Water Heaters: Storage vs.Tankless – Pros and Cons


Tankless water heaters have become all the rage, but believe it or not, they can also be a “source” of rage.

A few times every year, customers call us with tales of tankless woe.  The luster of the new technology they were so excited about has been tarnished by problems from day one.  And they’re so fed up, that instead of asking for a fix, they simply want to revert back to the standard storage water heater. Sadly enough, in most cases the culprit was simply an unqualified installer and/or an inferior product.

Tankless water heaters for residential or commercial use actually work very well when the proper unit is installed correctly. But when corners are cut the unit can short cycle, soot up, provide inadequate heat, or simply not heat at all. If you are ready to go “tankless”, our very first recommendation is to have a licensed Plumber or HVAC technician perform the installation.

The advantages of going tankless are often discussed… but could there be a downside upgrading to this newer technology? Hopefully this penny’s worth of information will make you a pound wiser.

PROS: The most obvious benefits to a tankless water heater are energy efficiency and compactness. In addition:

  • Most good quality residential units will have a 15-year heat exchanger warranty.
  • Replacement is usually less labor intensive than the initial installation, so replacement cost becomes much more affordable.
  • Most brands are designed to heat only when water is running through the unit, saving energy and money.
  • There is no longer a tank limiting the quantity of hot water, and short showers become a thing of the past.
  • Several units can be plumbed together to increase the amount of hot water required (typically beneficial for commercial installations where high volume of hot water is necessary).

CONS:  In order to be an “informed” buyer, here are a few of the realities of tankless water heaters that should be considered before making a purchase:

  • Tankless water heaters require power to operate the controls and gas valve.
  • They usually cannot use the same vent pipe or gas pipe as the conventional water heater and will typically need to be upgraded.
  • Some brands can create a “cold sandwich” effect by the way they operate when used in short spurts.
  • No storage of hot water is available in case of a power or gas outage.
  • Since water is heated as it passes through the unit, there are limitations to how many faucets can be in operation at once.

Most companies will give free estimates to install a tankless water heater. Since a tankless water heater is typically a more significant job than simply replacing a conventional storage water heater with the identical tank, it is best to plan this installation instead of waiting for your current water heater to leak.

Planning your tankless water heater purchase will allow time for thorough and proper installation, and help you to take advantage of all the options. It’s a much better scenario than upgrading while you’re trying to manage the emergency of getting your hot water back in service.

When comparing products and installers, be wary of the cheapest bids. This is one installation that you don’t want to cut corners on. It could ultimately cost you more money in repairs, shorten the lifetime of the unit, and/or keep the water heater from living up to its promises.

Tankless water heaters are used all over the world and can be an efficient and comfortable source of hot water. Are they worth it? We’ll leave that for you to decide.

 Bruce Davis Jr.

General Manager

Day & Nite Plumbing & Heating, Inc.

Bruce is a second generation plumber and HVAC technician. He earned his Commercial Plumbing License and later became N.A.T.E. Certified and E.P.A. Refrigerant Certified for HVAC service and repair for commercial and residential HVAC appliances. Bruce has years of experience as an HVAC Technician, Boiler Technician, and Plumber. He is now General Manager for the company he has been with his entire career and oversees the Plumbing, Heating, and Air Conditioning business for Day & Nite Plumbing & Heating, Inc.



20 Responses to “Water Heaters: Storage vs.Tankless – Pros and Cons”

  1. I am still confused whether to upgrade to a tankless water heater or just stick to my conventional heater. It still works but is quite old now, but it’s very bulky and I live in a really small condo. Thank you for these information but I guess I may have to ask some friends who have really used tankless systems. I want to know their experience so I won’t regret such investment if in case I would have to buy one.

    • Thank you Lydia. You can always call us at 1-800-972-7000 if you’d like to discuss the pros vs. cons in greater detail.

  2. This is a really helpful article. I like the information here and made me decide to change my conventional water heater at home to a tankless water heater. Reading from this article is really helpful indeed. I really appreciate it! Thanks!

