Tank vs. Tankless Water Heaters - Which One Is Best?

When Indianapolis area homeowners need reliable hot water, they have two general equipment types to choose from: storage tank water heaters or tankless water heaters. There is no one right choice – the best water heater selection for your home depends on several variables specific to your household and hot water supply needs.

In this comparison of tank vs. tankless water heaters, the plumbing experts of Williams Comfort Air discuss the basics of each type of hot water heater so you have a better feel for each equipment type. We also compare tank storage water heaters and tankless hot water heater systems against each other in several areas, which allows you to easily see the differences between each.

Tank and Tankless Water Heaters

There are two main types of water heaters available for use in Indianapolis homes – tank-style water heater units and tankless water heaters. Each functions in their own way to heat water and deliver the hot water your family needs for various activities throughout your home. Let’s take a look at the basics of each model to introduce you to your hot water heater options.

Tank Water Heaters

Tank storage water heaters are the water heater style homeowners are typically most familiar with – they’ve been around for many years, and most people are used to using this option in their homes. You may also hear this type of water heater called conventional or traditional tank water heaters, as this older technology has been the standard used in homes for decades.

A tank-style heater heats water, then stores it in a tank for use when needed, hence the name storage water heater. These water heaters come in different sizes, with the tank typically ranging from 30 to 50 gallons. The size you need depends on your household size and hot water demands. Tank water heaters operate with either natural gas fuel or are electric water heater models.

With a tank water heater in your home, energy is used around the clock. Storage water heaters keep water within the tank at a desired temperature at all times, ready for use when your taps turn on. Once you go through the hot water in the tank, you must wait for the water heater to replenish its hot water supply before additional hot water is available. You’re likely familiar with this if you’ve ever been the last one in your family to hop in the shower – there isn’t always enough hot water left! This as well as standby heat losses are a few drawbacks of tank-style water heater systems.

Tank water heaters require some floor space for installation – a 50-gallon hot water tank isn’t a small appliance. These water heaters are commonly installed in utility closets, garages, basements, or maybe even directly in your bathroom.

Tankless Water Heaters

Tankless water heaters are a newer water heating technology that has been introduced as an energy-efficient alternative to tank water heaters and their standby heat loss problems. As you have likely guessed from their name, they do not use a tank to hold heated water.

So, where does the hot water come from? Tankless water heaters work differently than tank water heating systems, as they do not heat water ahead of time and hold it in reserve. Instead, they only heat water right when your hot water tap and appliances call for it. As soon as a hot water tap turns on calling for hot water, the tankless water heater heats water to the desired temperature and deliver hot water to the desired outlet. It uses energy when only heating water is warranted.

Tankless water heaters are also sometimes called on-demand water heaters because they heat water on demand rather than pre-heating water for storage. Like tank models, tankless water heaters run bynatural gas or electricity.

Because there is no hot water storage tank, tankless water heaters have a much smaller footprint, which means they require less space for installation. Tankless heaters are typically installed on a wall in a utility room or other area where household appliances are placed, like a garage or basement.

Comparison of Tank vs. Tankless Water Heaters

Now that you have a better understanding of how tank water heater and tankless models operate, let’s compare tank and tankless water heaters. See how a tank and tankless unit performs in the different areas that are important to homeowners when they select a new water heater.

Initial Cost

On-demand water heaters come with higher installation costs, as they cost more to install than a tank-model water heater. A conventional tank water heater runs homeowners around $1,000 for equipment and installation cost while a tankless water heater costs a few thousand dollars for equipment alone. On both sides, a natural gas model will typically cost more than electric models. Of course, these prices vary greatly depending on the specifications of the model you choose.

When you install a tankless hot water heater when you used to have tank storage water heaters, it’s a more involved process. This is called a retrofit, and your plumber has additional work to do to accommodate a tankless water heater. Piping must be relocated, natural gas lines may need to be installed if you switch between fuel types, and more.

In the end, a tankless water heater will cost more upfront than a tank model.

Operating Costs and Energy Savings

While tankless water heaters cost more upfront, many homeowners choose this technology because of the energy savings they achieve. The savings generated works to pay you back for the purchase cost over a period of time (called a payback period).

Water heaters are the third highest energy consumer in the average home. The Department of Energy estimates homeowners save approximately $100 per year on energy costs when they use a tankless water heater versus a tank model. Homes that average daily hot water use of 41 gallons or less save up to 34 % on energy bills versus storage tank water heaters.

This is not to say that storage tank water heaters cannot be energy efficient. Gas is typically more inexpensive to operate versus electricity because natural gas prices are usually lower. A high-energy efficiency tank water heater uses up to 8 % less energy to do its job versus lower energy efficiency options. The savings is achieved through better insulation and more efficient components, resulting in lower utility bills.

Overall, tankless water heaters provide a cost savings on utility bills and help you save money, as they save energy and generate lower operating costs. The cost savings make a tankless water heater worth the extra installation cost.

Equipment Life

A tank water heater has an average life expectancy ranging from 10 to 15 years. Alternatively, tankless water heaters last between 20 and 30 years. Factors such as maintenance and water hardness affect the service life of water heating equipment.

With a tank-style heater, there are some damage risks when it comes to equipment failure. Because a large volume of water is held in the storage tank, an equipment failure has the potential for flooding, which can cause quite a bit of damage to your home. According to Consumer Reports, about 90 % of new water heater installations happen in the midst of an emergency – when tank water heaters fail, they often fail spectacularly. With a tankless water heater, you’re more protected against water damage in the event of equipment failure.

Installation Restrictions

Because of their storage tank, tank-model water heaters require much more space for installation versus a tankless model. To accommodate a large water storage tank, you lose valuable square footage that may be used otherwise.

Tankless water heaters are a top choice for installation where space is restricted. Because they are smaller and may be installed on the wall, they are easily able to fit in tight spaces which is a plus in smaller homes.

Hot Water Usage

At the peak of importance for most homeowners is the availability of hot water from the water heater. Tank and tankless water heaters perform a bit differently from one another.

Tank water heaters have a reserve of hot water. This means however large your storage tank is, that’s the amount of hot water you have to use – when it runs out, you must wait. This problem is remedied with the purchase of a larger model, but that comes with more expense in installation and operating cost.

The plus side is all the hot water in the storage tank is available for use, all at once. Multiple applications are able to draw hot water at the same time – two people are able to shower, showers are able to run while the dishwasher or washing machine cycles.

Since tankless water heaters heat water on demand, they are often output challenged. This means when multiple hot water demands run at the same time, such as multiple showers, the flow rate may not produce adequate hot water to accommodate both applications. One shower may receive warmer water than the other.

In households that run more than one hot water application at a time, tank water heaters are typically recommended for comfort. In households that rarely have more than one hot water application simultaneously in use, a tankless water heater does just fine comfort-wise.

Tank Water Heater and Tankless Water Heater Installation

Every Indianapolis home needs reliable hot water – this is achieved with either style of water heater. If you need assistance to select the best fit for your home, feel free to contact us. Our plumbing pros are happy to review each type of water heater with you to help you choose.

Whichever water heater you decide is best for your home, Williams Comfort Air has the quality equipment you need. Our licensed plumbing team installs your new tank or tankless water heater to deliver reliable hot water for your Indianapolis area home. When it’s time to replace your water heater, contact us to learn more about your options and to request an estimate!

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