Choosing between the two comes down to how your household uses hot water, what your house can accommodate and how long you plan to stay. Neither is better in every case, and the right answer is usually obvious once you look at those three things.
A tank heater stores and keeps hot water ready, costs less to buy and install, and is simpler to replace. A tankless unit heats water only when a tap opens, takes less space, can last longer and uses less energy in many homes, but costs more to install and needs a correctly sized gas line or electrical supply, venting and regular descaling. Size, hot water use, space and hard water decide the choice.
- Tank: lower upfront cost, simple installation, a limited supply of hot water between recoveries.
- Tankless: continuous hot water within its capacity, smaller footprint, higher installed cost.
- A gas tankless unit usually needs a larger gas line and its own venting.
- Hard water scales both, and tankless heat exchangers need annual flushing.
- Sizing matters more than the type. Undersized tankless units cause most complaints.
How they differ
A tank water heater keeps a few dozen gallons hot all day, losing a little heat even when no one uses water. A tankless unit has no storage. It fires when you open a tap, heats the water as it passes through and stops when you close it. So a tank can supply a large draw at once until it runs out, and a tankless unit can supply hot water for as long as it is on, up to its flow limit.
Cost: the real picture
A tankless unit costs more to buy, and installing it often costs more again, because it needs venting, often a larger gas line, a condensate drain for condensing models and sometimes an electrical upgrade. A tank is a simpler swap. Over many years, a tankless unit can recover part of the difference through lower energy use, but how much depends on how much hot water you use. We give you a price for each option before work starts, so you can compare for your own house.
Running cost and energy
The U.S. Department of Energy says tankless water heaters can be noticeably more efficient than tank models in homes that use a modest amount of hot water, and the gap narrows as use goes up. Tanks lose heat through standby losses.
Lifespan
Tankless units commonly last longer than tank heaters when they are maintained. Tank heaters often last around a decade, and hard water can shorten that. Both depend on maintenance.
Hard water in Houston
Hard water leaves scale. In a tank it settles at the bottom and in a tankless unit it builds up in the heat exchanger and narrows the passages. The answer is routine: flush a tank yearly, and descale a tankless unit on the manufacturer's schedule. A softener reduces the problem for both. See water softener installation.
Size
A couple or a small family often does well with a mid-size tank or a mid-range tankless unit. A larger household with several showers, laundry and a dishwasher in use at the same time needs a larger tank or a tankless unit with a higher flow capacity. A plumber sizes it from your fixtures and habits.
Space and location
Tankless units are wall-mounted and compact, which helps in a small closet or garage. They need a route for venting. Tanks need floor space, a drain pan and a relief pipe, and in attics a pan and a drain line are essential.
Questions to ask
- What size do you recommend, and why?
- What does the installation include?
- What will the gas line, venting and drain require?
- What maintenance does it need, and how often?
- Is a permit needed?
See our water heater experts, tankless installation and water heater installation pages.
Frequently asked questions
Do tankless water heaters work in a power outage?
Most need electricity for controls and ignition, so they do not run without power unless they have a backup.
Can a tankless water heater run out of hot water?
It can if demand exceeds its capacity, for instance with several fixtures at once.
Is tankless worth it for a small household?
Often the savings are modest, so it depends on your plans and the installation.
How long does each last?
Tankless often longer than tank, with maintenance.
Does a tankless unit need a bigger gas line?
Often, yes, because it burns more gas at once.
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