Tank-type vs. Tankless Water Heaters

Tankless water heaters seem to be the new fad these days. Save on your energy bills! Enjoy your endless supply of hot water! This technology’s claims are attractive, but what are the disadvantages to tankless water heaters and how do they really stack up to the more traditional tank-type water heaters on today’s market? In this post, we will explore the answers to these questions.

Summary of the Technologies:Tank-type Heater

Tankless Water Heater









                          1.                                                        2.

1. Tank-type Water Heater – Tank type water heaters have been the industry standard for decades. Its components are similar to tankless water heaters, aside from the fact that it has a storage tank where it keeps a reservoir of hot water on hand. Operationally, tank type water heaters maintain a certain hot water temperature (typically 110-140 degrees farenheit) within the storage tank. As such, its burner and/or heating element is cycled on and off regularly, as needed to maintain the storage water’s hot water temperature.

2. Tankless  Water Heater – A tankless water heater is just that: tankless. Typically, its a smaller wall mounted rectangular box that houses a burner or heating element, controls, and internal piping. Operationally, the water heater only fires when there’s a need for hot water. As water flows through the heater to meet the demand, a water flow sensor activates and fires the burner or heating element.

Advantages/Disadvantages:Each technology has its respective advantages and disadvantages. Realization of the advantages depends largely upon the application of the respective technologies. It’s important to note that the advantages and disadvantages vary depending on the fuel sources as well (natural gas or electric).

1. Tank-type Water Heater


  • Low first cost (both gas & elec) – approx. $400 – $550 for a typical unit sized for a single dwelling.
  • Smaller gas/power requirements (more typical of what has been the standard for decades).
  • Easily adapted to re-circulation applications.
  • Easily adapted to solar pre-heat applications. This technology is becoming very popular in today’s society. A tank type water heater is a required element in the majority of these applications. Currently, tankless water heaters are not used in solar pre-heat applications.


  • Energy is used periodically 24/7 to keep storage tank temperature consistent.
  • Larger footprint than a tankless water heater. This becomes a significant issue when the hot water demand is high, as additional storage tanks may be required to meet that demand.
  • Limited hot water supply. You can supply only as much hot water as your storage capacity and burner/heating element recovery capability allow.

2. Tankless Water heater


  • Energy is not used until a demand is present.
  • Smaller footprint than tank-type water heaters, saves floorspace.
  • Unlimited hot water supply, as long as fuel is present (electric/gas).
  • No risk of a broken or ruptured tank, which could lead to flood damage.


  • High first cost (both gas & elec) – approx. $1000 – $1200 for a typical unit sized for a single dwelling.
  • Larger gas/power requirements (in terms of demand), which drives up installation costs and can have a significant impact on building service sizes.
  • Re-circulation applications are not easily implemented. It usually involves the addition of a small tank-type heater in the circulation loop to maintain the re-circ loop temperature when the tankless water heater is not firing. It can also be accomplished with a special pump. Either way, the assembly becomes more expensive and complex for a contractor to install.
  • Limited hot water flow, depending on the unit size. Most manufacturers offer units supplying up to about 7-9 gallons per minute. Once the demand gets above that, the practice is to add more of the same water heater in parallel. It is critical that these systems be sized properly.
  • Wastes more water than a tank-type water heater. When the demand for hot water is there, water begins to flow through the tankless water heater. The tankless must then heat up the cold water at that moment. The result is more water down the drain while you wait for the water to heat up to the desired temperature. This can be alleviated with a demand type hot water pump, but that is an added expense on top of the already increased first cost of the tankless water heater.

Tankless and Tank-type Water Heater Lime Buildup:

Lime buildup is a problem in water heaters, especially in environments with hard water. The buildup occurs over time, and usually originates at the areas where heat is applied. The result of this buildup is a loss of efficiency of the respective water heater technology, be it tankless or tank-type. I have seen some tankless water heater manufacturers claim that an advantage of their units is that they are less susceptable to lime buildup. I did not include this in advantages/disadvantages because for typical tankless water heaters, it’s just not true. Lime buildup can be avoided if the velocity of the water is great enough, but with typical tankless water heaters, the velocity is not such. PM Engineer® did an in-depth analysis of tankless water heaters vs. tank-type water heaters. Their results can be found here. In their analysis, they found that lime built up on the lines inside the tankless water heaters at a faster rate than it would in a storage tank water heater. I won’t go as far as saying that tank type water heaters are less susceptable to lime buildup, only that both technologies suffer from it. There are special water heaters that are designed to minimize lime buildup, but for the purposes of this analysis, I won’t be taking those into account.


As originally stated, tankless water heaters and tank-type water heaters each have their share of advantages and disadvantages. In my experience, a tankless water heater is not a 1:1 replacement solution for a traditional tank-type water heater, although it’s often advertised as that. There are electrical/gas service implications, as well as usage profiles that have to align well with the operation of a tankless water heater. Applications that lend themselves to tankless water heaters in terms of their savings and application are facilites that require large volume, constant flow (i.e. laundromats, car washes, some commercial restaurants), have limited floor space, or are located remotely (i.e. remote building that is used infrequently).  Tank-type water heaters have come a long way. They are better insulated than they’ve ever been, resulting in less heat and energy loss, and some of the newer technologies help alleviate some of the disadvantages of past designs. I encourage designers, builders, and facility owners to familiarize themselves with the facts about the various water heater technologies before making a decision that could cost them in the long run if the specific project parameters and application are not taken into account.

Author: Jeffrey Morgan, P.E., Mullinax Solutions Project Manager