Should You Switch to a Tankless Water Heater?
Choosing the right water heater is crucial for household efficiency, comfort, and long-term savings. If you’re considering a switch, you’ve likely heard about tankless water heaters—a modern alternative to traditional storage tanks. But is it worth making the switch?
Traditional water heaters store hot water in a tank and continuously heat it, ensuring a ready supply. However, this means they consume energy even when hot water isn’t in use, leading to higher energy bills.
On the other hand, tankless water heaters (also known as on-demand or instantaneous water heaters) heat water only when needed. This key difference has significant implications for cost, energy efficiency, and overall performance.
In this guide, we’ll explore the cost efficiency, performance, installation requirements, and maintenance considerations of tankless water heaters. By the end, you’ll have a clear answer to whether switching to a tankless model is the right move for your home.
Cost Efficiency and Energy Savings
Switching to a tankless water heater offers significant long-term financial and energy-saving benefits. While traditional water heaters constantly heat and store water, consuming energy even when not in use, tankless models operate on-demand, meaning they only heat water when required. This fundamental difference leads to reduced energy consumption, lower utility bills, and a more environmentally friendly household.
Lower Energy Consumption
One of the biggest advantages of tankless water heaters is their ability to eliminate standby heat loss. Traditional water heaters keep a reservoir of hot water in constant supply, meaning energy is continually used to maintain temperature—even when you’re not actively using hot water.
Tankless water heaters, in contrast, only activate when a hot water tap is turned on. This means energy is consumed only when needed, making the system far more efficient. The U.S. Department of Energy estimates that tankless water heaters are 24–34% more efficient than traditional models for homes that use moderate amounts of water.
For households that use more water, the efficiency gains are still notable, typically 8–14% higher than conventional storage heaters. This efficiency translates into lower energy usage over time, reducing the environmental impact and saving money on utility bills.
Hot Water on Demand Without Waste
A common problem with traditional water heaters is running out of hot water, especially in larger households or during peak usage times (such as morning showers). Since tankless water heaters don’t store hot water but rather heat it instantly, they ensure an endless supply as long as the unit’s flow rate can handle the demand.
Additionally, traditional water heaters often overheat water slightly above the desired temperature to compensate for heat loss in the tank. This results in unnecessary energy consumption. With tankless models, water is heated only to the exact temperature needed, eliminating wasted energy.
Increased Lifespan = More Savings Over Time
Tankless water heaters also offer significant savings in terms of longevity and replacement costs. Traditional water heaters typically last 10–15 years due to tank corrosion, sediment buildup, and wear.
In contrast, tankless water heaters can last 20 years or more with proper maintenance. Their absence of a storage tank reduces the risk of corrosion and scale buildup, extending their operational lifespan. Since replacing a water heater can be costly and inconvenient, the longer lifespan of a tankless system adds to its long-term financial benefits.
Reduced Maintenance and Repair Costs
While all water heaters require occasional maintenance, tankless models tend to have fewer major issues than traditional storage tanks. With a standard tank, corrosion, leaks, and sediment buildup are common problems that may require costly repairs or even full replacement.
Tankless water heaters require periodic descaling and flushing, particularly in areas with hard water, but these tasks are straightforward and prevent major system failures. Fewer breakdowns mean lower maintenance costs over the lifespan of the unit.
Better Efficiency for Large and Small Households
A key concern for many homeowners is whether a tankless water heater will be as effective as a traditional model when it comes to meeting their household’s needs. The answer depends largely on water usage patterns and household size.
- For smaller homes or apartments, tankless systems are ideal because they don’t waste energy heating water that isn’t used.
- For larger households, tankless water heaters still provide efficiency gains, but selecting the right size and flow rate is crucial. Some families opt for multiple tankless units to meet high simultaneous demand, such as running multiple showers and appliances at once.
Energy Efficiency Boosts Home Value
Homes equipped with energy-efficient features often have a higher resale value. Modern buyers are more conscious of energy costs and environmental impact, making a tankless water heater an attractive upgrade.
Additionally, some government programs and local energy providers offer rebates and incentives for installing high-efficiency water heaters, further improving cost savings.
