Tankless vs Tank Water Heaters: Which Saves You More Money?

tankless vs tank water heater

When it comes to choosing a water heater for your home, two main types dominate the market: traditional tank water heaters and modern tankless systems. Each has its advantages, but homeowners often wonder which option is more cost-effective in the long run. Let’s break down the differences and see which water heater saves you more money.

How Tank Water Heaters Work

Traditional tank water heaters store a set amount of hot water—usually 40 to 80 gallons—in an insulated tank. The water is continuously heated and maintained at the desired temperature, ready for use at any time.

Pros:

  • Lower upfront cost compared to tankless units

  • Simple installation and reliable operation

  • Hot water available immediately in multiple fixtures

Cons:

  • Higher energy bills due to standby heat loss

  • Limited hot water supply per tank

  • Shorter lifespan (typically 8–12 years)

How Tankless Water Heaters Work

Tankless water heaters, also called on-demand water heaters, heat water only as you use it. There’s no storage tank—water flows through a heat exchanger and is heated instantly.

Pros:

  • Lower energy bills because there’s no standby heat loss

  • Unlimited hot water as long as demand doesn’t exceed the unit’s capacity

  • Longer lifespan (typically 15–20 years)

Cons:

  • Higher upfront cost and installation fees

  • May require upgrades to gas line or electrical system

  • Hot water output may be limited if multiple fixtures run simultaneously

Comparing Costs

Upfront Costs

  • Tank Water Heater: Typically $500–$1,200 including installation

  • Tankless Water Heater: $1,200–$3,000 including installation

Operating Costs

  • Tankless systems are generally 20–30% more energy-efficient, which can lower utility bills over time.

  • If your household uses a lot of hot water, savings accumulate faster with tankless systems.

Maintenance and Lifespan

  • Tank heaters usually last 8–12 years, while tankless units can last 15–20 years with proper maintenance.

  • Longer lifespan and energy savings can make tankless water heaters more cost-effective over the long term.

Which Option Saves You More?

The answer depends on your household’s hot water usage, budget, and long-term plans:

  • Tank Water Heater: Ideal for lower upfront cost and households with moderate hot water needs.

  • Tankless Water Heater: Best for energy-conscious homeowners, larger families, or anyone wanting a longer-lasting system and lower operating costs over time.

When to Call Davis Plumbing & Heating, Inc.

Deciding between a tank and tankless water heater can be overwhelming. Davis Plumbing & Heating, Inc. helps Riverside County homeowners make the right choice. Our experts provide honest recommendations, professional installation, and maintenance to ensure your water heater runs efficiently for years.

📞 Call us at (951) 657-0393 to discuss which water heater is right for your home and budget today.