger, where it’s rapidly heated by either a gas burner or electric heating elements.

Tank vs. Tankless Water Heaters

Tanked Water Heaters:


  • Lower Initial Cost: Tanked water heaters typically have a lower upfront cost than tankless models, making them a more budget-friendly option for homeowners.
  • Simple Installation: Storage tank water heaters are usually installed easily, requiring minimal modifications to existing plumbing systems. This simplicity can reduce installation time and labor costs.
  • Familiar Technology: They have been a staple in households for decades, making them a familiar and trusted option for many homeowners and technicians.
  • Reliable Performance: They provide a steady hot water supply, making them suitable for households with consistent hot water usage patterns.


  • Limited Hot Water Supply: Storage tank water heaters can only provide as much hot water as their storage tank allows. Once the tank is depleted, there may be a delay in hot water availability as it refills and reheats.
  • Standby Heat Loss: Tanked water heaters continuously heat the water in the tank, leading to standby heat loss when hot water is not being used. This can result in higher energy bills over time.
  • Space Requirements: The size of the storage tank requires space, which can be challenging for homes with limited space or those looking to maximize storage capacity.
  • Shorter Lifespan: On average, tanked water heaters have a shorter lifespan than tankless models. The constant heating and cooling of water in the tank can lead to wear and tear over time, potentially requiring more frequent replacements.

Tankless Water Heaters:


  • Endless Hot Water: Tankless water heaters provide hot water on demand, so you’ll never run out of hot water, even during peak usage times. This makes them ideal for large households or families with high hot water demands.
  • Energy Efficiency: Tankless water heaters only heat water when needed, eliminating standby heat loss associated with tanked models. This results in lower energy consumption and reduced utility bills over time.
  • Space-Saving Design: Tankless water heaters are compact and wall-mounted, freeing up valuable space in utility closets and basements. Their small footprint makes them ideal for homes with limited space.
  • Longer Lifespan: On average, tankless water heaters have a longer lifespan than tanked models. With proper maintenance, they can last up to 20 years or more, providing reliable hot water for years to come.


  • Higher Initial Cost: Tankless water heaters typically cost more upfront than tanked models. The initial investment may be prohibitive for some homeowners, but long-term energy savings can offset this expense.
  • Limited Flow Rate: While tankless water heaters provide endless hot water, they have a limited flow rate, which means they may struggle to meet simultaneous hot water demands from multiple fixtures. Proper sizing and installation are crucial to ensure adequate performance.
  • Complex Installation: Installing a tankless water heater may require modifications to existing plumbing and electrical systems and adequate venting for gas tankless water heater models. Professional installation is recommended, which can add to the overall cost.
  • Cold Water Sandwich Effect: Some users may experience a brief moment of cold water when turning on the hot water tap, known as the “cold water sandwich” effect. This occurs when the heater pauses between heating cycles, allowing cold water to mix briefly with the hot water flow.

Electric vs. Gas Water Heaters

An electric tankless water heater may offer a more affordable installation option as it doesn’t necessitate a gas vent, although it often comes with a lower flow rate. Conversely, gas tankless water heaters typically incur higher upfront costs due to ventilation requirements and potential gas line installation. Additionally, they demand more maintenance compared to tank water heaters. While a gas tank water heater heats water swiftly, it may exhibit a shorter lifespan compared to electric models.

Read also: Electric vs. Gas Water Heaters : A Comprehensive Guide for more detailed information.

Are Tankless Water Heaters Better than Tank Water heaters?

Determining whether tankless water heaters are better than tank water heaters depends on various factors. Tankless heaters offer endless hot water, energy efficiency, and a longer lifespan but come with a higher upfront cost and potential installation complexities. On the other hand, tank heaters are more budget-friendly initially and provide a steady hot water supply but are limited by tank capacity and have higher energy consumption. 

Ultimately, the choice depends on individual preferences, household size, hot water usage patterns, and budget considerations. Both options have advantages and disadvantages, allowing homeowners to make informed decisions based on their specific needs.

If you still have queries regarding tank and tankless water heaters, contact our Spot-On experts for detailed advice.