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Choosing Residential Water Heaters – Tanked or Tankless?

Residential Water Heater Tanked or Tankless

Residential water heaters are a mainstay in the majority of American homes. Winter temperatures tend to plummet to incredibly low temperatures, and a hot bath or shower at such a time is not only necessary but priceless.

With technological advancements, residential water heaters have undergone a metamorphosis over time. Both tanked and tankless residential heating systems are most prominent on the market. There’s not a one-size-fits-all solution, meaning that each house requires a customizable and suitable setup for maximum reliability and efficiency.

What to Consider Before Purchasing a Water Heater

Each household poses a unique set of requirements, meaning that homeowners need proper insight on the strengths of each heating solution before making an informed decision.

Here are some of the considerations made before settling on the ideal residential water heater:

  • Installation Cost: High installation costs can prove deterrent. If a water heater costs too much to install, a homeowner may opt for a more affordable option provided it serves the desired purpose. Professional insight regarding this is crucial as it avoids unwanted delays and stalled projects. Before advising a homeowner on an ideal water heater, enquire about the allocated budget for purposes of clarity.
  • Size: For instance, when using a tanked water heater, a big home will require a bigger tank compared to a smaller household. A suitably sized tank ensures that the homeowner has a sufficient supply of hot water round the clock. Picking a smaller tank may bring about some unwanted inconveniences, such as the lack of hot water on the opposing side of the home from where the water heater is installed.
  • Energy Efficiency: Almost all household expenses run on a budget. It is important to understand how much power each type – and size – of water heater consumes monthly or annually before commissioning an installation. Typically, tanked water heaters consume more energy than tankless ones. The bigger the tank, the higher the heating costs. It’s also noteworthy to consider the energy differences between gas and electric water heaters.
  • Geographical location: Tankless water heaters rely on water flow for efficiency. In colder, northern climates, they may not prove as efficient as the cold causes freezing and interferes with the water flow. Tanked residential water heaters will prove more effective in such locations. Gas-powered tankless water heaters in cold climates perform better than their electric counterparts.

As a professional, you need to understand how each heating system works as well as taking into consideration other factors before recommending the ideal residential water heater installation. Let’s have a closer look at the defining characteristics of each system.

Tanked Water Heaters

This model remains the most common or most popular pick for most homeowners. Tank water heaters, as the name suggests, comprise of a storage compartment that holds heated water for use when needed. The sizes of the tanks vary, with available sizes ranging between 30 and 80 gallons. These water heating systems run on either gas or electricity.

water heater cost by gallon


There are several advantages to having a tank or storage water heater:

  1. Simple technology: Storage water heaters employ simple technology and are therefore easy to install and maintain. The system employs a heating element that maintains the temperature of the water with the aid of a thermostat.
  2. Fuel variety: Tank water heaters run on a variety of fuels. The residential heating system will readily operate on gas, electricity, liquid propane, solar, and geothermal energy. This flexibility makes storage water heaters a suitable option for many households.
  3. Low installation costs: Tanked water heaters are readily available and cost notably less in terms of installation expenses. For homeowners seeking an affordable heating option, storage water heaters are the best choice.
  4. Ideal for northern climates: While tankless water heaters may pose challenges for homes in colder regions, storage water heaters readily keep your water hot even in extremely cold temperatures.


Despite being a firm favorite for many, there are a few downsides to having a tanked water heater:

  1. High heating costs: Storage water heaters use a heating element and a thermostat to ensure a more or less constant temperature for the water in the tank. Hot water will always begin cooling the moment heating stops, prompting continuous heating periodically. This mechanism consumes energy throughout the day and, predictably, results in relatively high heating costs. To reduce heating expenses, homeowners can use programmable thermostats or timers.
  2. Standby heat loss: Standby heat loss is inevitable with storage water heaters. Any drop in temperature results in the element beginning the heating process yet again. The number of times this cycle comes about may be minimized by using insulated tanks that retain heat effectively. Professionals should advise homeowners on the best models and the most efficient systems available on the market today. One should go for a heater with a high Energy Star rating.
  3. Space: Tanked water heaters take up more space compared to tankless systems. In a house or apartment where space is a big concern, this heating option presents a challenge as they cannot be installed outside the house like a tankless water heater.
  4. Replacement costs: Despite a lower initial installation cost, storage water heaters have a shorter shelf life than on-demand water heaters. Homeowners may need a replacement every 10 or 15 years, which translates to additional expenses.

