Tank vs Tankless Water Heaters is Not a “One Size Fits All” Decision

We are often asked “which is best, tank or tankless water heaters?” The best answer we can give starts off with “it depends.” That’s because every situation boils down to several personal factors.

Neither Tank nor Tankless is Inherently “Better”

The choice of tank or tankless water heaters should be made on which one is better for YOU and your personal situation. And of course the obvious first consideration is cost.

Tankless Costs Twice As Much – But Lasts Twice as Long

Prices vary of course by brand and capacity, but a whole house tankless water heater runs roughly double that of a traditional tank water heater. And if you’re considering replacing your current tank style with a tankless model, you may incur additional costs related to retrofitting plumbing and electricity.

We install both tank-style water heaters and tankless water heaters. Your satisfaction is our primary mission so please let us help you decide which one is best for your specific environment and needs. We have more experience with water heaters than any other plumber in the area.

Converting From Tank to Tankless Water Heaters is Costly

According to studies done by Consumer Reports, the average payback time for converting from a storage tank gas water heater to a gas tankless ranges from 22½ years to 27½ years.

That’s a long time! And not all tankless water heaters hold up that long. Warranties on most tankless water heaters are typically 15 years. Some high-end models include a 20 year warranty.

Once you’ve made the switch, the payback on the next tankless water heater is less of course. That’s because you no longer incur retrofitting costs.

And your home may not require such extensive retrofitting. That’s why it’s important to look at your specific situation. We can help you do that.

If you’re building a new home, of course, payback for installing a tankless water heater is substantially less.

Four or More People in Household Cost-Justifies Converting From Tank to Tankless

The number of people in your home and the time it takes for each one to take a shower makes a difference. You can easily cost-justify converting from tank to tankless if you have four or more people in your home and especially if they take long showers. That’s because you save more on energy costs.

Tank water heaters naturally take more energy. Why? The holding tank works constantly to keep the water at a constant temperature so it needs more gas or electricity to warm the water.

On the other hand, a tankless water heater uses energy only “on demand”. Tankless, as the name says, has no tank to keep water on hold in case it’s needed.

Condensing Tankless Water Heaters vs Non-Condensing Tankless Heaters

A condensing tankless water heater is designed to take every bit of energy out of the gas as possible. If you feel the exhaust coming out of a tankless condensing unit you’ll notice that it’s barely above room temperature.

In fact PVC pipe is used to vent the exhaust. You could never do with a conventional tank water heater. Likewise, you could not use PVC pipe to vent traditional non-condensing tankless water heater.

Condensing tankless heaters use the thermal energy of the exhaust gases. Instead of pushing exhaust gasses outside (as non-condensing tankless and conventional tank water heaters do), condensing units pass the water through a heat exchanger. The heat exchanger houses those exhaust gases so that it preheats the inlet water before it enters the main burn chamber.

Furthermore, since condensing units have this built-in pre-heating mechanism in the heat exchanger, they can operate at a lower BTU. That further improves their efficiency, raising it above 90%. At the same time, they are able to maintain the same gallon per minute when compared to similarly sized units.

Although the newer condensing tankless water heaters cost more initially, venting costs are lower, they operate more efficiently and at a lower BTU so they save you money overall in the long run.

With all these benefits of the condensing tankless units, it’s unlikely the traditional non-condensing units will be around much longer.

Real-World Comparison Tank vs Tankless Water Heaters

A 2012 Minnesota field study gave 10 homeowners both tankless water heaters (some condensing and others non-condensing tankless heaters) along with conventional tank-style water heaters. Users alternated use each month between tank water heaters and the tankless heaters. The study collected data on water flow rate, water heater inlet and outlet water temperature, gas and electrical consumption and ambient temperatures. Then they compared energy savings to manufacturers’ ratings for both tank and tankless water heaters. They also evaluated “user satisfaction” based on a number of factors.

The study concluded that the rated performance of “storage water heaters was nearly 20% lower than rated, while that of the tankless water heaters was only 10% lower.” So both tank and tankless were not as energy efficient as manufacturers claims.

“Tankless water heaters provided measured savings of 50 to 85 therms per year,” according to the study. And that’s a lot of energy savings. However, the economics were poor in retrofitting situations except in homes with high hot water usage, such as large families.

The economics of TWHs are more favorable for new construction and for retrofit applications where power vented water heaters are required to ensure adequate venting. In these applications, incremental costs for TWHs can sometimes be reduced to $0 and paybacks range from 0 to 18 years.