By reducing standby energy waste, lowering maintenance needs, and lasting significantly longer, a tankless water heater can be a financially smart decision. While the upfront costs might be higher, the long-term savings in energy, repairs, and replacement costs make it a cost-effective upgrade for many households.
Features and Performance Considerations
Choosing a tankless water heater involves understanding its key features and how it compares to traditional storage water heaters. While tankless models provide energy efficiency, a continuous hot water supply, and a compact design, they also have limitations, such as flow rate capacity and installation requirements. Below, we explore the essential performance aspects of tankless water heaters to help you decide if they’re the right fit for your home.
Endless Hot Water Supply: No More Running Out
One of the biggest advantages of a tankless system is that it provides hot water on demand. Unlike traditional water heaters that store a limited amount of hot water in a tank, tankless models heat water instantly as it passes through the unit.
This means:
✅ You never run out of hot water, even if multiple people take showers in succession.
✅ There’s no waiting time for the tank to refill and reheat.
✅ Ideal for households with varying hot water needs, since the heater only activates when required.
However, flow rate capacity plays a crucial role. If multiple appliances (such as a shower, washing machine, and dishwasher) demand hot water at the same time, a single tankless unit may struggle to keep up. Selecting the right GPM (gallons per minute) flow rate is essential to ensure consistent performance.
Compact and Space-Saving Design
Traditional water heaters take up significant floor space, especially models with large storage tanks. This can be a problem in smaller homes, apartments, or utility closets.
Tankless water heaters are:
✅ Wall-mounted, freeing up valuable floor space.
✅ Available in indoor and outdoor installation models.
✅ A great solution for homes with limited space or those looking to maximize utility areas.
The compact design makes them ideal for condos, tiny homes, or homes undergoing renovations, where space efficiency is a priority.
Higher Energy Efficiency with Less Waste
Tankless water heaters are designed to reduce energy waste. Traditional storage water heaters experience standby heat loss, meaning they constantly use energy to maintain the water temperature, even when not in use.
Tankless models only heat water when needed, leading to:
✅ Higher efficiency ratings than standard storage heaters.
✅ Lower overall energy consumption since they don’t reheat stored water.
✅ Reduced carbon footprint, making them more environmentally friendly.
Many tankless models also include self-modulating technology, which adjusts the energy output based on real-time demand. This ensures optimal efficiency rather than running at full power constantly.
Flow Rate Considerations: Can It Handle Multiple Appliances?
While tankless heaters provide unlimited hot water, they are limited by their flow rate. Flow rate, measured in GPM (gallons per minute), determines how much hot water the unit can deliver at one time.
To ensure your heater can meet household demand, consider these approximate GPM needs:
- Shower – 1.5 to 2.5 GPM
- Dishwasher – 1 to 2 GPM
- Washing Machine – 2 to 3 GPM
- Kitchen Faucet – 0.5 to 1.5 GPM
If multiple fixtures are used simultaneously (e.g., a shower and washing machine running together), the unit must have a high enough flow rate to accommodate the combined demand.
For larger households, a higher-capacity tankless unit or multiple units installed in parallel may be necessary to maintain performance.
Fuel Type: Gas vs. Electric Tankless Heaters
Tankless water heaters are available in natural gas, propane, and electric models. The choice depends on:
✅ Availability of fuel sources – Homes with natural gas lines may find gas models more efficient.
✅ Upfront vs. long-term costs – Electric models have a lower initial price but may cost more to operate depending on electricity rates.
✅ Flow rate needs – Gas models typically have higher flow rates than electric versions, making them better for larger households.
✅ Installation requirements – Gas units require proper venting, while electric models do not.
Longevity and Durability
Tankless water heaters have a longer lifespan than traditional storage models, lasting 20+ years compared to 10–15 years for tank-based systems.
Their lack of a storage tank means they are:
✅ Less prone to corrosion and leaks
✅ More resistant to mineral buildup, especially with regular maintenance
✅ Less likely to suffer from catastrophic failures like a leaking or bursting tank
However, hard water can still cause scale buildup inside a tankless heater, reducing efficiency. Regular descaling and maintenance can extend the unit’s lifespan significantly.
Installation Complexity: Does Your Home Need Upgrades?
