From the Blog

The Pros and Cons of Tankless Water Heaters

As a homeowner, stretching the dollars you spend on utilities, especially energy costs, is always a priority. With that in mind, you may have heard of tankless water heaters and wondered if they offer a route to making the most of your budget.

While it is true that tankless water heaters offer a way to reduce energy costs – and certainly they are environmentally friendly – there are also pros and cons to tankless water heaters that you should understand before determining whether this device is the right solution for your home and budget.

Let’s take a closer look at tankless water heaters.

What Is a Tankless Water Heater?

We all know what function a water heater fulfills, delivering warm water throughout your home. A tankless water heater, also known as a demand-type or instantaneous water heater, fills the same role – but provides hot water only as needed. In other words, a traditional storage (“tank”) water heater fills up with water, which is then continuously heated until you turn on a hot water tap. That heated water is then delivered to the open tap, while cold water replaces the drained water in the water heater to be warmed for the next use. It’s a great but less than efficient method of ensuring hot water in your home. And it can also mean that you run out of hot water, as water in the tank requires time to heat – and if you empty the tank, you will need to wait for the heater to do its job.

A tankless water heater system, on the other hand, work instantaneously. Therefore, they do not need to run as much, as they immediately heat cold water funneled through a heat exchanger (powered by either natural gas or electricity). This results in a much more efficient appliance — one that can save money on energy bills. You should also know, however, that a tankless water heater must limit its flow rate in order to do its job, so that may limit whether or not a tankless heater is the best choice for your home.

Is a tankless water heater for you?

One of the main questions to answer when determining whether a tankless system is optimal for your home is: How many hot water sources do I use at a given time?

Tankless water heaters come in varying sizes, but if you use a lot of hot water at once, a tankless heater may have trouble matching your demand. You may install a point-of-use system for each faucet to help make up for that need – but each installation carries with it price increases, and those increases may offset the savings you stand to make via the efficiency of a tankless water heater.

To make that determination there are some numbers you should know:

  • 1-5 gallons per minute (GPM) – Most on-demand water heaters provide water in the range of one to five gallons per minute. This flow rate can be plenty for many types of homes.
  • 2.5 GPM – Most high-flow shower heads run at a rate of 2.5 GPM
  • 3 GPM – Most washing machines run up to 3 GPM.

If you do not need to run multiple hot water taps or appliances at once, then a tankless water heater will easily meet your demands. But, as you can see, running multiple hot water sources at once could make things difficult on a single tankless heater.

Take all of this into account when determining whether a tankless water heater is a better option for you than a traditional tank hot water system.

Tankless Water Heater Advantages

There’s a reason why tankless water heaters are becoming more popular with homeowners. As tankless water heater benefits are numerous, most notably in efficiency. Some of the pros include:

They do not require as much energy usage as a traditional, tank water heater and do not waste energy.

They are also smaller and save space, which can make them ideal for smaller homes, apartments, and condominiums.

They also last a long time. Traditional water heaters have a working life of around 8 to 12 years. Meanwhile, most tankless water heaters have a life expectancy of more than 20 years. They also have replaceable parts that may extend their usage by more years than that. And when you have a type of water heater with a longer lifespan, it will pay for itself over time.

They are safer in that, if they do fail, they will not spill gallons of water out over your basement or crawlspace.

Let’s take a closer look at some of the advantages of tankless water heaters.

Energy Efficient

Studies prove the efficiency of tankless water heaters.

In fact, the Department of Energy states that in homes that use less than 42 gallons of hot water daily, demand water heaters offer between 24-34% more energy efficient than conventional storage tank water heaters.

A tankless unit can also be 8-14% more energy efficient for homes that use a lot of hot water – around 86 gallons per day.

Those numbers can significantly impact your bottom line in utility spending and offset the fees of a demand water heater in water heating costs over the lifespan of the system.

Saves Space

Thanks to increased safety regulations, tank water heaters have grown bigger over the years. And when you consider that they hold up to 40-50 gallons of water, you’re talking about a lot of space. Go into your basement and take a look. A traditional water heater, while a great appliance, is nothing if not obtrusive.

Tankless heaters, meanwhile, are about the size of a suitcase. And because they are installed on a wall, they free up floor space.

Saves Money

Due to their improved efficiency over storage water heaters, instantaneous water heaters can help you save on utility costs.

In fact, the U.S. Department of Energy estimates homeowners save an average of $108 in energy costs when using gas-powered tankless water heaters. Meanwhile, electric tankless heaters save $44 per year.

Tankless Water Heater Disadvantages

There are also some cons to tankless water heaters, however. We’ve touched on a couple of tankless water heater drawbacks already but know that tankless hot water heaters are not ideal for those homes that use a lot of hot water simultaneously at different sources/taps/appliances.

Tankless systems are also more expensive to install than traditional water heaters.

You may also need more work to set up a new system, as your electrical and plumbing systems may need alteration to properly fit instant water heaters – which, again, leads to higher upfront costs.

Limited Hot Water for Multiple Outlets

Because of their very design, tankless hot water heaters make it difficult to service a whole home that utilizes more than 40 gallons of hot water per day.

