Tank vs. Tankless Water Heaters: Which One to Choose?

In almost every basement there’s a hot water tank that regulates your household’s ability to enjoy the luxury of hot water coming out of every hot water faucet. 

However, you can get the same result from using an electric tankless water heater which is a much more cost-effective solution. 

The type of water heater that’s commonly utilized in most households is known as a storage water heater, but these are slowly but surely making way for tankless water heaters now. 

How Do These Water Heaters Work?


The average storage water tank heater can carry and store up to 60 gallons of water at a time. 

However, factors such as the amount of water that you use and the size of your household all contribute to the carrying capacity that you need for your hot water tank. 

These tanks are very effective at keeping water hot using different types of energy sources, from propane to fuel oil, electricity, and gas, so that you can have hot water whenever you need it. 


Also known as an on-demand water heater, a tankless water system is one that produces water on demand which means that the water isn’t stored inside a tank. 

This system uses a heat exchanger to heat the water up as it passes through the unit. This makes it incredibly efficient because you’re not heating water unnecessarily. 


  • Tank

Tankless heaters are usually costlier than a tank water heater. For instance, we forked out $570 for an electric tank water heater while a 50-gallon gas model set us back $600. 

Of course, we would’ve paid more if we had gotten tanks with a larger carrying capacity but it still wouldn’t have been as much as what’s required for a tankless system. 

  • Tankless

We tested nine tankless water heaters for this experiment, and they ranged in price from $525 to $1,150. 

Then you have to factor in the installation of the heater, which can set you back another $800 to $1,500, especially when you consider things like gas supply and various venting requirements that come with these heaters. 


  • Tank

In order to bring you this comprehensive comparison between tankless and tank-based water heaters, we made sure to put both options through their paces. 

Basically, we took tank water heaters that run on both electricity and gas and determined that they were able to heat the water up to a temperature of 120° F.

  • Tankless

During the testing phase, we noticed that gas and electric instant water heaters greatly differ in their flow rate and temperature output levels. 

Energy Efficiency

  • Tank

During our analysis, we discovered that gas models don’t consume as much energy as electric models. 

In fact, according to our calculations, a gas water heater has an annual operating cost of $245, while an electric model will cost $580 per year to run. 

  • Tankless

It’s evident to us now that the average homeowner has a better chance of saving money on energy costs by opting for a tankless water heater, regardless of whether it’s a gas or an electric model. The traditional water heater appears to be quite the energy guzzler in comparison. 

Although, it’s worth noting that tankless water heaters that run on gas come with an excellent rating when it comes to annual energy consumption, while an electric model can only manage a fair rating. 

Generally, it would cost $195 per year to operate a gas tankless water heater and $535 for an electric model. 


The verdict is clear. If you want an efficient way to make sure that you always have warm water coming out of your faucets, then you’ll do well to opt for a tankless system. 

Sure, a tankless water heater costs more upfront, but as you’ll soon find out, the long-term benefits are well worth it. 

You’ll end up with a significantly reduced gas bill and most of these heaters come with a generous 12 to 15-year warranty to boot, so you know they’re going to last for at least a decade! 

So, if your budget allows, considering replacing your old heater with tankless systems instead of paying for water heater repair.


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