Storage Tank vs. Tankless Water Heaters

Storage Tank vs. Tankless Water Heaters

Do you know the last time you replaced your water heater? If it has been 5 or less years, then more than likely there is nothing to worry about. It is, however, always good practice to monitor your existing plumbing conditions and be aware of all your manufacturer warranties in case some unforeseen issues do occur. Is your water heater older than 5 years? 10 years? Then best to be prepared with information when it does come time to replace your water heater.

How old is your water heater? Here is how you find out…

Typically, the model, serial number, and year of manufacturing should be on the tag in plain sight. If it is not clear, call the manufacturer and ask for technical support.

Typically, the model, serial number, and year of manufacturing should be on the tag in plain sight. If it is not clear, call the manufacturer and ask for technical support.

No leaks, consistent energy bills, and a steady flow of hot water throughout the house means your water heater is in good shape. You can always flush your water heater for maintenance and longevity. It is recommended to adhere to manufacturer guidelines and consult a professional before flushing your water heater. If your pilot light goes out, energy bills are unusually high, hot water flow in the house is inconsistent, leaks….these are all signs that your water heater needs repair or may even be time to consider replacement.

Key Factors when Considering Replacement

  • Operating costs and efficiency

  • Installation costs

  • Purchase costs

  • Conditions of existing plumbing

Energy efficiency seems to be on the forefront of everyone’s minds these days when evaluating appliance purchases. If your water heater is over 10 years old, chances are you are probably spending more than you need to for basic day-to-day usages of hot water. The average household devotes more than a quarter of its total annual energy spending to the hot water heater alone. Being that your hot water heater is one of the more expensive appliances to run, this makes your decision all the more important. While energy efficiency is is a vital consideration, purchase and installation costs are imperative as well.

Storage Tank Water Heaters

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Storage tank water heaters are the most commonly used, reliable, simple and familiar to installers. They can be powered by natural gas, propane, oil, electric, and hybrid models are now available. When a fixture calls for it, hot water exits from the top of the tank, while cold water enters the bottom for replenishment.

Storage tank water heaters typically operate around the clock due to reheating water when the temperature falls below a certain threshold. While that may sound inefficient, technology has improved along with better insulation to avoid standby heat loss. Check manufacturer labels for Energy Star rating to select the most energy efficient storage tank water heater.

Check manufacturer label for Energy Star Rating

Check manufacturer label for Energy Star Rating

Installation and purchase costs will be significantly lower than a tankless. Little to no modifications will have to be made to the existing plumbing system, product and material costs would also be minimal. As far as performance, the downside is that the water heating process is not instantaneous and the supply of hot water can temporarily run out. If your household seems to frequently run out of hot water, your unit may be undersized and you may want to consider going with a larger storage tank option to meet the demands of your hot water usage.

Tankless Water Heaters


Tankless water heaters can simply be referred to as providing hot water instantaneously. Rather than maintaining a constant supply of hot water, tankless water heaters heat water on demand. Cold water enters the system and instantly exits, fully heated by either a gas burner or electric resistance heating coils. Not only can tankless water heaters be up to 30% more energy efficient, but also space efficient being significantly smaller than a traditional storage tank. Certainly a lot of upside with operation and performance, the only downside being that all this comes at a premium price. The product itself could be double, sometimes triple the cost of a traditional storage tank, not to mention the installation costs being significantly higher as well. The installer will have to adapt your existing plumbing system to meet the requirements of the tankless system and the installation cost will be predicated on how many modifications have to be made. Tankless water heaters have different requirements for venting, water intake, water output, condensation and electrical connections.

The Bottom Line

Tankless water heaters are a luxury. You will never run out of hot water, energy efficiency and operating costs are lower, and they take up much less space. Performance wise, technology in traditional storage tank water heaters have improved tremendously making them a solid and reliable choice. Essentially, you want to do the math to see when your long term energy savings will outweigh your product and installation costs if you are seriously considering switching to tankless. You may find that the cost effectiveness may not be as great as it initially seemed or maybe you find value in the added luxury of hot water on demand. In any case, you are hopefully more prepared now than before in making an informed decision.

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