If you need to use multiple appliances that use hot water simultaneously – or you run multiple showers at once, you’ll likely need to install a few point-of-use systems to keep up with the demand in your home.

Power Outage

If you lose power, unfortunately, a tankless water heater means no hot water in your home. Because of its design, it must have the power to heat water, and because it does so instantaneously, you will not have a reservoir of hot water to use like with a storage water heater.

Even gas-powered tankless water heaters must have electricity to power their hardware, so it makes no difference. No matter what type of tankless water heater you have, you must have electricity to power it.

While these heaters use gas to heat the water, they require electricity to power the hardware for the process. A power outage will result in the heater not working during the outage.

Costs More Upfront

While you will save on energy expenditures, a tankless style water heater costs more to install than a storage water heater.

In fact, you can expect to spend between $500 to $800 for an electric tankless water heater and between $750 and $2,000 for a gas tankless water heater.

That’s compared with $400 and $800 for a standard water heater.

Unit Cost

Installation of tankless style water heaters may not be as simple as just fitting the unit. You may need to pay electricians, plumbers, or other contractors to set up proper electrical systems, gas lines, and water lines in order to serve the hot water heater.

These eventualities will incur even more fees, and you should make sure that you are aware of these and know of all possible upgrades needed to make these systems work.

Electric vs Gas Tankless Water Heaters

Just like traditional, storage water heaters, there are two types of tankless water heaters: electric and gas-powered. And just like their traditional cousins, there are pros and cons of each. For instance, electric tankless heaters are cheaper to install than gas-powered units.

We already mentioned price ranges above, but those are just the installation fees, and there are more potential charges to be aware of.

Electric tankless water heaters may be cheaper to install, but electricity usually costs more than natural gas and propane. Therefore, gas-powered tankless heaters will actually cost you less to run.

Electric tankless heaters are usually smaller units than their gas-powered counterparts. In fact, they can even be made to fit in closets and under sinks.

Electric tankless water heaters also put out less hot water than gas-powered models.

Electric Tankless Water Heaters

Because there are very few parts in an electric tankless water heater, they are quite compact and low-maintenance appliances. In fact, you will only need to schedule one-time yearly maintenance in order to keep it running – and this includes a flush to remove lime scale build-up.

A tankless electric water heater is extremely efficient but also better suited to homes that do not use more than 40 gallons of hot water a day.

Gas Tankless Water Heaters

These instantaneous water heaters use natural gas or propane to heat the water in your home and are a better fit for large-family homes. They can even power both dishwashers and washing machines simultaneously if needed.

However, you can also push them to the limit if you plan to take a shower while running a dishwasher or washing machine.

These types of tankless water heaters also require more space than an electric tankless heater – due to gas lines and ventilation.

They also require regular maintenance from a trained technician – though nothing more than yearly checks.


Ensuring that your tankless water heater works properly requires an experienced and skilled installation technician.

The technician will take many factors into consideration during tankless water heater installation, including climate, local building code requirements, and safety issues – which is why most people who install tankless heaters utilize a professional contractor to complete the job.

And, once it is installed, your heater will require periodic (usually yearly) maintenance to ensure it runs at peak efficiency – and efficiency is likely why you purchased a tankless water heater in the first place.

What Experts Say About Tankless Water Heaters

Tankless water heaters are becoming more popular across the nation, and respected names such as Consumer Reports and Forbes have each weighed on their viability as the best method of heating your home’s water.

Largely, it is a question of math. Due to their upfront costs, tankless water heaters may be tough to swallow on the front end, but their efficiency can pay off in lower utility bills in the long run.

If you live in an older home, for instance, it may not be worth it because of the amount of retrofitting you may have to do to install a tankless water heater. However, as Consumer Reports noted:

“The payback math changes if you’re building a new house or renovating an old one and have a need for space savings, endless hot water, or improved energy efficiency. In that case, installing a tankless water heater can make financial sense because there are no major retrofitting costs involved.”

Is a Tankless Water Heater Worth It?

Ultimately, the question for you is one of cost. If you live in an older home and have a large family, a tankless water heater may not be worth it. However, if you live in a newer home, are building a home, or have relatively low hot water needs, then an instantaneous water heater might be the perfect option.

Need a Tankless Water Heater Installer You Can Trust?

The good news is that there are honest and helpful contractors available here in north Georgia to help you determine whether a tankless water heater is the best option for your home. Here at Conditioned Air Systems, our plumbers and energy efficiency experts will gladly sit down with you and go over the figures and help you determine if a tankless water heater is the right choice for your situation. We install only the most reliable and efficient products on the market and have installed these cutting-edge appliances in homes across north Georgia.

If you do decide to go with a tankless water heater, our skilled and knowledgeable plumbers and technicians will ensure that it is installed correctly and safely, ensuring you get the most out of your utility budget.

If you’re interested in talking more about tankless water heaters, call the tankless water heater pros of Conditioned Air Systems today at 770-536-7509 and we will come out and give you a thorough, written estimate that assures no hidden costs or fees.

Conditioned Air Systems

Meeting Your Plumbing Needs

Just like our HVAC services, we offer 24/7 and emergency plumbing services to attend to your every need.
HVAC company