Selecting the right water heater impacts your utility bills and long-term savings. The choice between a tank water heater and a tankless water heater isn’t just about price—other factors influence the decision, including energy efficiency, hot water demand, available space, and installation. A standard water heater keeps a lot of heated water available, while a tankless water heater will only heat the amount you need, when you need it. Although tank models can be cheaper upfront, tankless models are often a more affordable choice for long-term water-heater efficiency. The water heater’s high efficiency saves 24% to 34% of energy in regular-use homes, resulting in consistent yearly savings on your electricity bill. In the long run, however, there are two very simple reasons why a tankless model is almost always a smart choice: over its around 20-year lifespan, the lower operating expenses and fewer replacement cycles of a tankless will generally offset its higher upfront costs.
Whether you are replacing a water heater or installing one for the first time, it’s a big investment that will affect your budget for the next 10-12 years. The decision to use a traditional tank water heater rather than a modern tankless unit comes down to one central difference: how each unit generates and stores your hot water.
The Traditional Tank Water Heater (Storage System)
The traditional water heater is a large, insulated storage tank (30–50 gallons) that maintains a constant temperature whether or not you are using it. It relies on a gas-fired water heater’s burner or an electric element that turns on and off repeatedly to compensate for “standby heat loss,” the energy required for water to cool down when no one is using it.
After its stored supply has been exhausted by simultaneous uses (such as a shower and running the dishwasher), and once the recovery time is over, you’ll have to wait before there’s more hot water.
The On-Demand Water Heater (Tankless System)
An instant water heater, also known as an on-demand or tankless heater, is a small machine that heats water whenever a hot-water tap is opened. Cold water enters the system and is heated quickly by a heavy-duty heat exchanger, activated by a gas model’s burner or electric element, providing you with hot water in seconds without adding to your energy bill. This ensures that the tankless model has no standby heat loss, making it inherently more energy efficient than a traditional storage water heater.
Tank Water Heater: Pros and Cons
Pros
- Lower Initial Cost: The cost to purchase a tank water heater is lower than that of a tankless model, making it a good option for cost-conscious homeowners. The typical price for a forty- to fifty-gallon tank is in the neighbourhood of $1,900.00 to $2,500.00, well below the average price for a tankless water heater, which often costs about $5,500.00.
- Simpler Installation: Expect a straightforward installation that generally takes only a couple of hours and saves you money when installed by a certified technician.
- Handles High Simultaneous Demand: An ample supply of hot water lets people run appliances and take showers simultaneously, without the annoyance of reduced temperatures.
- Works During Power Outages (Gas Models): You can still get hot water even when your electricity goes out, as long as your tank uses gas. It does not depend on an electric igniter; instead, it uses a small gas-fired pilot light system, not the power grid. That constitutes an excellent fallback option!
Cons
- More Ongoing Costs: The most significant downside is “standby heat loss.” To keep the water in the tank at a constant temperature, even when you’re not using it, the heater cycles on and off, wasting energy and keeping your utility bill high. This is particularly common in colder months, as the unit operates harder.
- Large Size: Most of these units will occupy a fair amount of floor space, generally in a utility closet, basement, or garage.
- Risk of Leaks and Flooding: If the tank fails, it can develop a leak or rupture, allowing water to flood your home. This risk is a part of any large water-containing vessel under pressure.
- Limited Hot Water Supply: Stored hot water can be depleted. Then, you have to wait. The tank must reheat a new batch. This may lead to a cold surprise, especially if you are the last one in the shower.
- Shorter Lifespan: The average lifespan of a tank water heater is just 10 to 15 years. Therefore, you’ll have to replace it once or twice over the twenty-year lifespan of some single-tankless units.
Tankless Water Heaters: Pros and Cons
Pros
Superior Energy Efficiency
Tankless water heaters eliminate standby heat loss, resulting in 24–34% greater energy efficiency for households using up to 41 gallons of hot water per day. For homes with higher usage, around 86 gallons daily, the efficiency improvement remains notable at 8–14%. These gains can lead to significant reductions in energy expenses.
Continuous Hot Water Supply
These systems heat water on demand, ensuring a virtually endless supply as long as usage does not exceed the unit’s flow rate. This allows extended use, such as long showers, without risking depletion of the hot water supply.
Extended Lifespan
With appropriate maintenance, tankless water heaters can operate for 20 years or more, nearly doubling the typical lifespan of conventional tank models. Manufacturers often provide longer warranty periods, reflecting confidence in the product’s durability.
Compact Design
The compact, wall-mounted construction of tankless units saves valuable floor space and allows for flexible installation. These heaters can be placed on exterior walls or in small spaces where traditional tanks would not fit.
Lower Risk of Water Damage
Without a large storage tank, the likelihood of a major leak and subsequent flooding is greatly reduced. Any leaks that do occur are typically minor and manageable.
Cons
Higher Initial Cost
The purchase price and installation costs for tankless water heaters are substantially higher than those for traditional tank models. The total expense can be 2 to 3 times higher, even before installation fees are considered.
Complex and Expensive Installation
Installation may require significant upgrades to a home’s electrical system for electric models or the addition of dedicated gas lines and specialized venting for gas models. These requirements can add considerable cost to the overall project.
Limited Flow Rate
Although tankless heaters provide continuous hot water, their capacity can be strained by simultaneous, high-demand use. Running multiple appliances at once, such as showers, dishwashers, and washing machines, may exceed the unit’s flow rate, resulting in reduced water temperature. Larger residences may require multiple units to meet demand.
Dependence on Electricity
Tankless water heaters require electrical power for operation. In the event of a power outage, these units will not function unless a backup power source is available.
Sensitivity to Water Quality
Hard water can cause mineral buildup within the heat exchanger, diminishing efficiency and potentially leading to premature failure not covered by manufacturer warranties. In areas with hard water, a water softener is often recommended to protect the unit and maintain warranty coverage.
Making the Right Water Heater Choice for Your Home
When selecting a water heater, it is important to consider your household’s hot water needs, energy-efficiency goals, and long-term financial plans. Both tank and tankless water heaters offer distinct advantages that may align differently with your needs.
Comparing Tank and Tankless Water Heaters
- Tankless Water Heaters: These systems deliver hot water on demand, minimize energy waste, and typically have a longer operational lifespan. They are often a suitable investment for households seeking efficiency and a consistent hot water supply.
- Traditional Tank Water Heaters: These units generally have lower initial costs and are easier to install. They provide a steady supply of hot water for simultaneous use, which can be beneficial for families with high peak demand.
By carefully weighing the advantages, disadvantages, and long-term financial implications of each option, you can select a water heater that best meets your comfort, efficiency, and budgetary requirements.
Reliable Hot Water Solutions
At Horizon Heating, certified technicians manage all aspects of water heater installation, repair, and maintenance with a focus on efficiency, safety, and customer satisfaction. Whether you require a traditional storage tank model or a high-efficiency tankless system, our team is prepared to recommend, install, and maintain the most appropriate solution for your home. For emergency service and expert water heater solutions in Calgary, please call (403) 274-0790.