Tankless Vs Tank Water Heater: How Does It Work?

Published by 
Last updated: 
October 22, 2018

Tankless vs. Tank Water Heater: Which One Is Right for Your Home?

What Is a Tankless Water Heater System and How Does It Work?

A tankless or on-demand water heater is a component that heats your water as you need it, unlike traditional tank water heaters that keep a constant amount of water hot at a time. In an on-demand system, the water flows through a heating element as it is turned on in the home, ensuring a continuous supply of hot water. With a tank water heater, once the hot water inside the tank is gone, the tank refills and heats that water, which can lead to periods without hot water.

Factors to Consider When Choosing a Hot Water Heater

Type of Fuel

The first step in choosing a water heater is knowing what fuel will power it. The most common options are natural gas and electricity. Fuel costs can vary over time, with gas prices typically lower than electricity but subject to spikes during winter due to increased demand for heat. It's essential to evaluate long-term operating costs when deciding between fuel options.

Home Size and Hot Water Demand

Water heaters, both tankless and tank, have recommended sizes based on the internal square footage of the home and usage. Choosing the right size is crucial to ensure sufficient hot water supply for your household.

Sizing a Tankless Water Heater

To size a tankless unit, you need to know the flow rate and desired temperature rise. Consider the number of items in your home that may need hot water simultaneously, such as showers, faucets, bathtubs, and washing machines. Add up the typical flow rates for these items to determine the average gallon per minute requirement for a tankless unit.

FixtureAverage Flow Rate (GPM)
Faucet1.0 - 1.5

The average temperature rise is calculated by subtracting the incoming water temperature (typically around 50°F) from the ideal heated temperature (recommended setting of 120°F), resulting in an average temperature rise of 70°F.

Sizing a Tank Water Heater

For a tank system, the first-hour rating dictates the size of the water heater. This rating indicates the average amount of hot water the system can supply to the home in one hour if the tank is full. To determine the average amount of hot water needed in an hour, consider your household's peak demand time and usage.

Pros and Cons of Tankless and Tank Water Heaters

Tankless Water Heater


  • Provides hot water virtually on demand
  • Takes up less space than a traditional tank water heater
  • Lasts for more than 20 years
  • Might save you up to $100 per year in energy savings


  • May be strained if too much hot water is demanded at a time
  • More expensive than a tank heater
  • Installation is very costly

Tank Water Heater


  • Reasonably priced
  • Works with the piping in the home
  • Functions well if the proper size


  • Lasts only 10 to 15 years
  • Hot water may run out depending on usage
  • May leak if there are issues
  • Takes up space

According to our research, if your household runs on less than 41 gallons of hot water per day, a tankless system may be the most cost-effective option both short and long-term. However, for families of three or more, a larger tankless system or a storage tank may be the better choice.

Ultimately, the decision between a tankless vs. tank water heater depends on your family's usage and budget. A properly sized tank water heater will serve its purpose well for 10 to 15 years, while a tankless unit, if affordable, can provide on-demand hot water and potential long-term savings.


  1. Original article
  2. Selecting a New Water Heater - Energy.gov

All Things HVAC

Address: 4343 South view lane, Doylestown PA
Phone: 267-356-HVAC (4822)
Hours: Monday - Friday: 9am - 5pm
Copyright © 2024 AllThingsHVAC. All Rights Reserved