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Pros and Cons of Tankless Water Heaters

Considering getting a tankless water heater? Learn about the pros and cons of tankless water heaters before you make a decision!

tank vs tankless water heaters

When we bought our house, we knew the water heater was on its last legs. When it finally kicks the bucket, we plan to replace it with a fancy new tankless water heater.

The dream of endless hot showers while saving both money and space is too alluring to pass up!

But it pays to do your research to see if an on-demand system is right for your home. Luckily, I've already weighed the pros and cons of tankless water heaters for you!

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How Does a Tankless Water Heater Work?

A tankless water heater is basically a heat exchanger connected to your home's plumbing system. When someone open up a hot water faucet, it turns on the heating unit. This unit may be gas or electric, but they perform the same task.

Water runs through the heat exchanger which heats the water to the desired temperature before delivering it to the faucet. There is almost no lag time before the water is hot, just like magic! When the faucet is closed, the heater shuts off.

infographic of how a tankless hot water heater works

Pros of a Tankless Water Heater

Hot water won't run out

Imagine long, hot showers without your significant other banging on the door to remind you not to use all the hot water! Or filling up a bathtub without a layer of cold water on top.

You can also shower while the dishwasher or washing machine are running without it turning to ice when the rinse cycle starts!

woman yelling because shower water turned cold

Energy efficiency

With no holding tank full of water kept at a certain temperature at all times, it wastes less energy. A tankless unit only operates when it's called upon.

Saves space

We would have loved a tankless water heater in our old condo, where a huge tank took up half a closet that could have been used for more storage! The entire on-demand system is mounted on the wall to save you tons of floor space.

Less chance of water damage

Another consideration in favor of going tankless is that there is less chance of water damage if something should happen to the unit.

Cons of a Tankless Water Heater

Although tankless water heaters appear to be the perfect answer for supplying your home with hot water, there are some downsides to them as well.


Even though prices are dropping, tankless units can still be expensive. They can run anywhere between $500 to over $1,000 depending on heating capacity.


If you live in a cold climate, you'll need a more powerful heating element to bring the water in your pipes up to your desired temperature. More power = more expensive. To get an idea of the typical ground temperature of your area, check this map.

The heating capacity of your tankless water heater depends on the ground temperature of your pipes.
Photo courtesy of EcoSmart


If you are converting to a tankless water heater, the installation can add considerably to the cost since it may require rerouting gas or electrical connections.

Finding a professional to install the system can be tricky. Check with your local plumbing company to see if they have someone who is familiar with the process.

Building codes

You should also check building codes in your area before purchasing a tankless unit since many areas require mounting them on external walls only, limiting where you do an installation and complicating the requirements for gas or electrical connections.

I hope this clarifies some of the pros and cons of tankless water heaters for you. Now you can feel confident in your decision about whether this type of system works for you and your home!


Thursday 2nd of March 2017

Your timing is perfect!!!! We are about to take the plunge and do so appreciate all this information! Thank you!!!

Kristi Cathey

Wednesday 1st of March 2017

It's true that everything has two sides. Although it costs a little bit much, it has many advantages and I'm fine with the cost. Anyway, you did a great research. Thanks!


Tuesday 28th of February 2017

we've got one in our rental and quite like it actually!


Monday 27th of February 2017

Since visiting Europe a couple of times, I have so wanted a tankless water heater. Well, maybe our next home we will have one installed. This is so helpful!


Sunday 26th of February 2017

We installed a tankless propane hot water heater 8 years ago. We live in one of the areas the above map shows a 42F ground temperature. I would never go back to a tank. It's never missed a beat.


Sunday 26th of February 2017

Part of me hopes our tank dies soon so we can put in a tankless! Glad to hear yours is going strong after 8 years!

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