Differences Between Tank and Tankless Hot Water Heaters

Having hot water is essential for your home. So when it comes time to replace your hot water heater, you want to make a smart decision that will serve you well for years to come. The biggest question we get is: what’s better, a tankless or tank hot water heater? The two type of systems work very differently, and there are advantages and disadvantages of both, which we’ll cover in this article.

Before we dive in, if you’re not sure if it’s time to replace your hot water heater, read our article on that very topic.

Tank Hot Water Heaters

Electric Heater Options for the HomeWhen most people think of a hot water heater, they picture a large tank that can be 5 or 6 feet tall. This type is called a tank or storage hot water heater. The unit works by keeping 30-80 gallons (depending on the size of the tank) of water warm at all times. When you turn on your faucet or shower, the hot water runs through your pipes, while cold water fills back up the tank and is heated.

While modern tank hot water heaters are much more efficient than older models, the fact is that a lot of energy is used (or wasted, depend how you look at it) to keep the water warm at all times. So essentially, you’re paying for hot water even if you’re not using it.


  • Low upfront cost to purchase
  • Typically easier to install when replacing
  • Large amount of hot water available at one time


  • Significant heat loss
  • Requires room for a large tank
  • When all hot water is used, takes time for tank to refill and warm
  • Annual maintenance recommended
  • Short service life: 8-12 years

Tankless Hot Water Heaters

Is a Tankless Hot Water Heat Right for Your HomeIf you’re looking to maximize the energy efficiency in your home, then you may want to consider a tankless hot water heater. These are sometimes called on-demand hot water heaters because they warm up only when needed—such as when you turn on your shower or dishwasher. These tankless systems can heat up water very quickly, and eliminate the need to store hot water around the clock. For a family that uses 41 gallons or less of hot water, a tankless hot water heater can be up to 34% more efficient than a tank system (source: Energy.gov).

The biggest downside of tankless hot water heaters is the upfront costs. The unit and installation of a tankless hot water heater can be around three times the cost of a traditional tank system. While it’s not guaranteed, the idea is that you will make the money back from lower energy bills over the lifespan of the hot water heater.

One thing we should point out is that it may take a few seconds for the hot water to reach the faucet you’re using, but the delay isn’t long enough to cause an issue for most people. Also, tankless systems can produce a limited flow of hot water at one time (around 2-5 gallons per minute), which is suitable for normal usage. But if multiple sources are using hot water, such as two showers and the dishwasher running simultaneously then there might not be enough to go around.


  • Much more energy efficient since water is heated on-demand
  • Constant hot water when needed
  • Smaller unit, requires less space
  • Lower operating costs – estimated $100 or more in annual energy savings for typical family
  • Annual maintenance not required


  • Higher upfront costs
  • Potentially more difficult installation
  • Limited hot water at one time
  • May not be cheaper in the long run depending on energy savings and total service life

As you can see, there are many pros to switching to a tankless hot water heater. But for some people, a new tank system is still a great choice. If you’re in the Murrieta and Winchester area, and need help deciding what type of hot water heater is right for your home, give Liberty Plumbing a call today at (951) 760-4215.

We are honored to serve you and will show the utmost integrity while taking care of your needs.

You can depend on our highly trained, certified staff and know we have the ability to exceed your expectations.

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