Pros and Cons of Tankless Water Heaters

Updated June 10, 2021
Modern brick style shower running hot water Images Plus/Getty Images

Should you pay more up front for hot water on demand?

Get quotes from up to 3 pros!
Enter a zip below and get matched to top-rated pros near you.

Are Whole House Tankless Water Heaters Worth the Investment?

Tankless water heaters have gained popularity in recent years, and for good reason. As an alternative to the traditional hot water heater, tankless systems provide greater energy efficiency and faster, on-demand heating. Plus, their compact size is a major selling point, especially if you’ve officially run out of storage space (looking at you, 9’ tall Christmas tree). But tankless water heaters aren’t without their drawbacks, including higher up-front costs and sometimes complicated installation.

The Pros of Tankless Water Heaters

Tankless water heaters offer a number of benefits over traditional hot water heaters.

Energy Efficiency

One of the biggest pros of tankless heaters is that they heat the water pretty much on demand, meaning that you’re only heating the water when you need it. In a traditional hot water heater, the tank storing your water is constantly being heated, which can drive up energy consumption (not to mention sticking you with rusty and discolored water when your tank begins to age and fail). A tankless water heater can save you thousands of dollars in energy costs over the lifespan of the system because you’re not paying to heat water when you don’t need it.

On-Demand Heating

Fans of tankless systems claim that tankless heaters heat water faster than traditional ones. In a traditional tank system, you can find yourself waiting for the tank to refill and the water to warm, especially if you’ve just used the dishwasher or completed a load of laundry. The pressure sensors activate the heating coils, meaning that the water is heated on-demand, as you use it. That means no more jockeying to be the first in the shower in the morning—go ahead, hit that snooze button.

Compact Size

Another perk of going tankless is the relatively compact footprint of these systems. Even whole-house tankless systems are only about the size of a large suitcase, meaning they’re often much smaller than traditional hot water heater tanks. This not only can allow you to save space in your basement or laundry room, but it also gives you more options for installing your tankless heater elsewhere in your home. For instance, installing the heater near an access point, such as in a bathroom or kitchen, can make for faster, better, and more efficient heating. Plus, it’s easier to routinely visually inspect your tankless heater if you’re not having to climb over mountains of boxes and peer around gas and supply lines just to make sure all systems are go.

The Cons of Tankless Water Heaters

While there are a lot of benefits to tankless water heaters, there are also some drawbacks.

Premium Costs

While tankless heaters can produce big savings in your home energy costs, the up-front costs of a tankless system can be significant, especially when compared with a traditional water heater. Installing a tankless water heater isn’t generally something you want to try to do yourself unless you have experience. So you’ll need to factor in not only the cost of the system but also of labor. This means that the average costs to install a tankless system can range anywhere from $270 at the lowest end to more than $6,000 if you end up having to retrofit your entire plumbing system. For instance, installing a tankless water heater might mean you’ll also need to install new pressure regulators and termination vents to keep the hot water flowing strongly and safely.

Installation Challenges

In most cases, installing a tankless water heater involves more than just swapping out the new system for the old. Because it’s a relatively new technology, the odds are you’re going to need to have some retrofitting done to your plumbing system to get the new heater running safely and well. This could include, among other things, new pipes, vents, and fittings. In addition, you may also need a permit and/or a safety inspection depending on where you live.

Not-So-Instantaneous Heating

One of the biggest selling points of tankless heaters is that they provide hot water almost instantly, no matter how much hot water has just been used. But the truth is that the “instant” tankless water heater is not always so instantaneous. In fact, you might not notice much difference, if any, between the tankless and the standard hot water heater when it comes to getting, or keeping hot water. 

There are lots of factors that can affect how long it takes for the water to get hot or how much you can use before running out. The kind of tankless water heater you choose and the distance from the heater to the faucet, for instance, will determine how long it takes to get the water hot.

The Takeaway

There are both pros and cons to tankless water heaters. But understanding the benefits and the drawbacks of these systems will help you determine whether a tankless system or a conventional hot water heater is right for your home. To help you decide, talk to a water heater installer near you.

Need professional help with your project?
Get quotes from top-rated pros.