Tankless Water Heaters

Since tankless water heaters don’t require a tank to hold hot water, they pose a lesser leaking risk. These heating systems heat the water when the taps are opened before running the water to an outlet. Since the heater goes on whenever hot water is needed, energy costs remain relatively low compared to the traditional storage water heaters. Due to their mode of operation, they’re often referred to as on-demand water heaters.

When purchasing a tankless water heater, a homeowner needs proper insight on the:

  • Flow rate in gallons per minute (GPM) – this is the amount of water that the tankless system can heat in a minute. An estimate of the highest amount of water used in any instance helps the homeowner make a good pick.
  • Temperature rise – this is typically between 120 and 140 degrees. The temperature rise is the extent to which your heating system needs to heat the groundwater so that the user gets the desired temperatures at the outlet.

 Desired Temperature – Incoming Water temperature = Temperature Rise

Gas-fired tankless heaters are the best in terms of energy savings, followed by electric residential water heaters.


There are some notable upsides to using a tankless water heater:

  1. Energy efficiency: On-demand water heaters operate when there’s a need for hot water. By comparison, a thermostat regulates and switches on tanked water heating systems whenever the water in the tank cools down. The tanked heating system goes on and off periodically throughout the day. By comparison, on-demand heating saves homeowners a considerable amount in heating expenses by only operating when needed.
  2. POS installation: Tankless systems can easily be installed anywhere and efficiently serve the household’s hot water requirements. A plumber can readily identify a spot for the heating unit and set up the water heater without interfering with the home’s water system. Storage water heaters on the other hand, cannot be installed outside and typically require more space.
  3. Long shelf life: Tankless water heaters don’t require replacement frequently and may provide good service for up to 20 years or more. Hot water tanks normally have a lifespan that’s about half that. Despite a slightly higher installation cost, it is a sound investment.
  4. Unlimited hot water supply: When correctly used, a tankless heating system will provide an unlimited supply of hot water. Storage heaters are limited by tank capacity and are incapable of such a feat. For proper service, advise the homeowner on the heating capabilities of each model in terms of gallons per minute.


Tankless residential water heaters have some disadvantages:

  1. Cost. Tankless residential water heaters cost considerably more than storage water heaters. The purchase cost is higher, accompanied by a notable installation fee as well. Most homeowners looking for affordable solutions shy away from this option due to the high initial costs.
  2. Expensive changeover: If a homeowner wants to switch from a tanked to tankless heating system, it will prove significantly expensive.
  3. Inconsistent water temperature at high demand: If someone wants to shower and do laundry using a tankless system, water temperatures may fluctuate. In the same situation, an aptly-sized storage residential water heater will easily handle multiple users with ease.
  4. Capacity: Even with a higher GPM (gallons per minute) capability, large homes will often require more than one tankless water heater, which translates to additional costs.

The Bottom Line
tank vs. tankless water heaters

Each heating option has its pros and cons. However, each home has its unique heating needs, and, often, a budget. Before a homeowner makes an informed pick, it is necessary to do an objective comparison to establish suitability. It is at this stage that the expertise of the plumber comes in. Professional insight goes a long way in ensuring that the consumer gets the right heating solution for his or her home.

Not only does professional insight play a significant role in the decision-making process for the homeowner, but once selected, choosing the right water heater installation supplies is just as important. Supply Smart offers a wide range of high-quality water heater connectors and installation supplies, as well gas connectors and gas valves, for the plumbing professional.

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