While a tankless system offers superior efficiency, installation can be more complex than simply replacing a traditional tank. Key considerations include:
- Gas line upgrades – Gas-powered tankless models may require a larger gas line to supply enough fuel for on-demand heating.
- Electrical upgrades – Electric models may need higher voltage or a dedicated breaker to handle power demands.
- Venting requirements – Gas units require proper venting to expel combustion gases safely.
- Water pressure compatibility – Some models require specific water pressure levels to operate efficiently.
For homes switching from a storage heater to a tankless model, professional installation is often recommended to ensure the right adjustments are made for optimal performance.
Maintenance Requirements: Keeping Your Unit in Peak Condition
Tankless water heaters require less maintenance than traditional tanks but still need periodic servicing to ensure long-term efficiency. Common maintenance tasks include:
✅ Flushing the system annually – Removes mineral buildup and prevents reduced efficiency.
✅ Checking and cleaning water filters – Some models include filters that need regular cleaning to avoid clogs.
✅ Inspecting gas lines and venting – For gas models, ensuring proper ventilation and gas flow prevents safety hazards.
Hard water areas require more frequent maintenance, so installing a water softener can help extend the unit’s lifespan and maintain efficiency.
Noise Levels: Is It Quieter Than a Traditional Heater?
Tankless water heaters are generally quieter than traditional models, but some gas-powered units produce a noticeable whooshing or clicking sound when igniting.
If noise is a concern, look for:
✅ Electric models, which tend to operate silently
✅ Units with sound-dampening technology
✅ Proper installation, as loose pipes or improper venting can increase noise levels
Final Thoughts on Features and Performance
A tankless water heater offers:
✅ Unlimited hot water on demand
✅ Higher energy efficiency, leading to long-term savings
✅ Compact, space-saving design
✅ Longer lifespan and reduced maintenance costs
However, flow rate limitations, installation complexity, and upfront costs should be carefully evaluated before making the switch. Choosing the right size, model, and fuel type ensures you get the best performance for your household’s needs.
If your home has high water usage, a large family, or requires multiple appliances running simultaneously, opt for a higher-capacity model or consider installing multiple units in parallel.
By understanding these performance considerations, you can make an informed decision on whether a tankless water heater is the right fit for your home.
Best Tankless Water Heaters
Choosing the right tankless water heater depends on factors such as flow rate, energy source, household size, and efficiency. Below are some of the most reliable and highly rated tankless water heaters currently available, each with unique features tailored to different needs.
Rinnai RU199iN – High-Performance for Large Households
The Rinnai RU199iN is a natural gas-powered tankless water heater designed for large homes that require high water demand. With an impressive 11 GPM (gallons per minute) flow rate, this unit can easily handle multiple showers, washing machines, and dishwashers running simultaneously.
It features ThermaCirc360 technology, which recirculates hot water within the pipes, minimizing wait times for hot water and reducing water waste. This makes it a great option for households that experience long delays when waiting for hot water to reach the taps.
Additionally, the built-in Wi-Fi compatibility allows homeowners to monitor and adjust the unit remotely, offering greater control over energy consumption and performance. Its high energy efficiency and low NOx emissions make it an environmentally friendly choice.
Stiebel Eltron Tempra 24 Plus – Energy-Efficient Electric Model
For homes that do not have access to natural gas or prefer an electric alternative, the Stiebel Eltron Tempra 24 Plus offers consistent hot water with advanced flow control technology. With a 5 GPM flow rate, it can handle standard household use but may struggle if multiple high-demand appliances run at once.
One of its standout features is its Advanced Flow Control, which automatically adjusts water temperature if demand exceeds its capacity, preventing sudden cold-water bursts. Unlike traditional tankless models, this feature ensures a more comfortable and reliable hot water experience even when usage is high.
As an electric unit, it does not require venting, making it easier to install in smaller homes, condos, or apartments. It also operates silently, making it an excellent choice for homeowners sensitive to noise from gas-powered heaters.
EcoSmart ECO 27 – Affordable and Space-Saving Option
The EcoSmart ECO 27 is a budget-friendly electric tankless water heater with a compact design, making it ideal for smaller homes or apartments with moderate hot water demands. With a 6.5 GPM flow rate, it is capable of handling two showers and a sink simultaneously in warmer climates, but performance may drop slightly in colder regions.
