Tank vs Tankless Water Heater: Which One Should You Get?

Your water heater is getting old, or a plumber just handed you two quotes and one is way higher than the other. Now you have to pick between a tank and a tankless water heater, and everyone you ask tells you something different.

Is a Tank or Tankless Water Heater Better?

Here are some good rules of thumb if you're considering upgrading:

• If your home is all electric: get a tank.
• If your tank is in the attic: get a gas tankless. It takes 50 gallons of water off your ceiling.
• If you'll stay 10 years or more: get a gas tankless.
• If you'll sell soon, or money is tight: get a gas or electric tank - whichever your house runs on.

We'll outline why in the article below, but if you want a quick way to figure it out for yourself we wrote a quiz to help you out. Take our quick quiz.

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How Tank and Tankless Water Heaters Work

The reasons for most of the recommendations above come down to how each kind of water heater works.

What Is a Tank Water Heater?

A tank water heater is the most common. It has a 50-gallon tank and a gas heating unit that slowly brings all that water up to temperature. It then keeps it at that temp day or night. It's a very simple device. The one downside is that it can run out of hot water, and if it's in the attic, that's 50 gallons waiting to leak over your head.

What Is a Tankless Water Heater?

A tankless water heater heats water the moment you turn on the tap. To do that, it needs to use a huge amount of fuel to heat a small amount of water from cold to the set temperature. Tankless water heaters use 5x as much gas, but for a much shorter period of time. That's why tankless units never run out of hot water. It's also why they often need a bigger gas line, and it's why you should avoid electric ones.

The Problem With Electric Tankless Water Heaters

Electricity can't heat water as fast as gas, so an electric tankless has to pull a huge amount of power, about 120 to 150 amps, just to keep up with a shower or two. Most homes have a 200-amp electric panel for the whole house, so many need a new panel just to run one, and that can cost more than the heater.

Tankless vs. Tank Water Heater Pros and Cons

Here's how the two compare, row by row.

TABLE: Tank vs. tankless water heater pros and cons

Conventional tank water heaters are cheaper. Tankless water heaters have unlimited hot water, last longer and take up less space.

So why not always get a tankless? Two reasons: money and simplicity. Let's start with money.

Tankless Water Heater Cost vs. Tank: What DFW Homeowners Pay

Here's what our customers in Dallas–Fort Worth pay to have one installed. That price covers the heater, parts, labor, the city permit and hauling off the old one.

TABLE: Installed water heater prices in DFW

Why the gap? The tankless heater itself costs more, and the install takes more work. Some homes also need upgrades before a tankless can run:

• A bigger gas line. A tankless burns a lot of gas at once, so the old line is often too small to feed it.
• A new vent pipe. A vent pipe carries the exhaust outside. A tankless needs a different kind than a tank, so the old one usually can't be reused.

A tank is also cheaper to fix. Most tank repairs are simple parts that any plumber carries.

So does a tankless ever make that money back?

Is a Tankless Water Heater Worth It?

Yes, if you stay in your home about 10 years. A tankless pays you back in two ways: a lower gas bill and buying one heater instead of two. If your tank is in the attic, there's a third.

• A lower gas bill. A tank keeps 50 gallons hot all day, even while you sleep or you're at work. A tankless only heats the water you use. ENERGY STAR says that saves a family of four about $95 a year. The Department of Energy says a tankless uses 24% to 34% less energy in homes that use 41 gallons of hot water a day or less.
• One heater instead of two. Tanks last 10 to 15 years in most of the country, but our hard water in DFW wears them out in 9 to 12. A tankless lasts 20 years or more, so over 20 years you'd buy two tanks or one tankless.
• A possible insurance discount, if your tank is in the attic. Some insurers reward upgrades that prevent water damage. Orion180 takes up to 10% off for a water shut-off valve, so ask your agent if a tankless counts too.

Here's how it adds up over 20 years:

TABLE: 20-year cost of a gas tank vs. a gas tankless

Gas costs use the EnergyGuide label for a 48-gallon gas tank at the national gas price, about $330 a year, and ENERGY STAR's estimate that a gas tankless saves about $95 a year.

Over 20 years, a tankless costs about $1,600 less than two tanks, but it only pulls ahead once the first tank wears out, around year 10.

A tankless pays off faster if:

• You'll stay 10 years or more.
• Your tank is in the attic, where a leak does the most damage.
• Your gas line is already big enough.

A tank is the better buy if:

• You'll sell in the next few years.
• Your home needs a bigger gas line for a tankless.
• Your home uses very little hot water.

Tank Water Heaters Are Simpler to Own

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Money isn't the only reason to keep a tank. A tank has fewer parts, so less can go wrong, and when something does break, it's quick to fix.