  3. Way cool! If you’re like me, you can never know too much about one single topic. Oh, I was reading this: http://jenniferhastings.yolasite.com/bathroom.php and the article talks a lot about Rinnai water heaters. What do you think about Rinnai?

    • Rinnai is a good brand. We’ve been installing them for years. Another water heater we’ve had good luck with is Eternal.

  4. In the long run tankless water heaters are probably the better option, but you’re right that they’re not perfect (just like any product). Although they are more efficient than tank-type water heaters, and provide a continuous flow of hot water, you’ll find it takes longer to actually get hot water to the faucet since their isn’t any stored hot water. They are also a more sophisticated device, so any repairs will likely have to be done by a service professional. They are also significantly more expensive than tank-type water heaters, although over time you should recoup that cost in energy savings.

  5. 9 Jesse

    Any thoughts on Rheem? Online reviews are good, but are based on intial experiences.

    @ aprox 8 cents per kWh for propane (BTU equivalence) we’re looking at an outdoor mounted propane tankless for our 900ft^2 / 1.5 bath home.

    A factor is the space savings: outdoor mounted (big crawl space) tankless instantly doubles pantry space.

    Thanks for the balanced article!

  6. 11 Annette

    Read online that tankless water heaters get mineral buildup which requires regular maintenance by flushing the system with a “vinegar wash.” This requires a pump which, practically, can only be done by a plumber. What is your take on this. Many sites don’t mention this issue.

    • Annette, It IS true that Tankless Water Heaters need regular maintenance, which can include flushing them to get rid of mineral buildup… All water heaters may need that. Mineral buildup happens/can happen ANYTIME a piece of equipment like a water heater or boiler heats water.

      Mineral buildup will vary GREATLY based on several things…
      • How ‘hard’ is the water?
      • What other issues may the water have… ie. PH etc?
      • How much water is used daily?
      • What is the velocity of the water going thru the unit?

      Most City water in the Western Washington area is VERY ‘soft’, in other words, it has a VERY small mineral content in it per gallon. Therefore, if the equipment is on City Water, flushing may not be necessary at all or very infrequently.

      On the other hand, at my home my water had 10-grains of hardness per gallon in it. Therefore when it is heated, it will tend to leave A LOT of ‘hardness’ or mineral behind in the equipment. I need to service my unit annually.

      To know if your equipment needs it, you need to know your water & if you don’t , it needs to be tested for hardness & the other aesthetic qualities we test for in domestic potable water.

  7. Admiring the persistence you put into your blog and in depth
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    isn’t the same out of date rehashed material. Excellent read!
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  8. Hello there! This blog post couldn’t be written any better!
    Reading through this article reminds me of my
    previous roommate! He continually kept preaching about this.
    I am going to forward this information to him. Pretty sure he’ll
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  9. 17 corneliani

    I was attracted to your blog by your title: “pros and cons”. I feel like, along with most other articles I read, we’re being sold on tankless for anything but technical reasons. As a former builder now considering this technology for our own new home I’m bothered a bit that the industry is not 100% honest with some of the “myths” of tankless. Correct me if I’m wrong, as I truly want to understand this and not just be negative for no reason but, for example, the idea of “on-demand” is not truly correct (your pipe length and installation doesn’t change and water still needs to travel that length… and if anything Tankless units ADD a few more seconds of delay while trying to determine income/outgoing temps). Likewise “endless” is misleading as the unit can only supply as much hot water as it can heat… and if the outgoing water isn’t hot enough it will reduce the flow. So a 9.8 gpm unit can only supply 3 faucets simultaneously, and even that depends on incoming water temps. And lastly, most households use anywhere from 50 to 75 gallons of hot water a day. A regular tank can easily hold that amount without worrying about refresh rate.. after which the priority falls on getting a very well insulated tank that keeps that water as hot as possible so as not to continuously reheat. I would also add that location is very very important.. placing it in the garage on the outside wall is going to make it tough on that tank to keep water hot.