It uses self-modulating technology, which adjusts energy consumption based on hot water demand, reducing unnecessary power usage and keeping energy costs low. Its digital temperature control allows users to precisely adjust water temperature in one-degree increments, giving more control over comfort and efficiency.
While this unit is highly efficient for smaller households, it may not be sufficient for homes with multiple simultaneous hot water needs. However, for those looking for an economical and space-saving option, the EcoSmart ECO 27 is a strong contender.
Rheem RTGH-95DVLN – Reliable and Efficient for Whole-Home Use
The Rheem RTGH-95DVLN is a natural gas condensing tankless water heater designed for medium to large households. With a 9.5 GPM flow rate, it can easily support multiple showers, kitchen use, and laundry needs simultaneously.
One of its most notable features is its condensing technology, which captures and reuses exhaust heat, improving energy efficiency and lowering operating costs. This makes it one of the most energy-efficient gas-powered tankless water heaters available.
It also includes built-in safety features, such as freeze protection and overheat prevention, making it a durable choice for colder climates. With low NOx emissions, this unit is more environmentally friendly than many standard gas water heaters.
For homeowners seeking a reliable, high-performance tankless water heater with low maintenance requirements, the Rheem RTGH-95DVLN is an excellent option.
Choosing the Right Tankless Water Heater
Each of these tankless water heaters offers unique benefits depending on household size, fuel type, and hot water demand.
- For large families needing a powerful and high-flow system, the Rinnai RU199iN is a solid choice.
- For homes requiring an electric option with smart flow control, the Stiebel Eltron Tempra 24 Plus stands out.
- For budget-conscious buyers in need of a compact and efficient unit, the EcoSmart ECO 27 provides a cost-effective solution.
- For whole-home heating with advanced energy efficiency, the Rheem RTGH-95DVLN delivers reliable and sustainable performance.
When selecting a tankless water heater, consider flow rate, fuel type, installation requirements, and maintenance needs to ensure it meets your household’s hot water demands effectively.
Frequently Asked Questions (FAQ)
Switching to a tankless water heater raises several common questions regarding efficiency, performance, installation, and maintenance. Below, we address the most frequently asked questions to help you make an informed decision.
Do tankless water heaters work in cold climates?
Yes, tankless water heaters can work efficiently in cold climates, but their performance may vary based on the incoming water temperature.
- In colder regions, groundwater enters at a much lower temperature, requiring the heater to work harder to reach the desired hot water temperature.
- Choosing a high-flow rate model with a powerful heating element (for electric units) or a strong gas burner (for gas units) ensures adequate heating even in freezing conditions.
- Some homeowners in very cold climates opt for a hybrid solution—a small storage tank in combination with a tankless unit—to preheat water and reduce the energy burden on the heater.
For those in freezing temperatures, selecting a unit with built-in freeze protection can help prevent damage to the system during winter months.
Can a tankless water heater supply hot water to multiple appliances at once?
It depends on the unit’s flow rate capacity (measured in GPM – gallons per minute).
- Smaller models may struggle if multiple hot water appliances are in use simultaneously (e.g., taking a shower while running a washing machine).
- Larger homes with high water usage should invest in a unit with at least 8-10 GPM to ensure a steady supply of hot water across multiple fixtures.
- Some homeowners install multiple tankless units in parallel for higher demand applications.
Before purchasing a tankless water heater, calculate your household’s peak hot water usage and choose a model that meets that demand.
How long does a tankless water heater last?
A well-maintained tankless water heater can last 20 years or more, significantly longer than a traditional water heater, which typically lasts 10-15 years.
- Because tankless systems do not store water, they are less prone to corrosion and rust, which are common issues in traditional tank models.
- Regular descaling and flushing (especially in areas with hard water) can prevent mineral buildup and ensure optimal performance over time.
- Many manufacturers offer warranties ranging from 10 to 15 years, making tankless models a long-term investment.
What kind of maintenance does a tankless water heater require?
While tankless water heaters require less maintenance than traditional models, regular servicing is still necessary to maintain efficiency and longevity.
Key maintenance tasks include:
✅ Flushing the system – Hard water minerals (calcium and limescale) can build up inside the heat exchanger, reducing efficiency. Flushing with vinegar or a descaling solution once a year can prevent this.