• Fewer parts to break. A gas tank has a burner, a thermostat and a gas valve, and that's about it. A tankless has a computer board, a fan and a handful of sensors. More parts means more things that can fail.
• Faster fix. Any plumber can work on a tank, and the parts are easy to find. When one dies, we can usually put in a new one the same day.
• No changes to your house. A new tank goes right where the old one was. It usually hooks up to the same gas line, vent and pipes.
• More forgiving. If you skip a flush, a tank keeps working. It just won't last as long. A tankless needs a yearly descale, an acidic rinse that clears out mineral crust. Skip it, and our hard water can shut it down.

Already own a tankless? Here's the easy yearly maintenance that keeps it running.

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So far we've compared gas heaters. If your home is all electric, the choice is even easier.

Electric Tank vs. Tankless Water Heater: An Electric Tank Is a Safe Bet

Buying or building an all-electric home? Good news: an electric tank is completely normal, and most reputable brands work great. It's the cheapest option to buy and put in, and it lasts just as long as a gas tank. The one thing to skip is a whole-house electric tankless, for the reasons we covered above.

A few ways to get more out of an electric home:

• Check for gas. Most DFW homes have gas, even when the water heater is electric. If yours has a gas meter, or you're building and gas is on the street, a line to the water heater opens up gas options. It's much cheaper to run during construction.
• Want a lower electric bill? A heat pump water heater is an electric tank with a small heat pump on top that pulls heat from the air into the water. It costs more up front but uses less than half the power.
• One bathroom takes forever to get hot? A small electric tankless under that sink fixes it. It's not for the whole house.

But if you're going tankless, we don't recommend an electric unit.

Want the full math? Here's why we think whole-house electric tankless water heaters aren't worth the cost.

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Whichever one you pick, the next question is size.

Will a Tank or Tankless Keep Up With Your Family?

Both can. You just need the right size.

With a tank, a 50-gallon one covers most families of four. If you run out a lot, going bigger gets pricey. A 75-gallon tank costs close to a tankless, won't last any longer and usually only fits in a garage. Most homes that need more hot water end up with two 50-gallon tanks hooked together, for about the same price. At that point, it's time to look at a tankless.

With a tankless, count how many showers you run at the same time. A shower uses about 2 GPM. The biggest gas tankless made for homes makes about 6 GPM in winter, enough for three showers. A smaller one makes about 4 GPM, enough for two. Both make less in winter, because the water coming into your house is colder and takes more work to heat.

GPM means gallons per minute: how much hot water a tankless can make each minute. It's the number to look for when looking at tankless units.

Got a big soaking tub? Tell us. It can empty a small tank, and it needs a big tankless to fill it fast.

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Tank vs. Tankless Water Heater in North Texas: Attics, Freezes and Hard Water

Three things about North Texas homes can change your answer.

Attics. Lots of homes here have the water heater in the attic. That's 50 gallons of water over your head. When an old tank bursts, it soaks the ceiling, the walls and the floor below. A pan and a drain line help catch small leaks, but they can't hold a burst tank. A tankless holds almost no water, and it can go on an outside wall. If your tank is up there, that's the best reason to switch, and some insurers may give you a discount for it.

Freezes. Remember February 2021? When the power went out, a standard gas tank kept making hot water. A tankless can't, because it needs power to run. A tankless on an outside wall also uses power to keep itself from freezing, so if the power goes out during a freeze, it needs to be drained. We'll show you how when we put it in.

Hard water. Our water is full of minerals. Over time, they build up into scale, a rock-like crust, inside every water heater. It's a big reason tanks here wear out in 9 to 12 years. On a tankless, skipping the yearly descale can shut it down. A water softener helps both kinds last longer.

Switching From a Tank to Tankless? Decide Before Your Tank Fails

Switching to a tankless can take extra work, like a bigger gas line or a new vent. That's easier to plan while your hot water still works. If your tank fails and you need hot water fast, a new tank is usually the quickest fix.

Your tank is close to done if:

• It's 9 years old or more
• There's rust on the tank
• There's water on the floor under it
• It pops or bangs
• Your water goes warm, then cold

Two other good times to decide: during a remodel, or right after you buy a house and the inspector flags it.

Planning the switch? Here's what going from a tank to a tankless involves.

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Got Two Quotes? Here's How to Compare Them

A low price can leave things out. Before you say yes, check that the quote has these:

• Tank: a drain pan, an expansion tank if your home needs one, a permit and hauling off the old one. An expansion tank is a small tank that soaks up the extra pressure when water heats up.
• Tankless: a bigger gas line if needed, a new vent pipe, a permit and two service valves for the yearly descale.

If something is missing, ask why. If the price is way off from ours above, ask why.

Get a Straight Answer for Your House

Call us. We'll come look at your home and tell you which one makes sense, even if it's the cheaper one. Not ready to call? Take the quiz.

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