What is a tankless water heater and should I get one?

Unlike traditional tank-style water heaters, which continuously use energy to maintain a hot water supply, tankless water heaters only expend energy when you turn on a hot water tap or when you’re using appliances. Less stored water to heat means less cost—and let’s not forget, a more compact, wall-mounted design.

Tankless water heaters produce an endless supply of hot water, take up less space, have a lower risk of leaking, are safer, and have a significantly longer lifespan on average. According to the U.S. Department of Energy, tankless water heaters can be between 8% and 50% more energy-efficient than tank-style water heaters.

Gas-burning tankless water heaters should operate for 20 years or more, two or three times longer than tank-type heaters. Tankless electric units have shorter life spans, on the order of 7 to 10 years.

The main disadvantage of tankless water heaters is their upfront cost (unit and installation) is significantly higher than tank-style heaters. Including installation, tankless water heaters cost 3 times more than tank-style water heaters on average.

Prices range from about $170 for small gas-fired units to more than $2,000 for high-output heaters that can supply two showers at the same time; $1,000 is about average.

Tankless hot water heaters are available in room or whole-house sizes. Calculate how many appliances or fixtures need hot water in order to determine the best size unit for your home.

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