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Tankless Water Heaters: Advantages And Disadvantages

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A water heater can is an important home comfort investment – a piece of equipment you will rely on daily for more than a decade. That’s why it’s so important to make a choice you can live with when the time comes to replace your water heater.

One of the most important considerations you’ll have to make is whether you should stick with a tried and true storage-type water heater or upgrade to tankless model. We’ve put together this short primer to help you understand the pros and cons of each type of water heater.

Tankless water heater basics

A tankless water heater works by running water through a high-powered heat exchanger to instantly heat the water you need – and only the water you need (they are often called “on-demand” water heaters, for obvious reasons). They’re usually powered by gas (propane or natural gas), electricity, or heating oil.

Tankless water heater pros and cons


  • Efficiency improvements – According to the U.S. Department of Energy, homeowners who use 41 gallons of hot water or less can expect to see between 24 and 34 percent efficiency improvement when they upgrade to a tankless water heater from a storage model; that number typically goes up as you use more water.
  • Improved equipment life – Tankless water heaters typically last 20 to 30 years – about twice as long as a storage tank water heater.
  • More flexible placement options – On-demand water heaters are small and may be installed in “tight quarters,” such as a closet or small basement space. They can also be wall hung.
  • Virtually unlimited hot water – A tankless water heater will deliver two or three gallons of hot water (depending on its flow rate) per minute for as long as water continues to flow into your home.


  • Up-front costs – A typical tankless water heater can costs three to four times more than a storage-type water heater; you’ll also pay more to install it, especially if you’re replacing a storage water heater.
  • Flow rate challenges – If you plan to simultaneously take showers in different bathrooms, or run a hot load of laundry while also taking a bath, your water heater could run out of steam (literally!) as it tries to keep up. Be sure your tankless water heater is sized to meet the water heating load of your home during times of peak usage – contact us to learn more.

Conventional (storage-type) water heater basics

When most people think of a water heater, this is the type of model they think of. Their components include an insulated tank that typically holds anywhere from 30 to 50 gallons of water, and a burner housed within it that heats and reheats water to have it ready for use. Storage-tank water heaters use natural gas or electricity for their fuel. Gas water heaters use almost 50 percent less energy to operate than electric models, but cost more up front than the latter.

Storage water heater pros and cons


  • Lower up front costs – Storage tank water heaters can cost as little as $500 to $800 to purchase; installation costs are also significantly lower than those of tankless models.
  • Simpler maintenance – The simplicity of storage water heaters makes for easy, low-cost repairs when needed.


  • Higher utility bills – Water in your water heater’s storage tank is constantly losing heat to its environment (we call this standing loss) – which means that your water heater has to work throughout the day to keep hot water ready for use whenever you turn on your tap, shower, or appliance. That costs you energy – and money.
  • Large footprint – If you have space restrictions in your home or basement, you could find it difficult to place a 40- or 50-gallon storage tank.
  • Limited hot water – An average storage tank water heater can only support about three showers in a row. If you’re person #4 and you like a hot shower, you’ll need to wait until your water heater can heat up a new batch of hot water.
  • Shorter lifespan – Storage tank types have a shorter useful life (about ½ the life of on-demand water heaters) – typically 10 to 15 years.


If you can bite the bullet and pay the additional up-front costs for a tankless water heater, it will pay for itself in the long run in the form of lower bills and a longer useful life – especially if you have a larger home and family. On the other hand, a storage-type water heater might make more sense if money is tight, or if you only use a limited amount of hot water (if you’re single or a couple with no children, for example).

Need help choosing a water heater for your Sullivan County home? The pros at Black Bear can help. Contact us today for a FREE, no obligation estimate on a tankless or conventional water heater.