2012 Study conducted in Minnesota

User Satisfaction Study Tank vs Tankless Water Heaters

The Minnesota study also asked users specific questions about their what they liked and disliked about their monthly experiences using tank vs tankless water heaters. They concluded:

Users disliked the delayed delivery time (with tankless) and the need to increase flow for low flow operations (such as low-flow shower heads).

Most homeowners found the positives outweighed the negatives, and nine of the ten homes opted to keep the TWH (tankless water heaters).

2012 Michigan Study of real-world users tank and tankless water heaters

Of course those ten folks who participated in this study did not need to pay any costs of conversion nor for the water heaters. So their decision to keep and use the tankless water heaters was likely based on preferring to use tankless and reap the benefits of lower energy use costs in the future.

Feedback from Our Own Customers Regarding Tankless Water Heaters

We always give our unbiased recommendation on when converting to a tankless water heater makes financial sense and when it does not. After all, we install and service ALL types of water heaters. We want our customers to be satisfied. Your satisfaction truly is our number one goal.

Some customers have their hearts set on converting to a tankless heater. And even after we’ve laid out the reasons why it is not the best option in their specific circumstances, some choose to convert to tankless anyway. We sometimes hear later, that not all of them are not happy with their decision.

So we continue to do our best to spell out the pros and cons of tank vs tankless. We give our recommendation based on the number of people in the household, average hot water usage, and other factors likely to impact this specific customer’s satisfaction in the future. Ultimately, of course it is each customer’s choice.

Other Considerations Before Converting to Tankless

Converting from tank-style to tankless is an investment in the future. Since return on investment for converting from tank to tankless tends to take many years, you’ll want to ask yourself how long you’re likely to remain in your home. That’s not always easy. Situations can change rapidly, and what you value in a living environment today may not be the same in ten years. Your financial circumstances may also change.

Does Your Home Currently Have a Water Recirculation Pump?

While whole-house tankless water heaters will work with recirculation pumps, they do not work as effectively as conventional tank-style water heaters with recirculation pumps.

Some folks are under the mistaken belief that whole-house tankless water heaters provide instant hot water. Actually, they heat up “on demand” but then they, like tank heaters, must push water through your home’s pipes to the end destination. And that takes time, especially if showers are located a great distance from the water heater.

You can read more about hot water recirculation pumps and how they work here. The bottom line, though is that if you are already using a recirculation pump on your tank-style water heater, you may not be happy converting to a tankless water heater. One of our customers who had switched from a tank-style with a recirculation pump to a tankless actually had us switch them back to a conventional tank water heater.

We want our customers to be happy with whatever option they choose.

Tankless Water Heaters Are More Environmentally Friendly

Since tankless versions heat only on demand, you’ll immediately burn less energy. According to the Department of Energy, that will save you around $100 per year on energy costs compared with storage tank water heaters. Even though it will take many years to recoup your investment, you’ll be helping the environment.

Point-of-Use Tankless Water Heaters

If whole-house tankless water heaters are not financially feasible for your situation, you may want to consider small, point-of-use heaters.

We can install a small tankless water heater under your kitchen sink, for example, or near your shower. These are the two most common areas that make the most sense for installing point-of-use tankless units.

Let Us Help You Evaluate Which Water Heater Solutions Are Best for Your Specific Home and Needs

Why Us?

It’s no accident that “water heaters” is part of our name. We’ve installed and serviced more water heaters than most any other plumber in the area. So we’ve seen which ones work best in what kind of environments.

  • We are the leading water heater experts
  • Five-Star Customer Satisfaction ratings
  • Intend to keep that rating so we give honest recommendations
  • Your satisfaction is our main goal
  • We beat all competitors’ pricing for water heaters — even big box companies.
  • Local, privately owned plumber — we’re your neighbor
  • Over 35 years experience

How to Help Your Water Heater Last Longer

Mineral deposits from hard water are the number one enemy of water heaters. They corrode and ultimately cause both tank-style and tankless waters heaters to rust through.

Our tap water in Fallbrook, Bonsall, Vista, Oceanside and Temecula is especially hard. That means the mineral deposits will deteriorate your water heater faster in this area than in most other areas around the country.

To reduce the mineral deposits, we recommend installing a salt-based water softener system.

You can also lengthen the life of tank-style water heaters by draining and flushing them every six months. If you have a water softener system, you can get by with doing it once a year.

Tankless water heaters also need to be flushed about once a year, even if you have a water softener system.

After all, you’ve made a considerable investment in your water heater. So get as many years of hot water as you can from it!

And of course we can help with draining, flushing, maintenance and repair too.

We are the leading water heater experts!

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