✅ Cleaning the inlet water filter – Some models have built-in sediment filters that should be cleaned regularly to prevent clogging.
✅ Checking the venting system – For gas-powered units, ensure that the ventilation system is clear of obstructions to prevent carbon monoxide buildup.
✅ Inspecting electrical and gas connections – Loose wiring or gas leaks can impact performance. A professional annual inspection can help ensure safety and efficiency.
Homeowners in areas with very hard water may want to install a water softener to further protect the heater from mineral deposits.
Are tankless water heaters really more energy-efficient?
Yes, tankless water heaters are significantly more energy-efficient than traditional storage water heaters because they eliminate standby heat loss.
- Traditional water heaters continuously heat and store water in a tank, using energy even when hot water is not being used.
- Tankless systems heat water only when needed, which reduces energy consumption and lowers utility bills.
- According to the U.S. Department of Energy, tankless water heaters are 24–34% more efficient for homes that use less than 41 gallons of hot water per day.
If you want to reduce energy costs and environmental impact, a tankless system is an excellent choice.
Can a tankless water heater run out of hot water?
A properly sized tankless water heater never runs out of hot water, but it can struggle if demand exceeds its capacity.
- Unlike traditional water heaters, which store a limited amount of hot water, tankless systems heat water continuously as long as demand stays within the flow rate capacity.
- If multiple high-demand appliances (e.g., multiple showers and a washing machine) are running at once, the system may not keep up, causing a drop in water pressure or temperature fluctuations.
- Choosing a larger unit or installing multiple units can solve this issue.
For families with high water usage, opting for a high-flow rate model ensures that hot water supply remains uninterrupted.
Do tankless water heaters require a lot of space?
No, tankless water heaters are compact and space-saving, making them ideal for homes with limited installation space.
- Unlike traditional water heaters that require large storage tanks, tankless models are wall-mounted and take up significantly less room.
- They can be installed in small utility closets, attics, garages, or even mounted on exterior walls.
- Some models are designed for outdoor installation, eliminating the need for indoor space entirely.
Their small footprint makes them a great choice for apartments, tiny homes, and houses looking to maximize storage space.
Are tankless water heaters safe?
Yes, tankless water heaters are very safe, and many models come with advanced safety features to prevent overheating, gas leaks, and system malfunctions.
Common safety features include:
✅ Automatic shut-off sensors – Prevents the heater from overheating or operating under unsafe conditions.
✅ Flame failure detection – For gas-powered units, this feature automatically shuts off the gas supply if the burner fails to ignite.
✅ Anti-scald protection – Ensures water temperature does not exceed safe levels.
✅ Ventilation safety controls – Gas models include sensors to detect vent blockages or improper exhaust operation, reducing the risk of carbon monoxide exposure.
As with any appliance, proper installation and maintenance are key to ensuring safe operation.
Final Advice: Is a Tankless Water Heater the Right Choice?
Switching to a tankless water heater is a significant decision that offers energy efficiency, space savings, and an unlimited hot water supply. However, like any home improvement investment, it comes with both advantages and considerations that must be carefully weighed.
If your household prioritizes lower energy bills, long-term savings, and an eco-friendly lifestyle, then a tankless water heater is an excellent upgrade. With on-demand heating technology, you no longer have to worry about running out of hot water or paying for unused standby heating. Additionally, the compact, wall-mounted design makes it an ideal solution for homes with limited space.
However, a properly sized unit is crucial to ensure sufficient flow rate, especially for large families or homes with multiple simultaneous hot water needs. While the upfront costs may be higher than a traditional tank system, the longer lifespan (20+ years) and reduced maintenance offset the initial investment over time.
Before making the switch, consider:
✅ Your household’s peak hot water demand – Will the unit meet your needs without performance drops?
✅ Fuel type and installation requirements – Do you need gas, propane, or electric, and is your home equipped for the transition?
✅ Flow rate and efficiency – Will a single unit be enough, or do you need multiple units for high-demand applications?
For homeowners who value energy efficiency, convenience, and long-term savings, a tankless water heater is a smart, future-proof choice. If you’re unsure about compatibility, consult a professional plumber to assess your home’s setup and determine the best unit for your needs.