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A Guide to Tankless Water Heaters

Written by MasterClass

Last updated: Jun 7, 2021 • 4 min read

Tankless systems replace storage tank water heaters with a system that heats water on demand.

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What Is a Tankless Water Heater?

A tankless water heater is a home appliance that heats water directly from your building’s pipes as it travels to your faucet. Tankless models work by running cold water through the tankless heating unit whenever a hot water tap is turned on. The water heater uses electrical or natural gas to heat the water and only works when you turn the faucet on, yielding possible energy savings. Once the hot water tap is turned off, the heating elements turn off.

Traditional water heaters store hot water in a heating tank to be used when it is needed. This means that the tank can run out of hot water before another batch of water can be heated again. With a tankless water heater, you will always have enough hot water.

What Are the Differences Between a Tank and Tankless Water Heater?

Tankless hot water heaters use a small on-demand heating system to heat water while tank-based water heaters heat and store water in a large tank. When you turn on your faucet for hot water, a tank-based water heater will provide it from the tank, and the tankless heater will draw it directly from your pipes and heat it in the heating system. Here is an overview of some of the other differences between tank-based and tankless water heaters.

  1. 1. Energy efficiency: Whether you’re considering an electric tankless water heater or a gas tankless water heater, this system is more energy-efficient than a water tank because the heating system only works when you need water. Traditional water heaters are always using gas to keep the water in the tank warm.
  2. 2. Cost: Tankless water heaters are more expensive than your average water tank because they are newer, more premium systems. Installers will charge more to put them in your house, and the price of a new water heater will be more expensive than if you choose a tank-based system.
  3. 3. Electric vs. Gas: Many tankless water heaters are electric, although some use gas or propane. Traditional water tanks usually heat water through the home’s gas line and gas burners.
  4. 4. Space: Tankless water heaters take up much less space than tankless water heaters. A tankless water heater can be installed on the wall out of the way and is about the size of a square foot. On the other hand, a small tank water heater requires space in your home or apartment for a tank that can hold around 50 gallons (or more) of water.

5 Advantages of Tankless Water Heaters

Here is an overview of a number of advantages that owning a tankless water heater can have for homeowners.

  1. 1. They are energy-efficient. Tank-based water heaters use energy to keep your water warm even when you’re not using it. A tankless water heater only uses energy when you turn your faucet on for hot water.
  2. 2. They don’t take up much space. Hot water tanks can be up to five feet in height and they tend to take up lots of space in your home or apartment. Tankless units are only about a square foot in size, saving you plenty of space.
  3. 3. You will always have a hot water supply. Tankless water heaters heat your water on demand and offer an endless supply of hot water. Tank-based water heaters can run out of hot water, leaving you only with cold water before the tank heats up again.
  4. 4. Tankless heaters have more longevity. Consider a tankless system you’re shopping for a new water heater and you want the most durable model. The average tankless water heater lasts for as long as 25 years, while tank-based heaters last around eight to ten years.
  5. 5. Long-term savings. Tankless water heaters are typically more expensive than tanks, but the longevity and energy efficiency of the product may end up saving you money in energy costs.

4 Disadvantages of Tankless Water Heaters

Here is an overview of some of the possible disadvantages of owning a hot water heater.

  1. 1. Power outages can compromise your hot water. Electric models of tankless water heaters run on electricity, meaning that you will lose your hot water if your power goes out.
  2. 2. Venting the unit can be difficult. Tankless water heaters need proper venting because heating elements become very hot. This limits the places in your home where you can safely install your tankless water heater. Consider this when choosing a place to put the unit during the water heater installation.
  3. 3. Water usage. If your home uses a high volume of water, your tankless water heating system may be unable to meet the demand. This is only a problem if you've chosen a tankless unit that doesn't meet the water needs of your home. Consider the flow rate of your tankless unit to ensure it will manage the amount of water you typically use. Consult a plumber about which model might be the best for your home.
  4. 4. Tankless heaters are more expensive than tank water heaters. While a tankless water heater can save you money in the long run, the initial purchase and installation costs are likely to be high. However, over the course of many years, it will end up saving you money.

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