So your water heater is on its last legs, and you’re stuck trying to figure out what to replace it with. Should you stick with a traditional tank model or make the leap to a tankless system?
Both options have their strengths and weaknesses, and what works perfectly for your next-door neighbor might be completely wrong for your home. Making the wrong choice can mean years of frustration – whether that’s running out of hot water constantly or spending way more than you need to.
How Tankless vs Tank Water Heaters Work
Let’s break down the main differences between these two systems. Once you understand how they work, a lot of their advantages and limitations make more sense.
Tankless Water Heaters
A tankless water heater doesn’t store hot water – it heats it on the fly, right when you need it. When you turn on a hot water tap, cold water flows through the unit where either a gas burner or electric element heats it instantly as it passes through.
These systems use powerful heat exchangers that warm the water to your desired temperature in seconds. Most tankless units mount on a wall and take up much less space than traditional tank heaters. Some people call them “on-demand” water heaters, which is pretty accurate since they only kick on when you need hot water.
Storage Tank Water Heaters
Traditional tank water heaters are what most of us grew up with. They work by keeping a large tank (usually 40 to 80 gallons) of water hot all the time, just waiting for you to use it.
Inside that big insulated tank, there’s a heating element (gas or electric) that maintains the water at your preferred temperature.
When you turn on a hot water tap, the system pulls already-heated water from the top of the tank and sends it to your faucet or shower. As that hot water leaves, cold water enters the bottom of the tank to replace it, and the heating element kicks on to warm up the new water.
Is a Tankless Water Heater Better?
That depends entirely on your situation. I’ve installed both types throughout L.A. County, and there’s no clear winner for everyone.
Tankless water heaters make the most sense if:
- You’re tired of running out of hot water mid-shower
- Your home is tight on space and that tank footprint is valuable
- You use hot water throughout the day rather than all at once
- You’re planning to stay in your home for many years
- You’re willing to invest more upfront for long-term savings
A tank water heater might be the better choice if your priority is keeping initial costs down or if your family tends to use a ton of hot water simultaneously.
Do Tankless Water Heaters Last Longer?
In our experience, absolutely. We typically see tank water heaters last about 8-12 years, even with decent maintenance. The constant exposure to water eventually takes its toll, and the tanks start to corrode from the inside out.
Tankless systems, on the other hand, regularly last 20+ years and that’s possibly double the lifespan of a tank unit. This longer life expectancy comes from not having a tank that can rust and corrode over time.
Another advantage of tankless systems is that they have replaceable parts. If something fails after 15 years, we can often replace just that part rather than the entire system. With a tank, once it starts leaking, there’s no fixing it – you need a complete replacement.
This longer lifespan helps offset the higher initial cost when you look at the big picture. You might go through two or three tank water heaters in the time one tankless unit is still going strong.
What Maintenance Does a Water Heater Need?
Both systems need regular care, but the maintenance tasks are a bit different. Skipping maintenance is a mistake we see too often – it dramatically shortens the life of your investment.
For tank water heaters:
- Annual flushing to clear out sediment that creates hot spots and damages the tank
- Checking and replacing the anode rod every few years (this sacrificial part prevents tank corrosion)
- Testing the temperature and pressure relief valve yearly
- Inspecting connections for leaks
- Checking pressure settings
For tankless water heaters:
- Descaling to remove mineral buildup (especially important in Orange County’s hard water areas)
- Cleaning or replacing water filters
- Inspecting the heat exchanger
- Checking venting on gas models
- Testing electronic components like the flow sensor
Does your water heater need maintenance? Get a free estimate today!
What Type of Water Heater Is Most Energy Efficient?
In our experience installing systems throughout L.A. County, gas tankless water heaters typically offer the best efficiency ratings. They can cut energy use by up to 34% compared to standard tank models.
The big efficiency advantage comes from eliminating standby losses. A tank water heater is like
keeping a pot of water hot on the stove 24/7 just in case you might need it. That’s inherently wasteful, no matter how well the tank is insulated.
If you’re looking at efficiency ratings, pay attention to the Energy Factor (EF) or Uniform Energy Factor (UEF). Higher numbers mean better efficiency. Most tankless units score between 0.92-0.96, while typical tank models range from 0.60-0.70. That difference translates directly to your utility bills.
Are Tankless Water Heaters More Expensive?
Tankless water heaters are more expensive upfront. The sticker shock is real when comparing a tank replacement to a new tankless system. You’ll pay $1,000-$3,000 for a quality tankless unit versus $300-$2,000 for a tank model. But the bigger cost difference usually comes with installation.
Converting from a tank to a tankless system often means running a larger gas line, installing different venting, updating your electrical for the control systems, possibly needing to relocate the unit to properly install it, and possibly needing to add water treatment if you are in a hard water area.
All of this can push installation costs to $4,000 or more, compared to $1,000-$2,000 for installing a new tank. That’s a significant difference that makes many homeowners hesitate.
The long-term math can look different, though. Between energy savings and the longer lifespan, tankless often works out cheaper over time – if you plan to stay in your home long enough to realize those savings.
What Is the Downside of Tankless Water Heaters?
They’re not perfect for everyone. Some of the main downsides of tankless water heaters include the significant upfront cost, flow rate limitations, temperature fluctuations, waiting time, installation complications, and maintenance needs.
Who Should Not Get a Tankless Water Heater?
You are usually better off with a traditional tank if you’re working with a tight budget, you’re planning to sell your home within the next few years, your home routinely uses hot water in multiple places at one time, your layout makes proper venting difficult, you experience frequent power outages, or if your home would need extensive modifications for a tankless installation.
Final Thoughts
There’s no one-size-fits-all answer in the tankless vs tank water heater debate. Your best choice depends on your specific home, family size, hot water usage patterns, and how long you plan to stay in your current home.
Whether you end up with a tank or tankless system, proper sizing, professional installation, and regular maintenance will ensure you get the most from your investment.
Learn more about our water heater installation and repair services here at Beach Plumbing.