    I guess I would like to see tankless units not sold as an all-encompassing solution. It doesn’t seem to be. If you have a big family or use over 50gal of hot water/day, it doesn’t make sense. On the other hand if you’re a small user of hot water, then totally. And even then, considering the cost difference, you’ll still need 10+ years to break even.

    • Thank you for your comments. I forwarded your concerns to our President, Bruce Davis Sr. Here is his reply:
      • Lots of People/Companies are pushing Tankless heaters for ALL kinds of reasons, & you are asking the right kind of questions & making the right kind of observations.
      • A TRUE ‘tankless’ water heater DOES have ‘lag time’ for providing hot water, because #1-There is no hot water till someone turns on a hot faucet & then the Unit fires & makes the hot water, and #2-The hot water STILL must travel to the faucet that was turned on to deliver the newly made hot water.
      • Now, several companies (like ‘Eternal’) are making what amounts to ‘Hybrid’ Tankless heaters…which have a 1 to 2 gallon small tank that keeps its temperature up to ‘hot water’ levels, so that the ‘cold sandwiches’ or ‘lags’ are greatly reduced, if not eliminated… and, on these Hybrid Heaters, it’s standard to be able to hook in a hot return ‘loop’ line, so that all there is NO waiting for hot water due to distance; even LONG distances or outside installs, (the hot return line simply needs to be well insulated & on a sensor or timer).
      • Math is Math, but GPM in real life use is NOT as it seems on paper. True, ALL ‘Tankless’ units will only provide a certain amount of hot water before they begin to deliver water cooler than their ‘target temperature’…. But in practice, most families never experience this. My wife & I have NEVER experienced it in over a year now on a Hybrid Tankless heater. Some families WILL however, and will need to adjust their habits a little to avoid it…which is what MOST of the world does in regard to hot water use & demand.
      • Tankless Heaters/Hybrid Tankless Heaters are an excellent choice for most families. They DO provide ‘endless’ hot water for things like multiple Teen-agers showering and/or big soaking tubs, they are the MOST efficient water heating equipment on the Planet, and their S.S. heat exchangers will last at least TWICE as long as a storage tank. And…once Builders and the Construction Industry stops insisting on providing the cheapest solutions with storage tank water heaters and start installing ‘tankless’ as standard (like MOST of the Planet), then home owners won’t have to shell out the ‘big bucks’ to get one installed, due to the need for changing the basic plumbing set-up.

  10. 19 Dan

    my plumber was talking about installing a tankless in my coat closet. is it safe to do this I am looking at a rinnai with a vertical vent set up.

    • Dan, thank you for your comment. Here’s a reply from our Company President Bruce Davis Sr.
      Yes, it CAN be safe, but ONLY IF that unit gets its combustion air (the air that the flame depends on to fire) from the outside. Heaters that get their combustion air from outside the house/building are historically called “Direct Vent” heaters…but the key point is WHERE the heater gets its air from to make a flame. It is both against Code & Common Sense to put ANY kind of heater (water heater, furnace, boiler etc) in a sleeping area, that draws its combustion air from that room; because ANY issues at all could cause Carbon Monoxide to dump into the room & be fatal. Units that draw ‘outside air’ for their combustion do so through one of several types of systems;
      • A single pipe, ‘concentric ‘ piping system, (a pipe within a pipe system, 1 brings in combustion air, the other acting as the chimney, venting to the outside).
      • A dual 2-pipe system, (again one pipe brings in combustion air, the other is the chimney, venting to the outside…but they are actually 2, separate pipes).
      With both of these systems, it’s important that the terminus be done properly, and not too close to anything like a window or door.
      Installation of direct vent pipes is different for EVERY jurisdiction and must meet the requirements of Local Codes…
      As always never never NEVER install ANY appliance that uses a fossil fuel for combustion without at least 2 Carbon Monoxide Detectors; 1 Low Level Unit in the primary sleeping area, and 1 Standard CO Alarm…


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