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Advantages and Disadvantages of Tankless Water Heaters

Advantages and Disadvantages of Tankless Water Heaters

Last updated on March 5, 2025

Do you frequently run out of hot water?

Is your traditional tank water heater not keeping up with your daily household hot water demands? Are you tired of choosing between doing your laundry, washing the dishes, or even taking a shower? 

If you answered “yes” to one or more of the above questions, then we highly recommend that you consider installing a tankless water heater, also known as an instantaneous, on-demand water heater.

Everything you need to know about the heat pump water heater.

What Is A Tankless Water Heater?

A tankless water heater is a modern system that generates hot water on demand. As the name states, it does not require a hot water storage tank. All you have to do is turn on the hot water faucet, and hot water will be constantly supplied for as long as you need it.

How Does A Tankless Water Heater Work?

A tankless water heater uses either electric or gas energy; it all depends on what you are comfortable with or what is available to you. When the hot water tap is turned on, it triggers the heating element installed in the system (whether gas or electric) to start heating water instantly as it flows through it until the tap is turned off. 

tankless water heater working diagram

The heating elements also have temperature control sensors that adjust the water to the required set temperature. This means that as long as the water and energy supply is available, you will have a continuous water supply at the temperature you desire

Advantages of a tankless water heater

Pros of tankless water heater

1. Energy Efficient

One of the main attractions of tankless water heaters is their exceptional energy efficiency. Because they only heat water on demand, they avoid the standby energy losses associated with storage tank heaters.

Studies show tankless models being 24-34% more energy efficient on average. This equates to significant energy savings over time.

2. Space-Saving Design

Tankless water heaters are far more compact than traditional tank heaters. They take up much smaller indoor and outdoor space compared to bulky tank units. Many models are designed for convenient wall-mount installations. For small living spaces, the design can be hugely beneficial.

3. Continuous Hot Water Supply

Homes with storage tank systems can often run out of hot water during high demand. Since tankless heaters provide on-demand hot water, they eliminate problems with depleted hot water availability. The unlimited supply is ideal for larger homes with extensive needs.

4. Longer Lifespan

While storage tank heaters typically last between 8 and 12 years, tankless units have lifespans of 20 years or longer. Their average working life is nearly double that of tank heaters.

With proper maintenance, some models function effectively for up to 30 years before needing replacement. The enhanced durability leads to higher long-term value.

5. Reduced Risk of Water Damage

Because tankless heaters don’t store any water internally, they carry no risk of internal corrosion and leakage.

On the contrary, for tank storage heaters, tank corrosion is common over time, often resulting in cracks and water damage. Tankless models provide greater installation flexibility and prevent costly repairs by removing this leakage risk.

6. Customizable Temperature Settings

Tankless water heaters give users precise control over output water temperature. Temperature can be easily adjusted via digital controls or smartphone apps.

This allows households to customize temperatures for specific needs – from high-temperature sanitization to kid-safe showering. Temperature customization promotes both safety and convenience.

7. Lower Operating Costs

Tankless water heaters’ exceptional energy efficiency and durability translate into lower monthly costs for homeowners.

Reduced energy consumption cuts electricity bills substantially compared to conventional models. And with a working life span of up to 30 years, replacement costs are minimized as well and long-term savings add up tremendously.

Disadvantages of a tankless water heater

cons of tankless water heater

1. Higher Initial Cost

While tankless heaters save money in the long term, their initial purchase price is significantly higher than that of traditional water heaters.

Unit prices range from $600 up to $3,500, depending on size, flow rate, and features. Installation also tends to be more labor-intensive and complex, resulting in higher total costs. The steep upfront investment deters many homeowners.

2. Limited Flow Rate

A common downside of tankless systems is constrained flow rate, particularly with basic whole-home models. While storage tanks easily support simultaneous use across multiple fixtures, tankless heaters have limited heating capacity.

Basic units may provide only 3-5 gallons per minute (GPM) – enough for just a couple taps at once. Upgraded models are needed to power whole-home demand.

3. Cold Water Sandwich Effect

Occasionally, tankless heaters exhibit a phenomenon known as the sandwich effect. This refers to a blast of cold water between cycles of hot water delivery. It’s caused by small amounts of cooler water left in internal pipes being pushed out by newly heated water.

4. Not Ideal for All Climates

Homes in extremely cold climates are often poor candidates for tankless installation. Heaters must fire at full capacity to raise near-freezing inlet water to suitable temperatures. As a result, output flow rates suffer drastically in cold weather.

Additionally, tankless heaters are vulnerable to freezing without sufficient indoor buffering from frigid outdoor air.

5. Maintenance Requirements

While tankless heaters last longer, they require more routine maintenance over their lifespan. Annual inspections and water flushing are recommended to maintain efficiency and prevent operational problems.

They will occasionally require professional servicing at added costs. If ignored, mineral buildup can accelerate wear on internal components as well.

6. Complex Installation

Switching to a tankless system often necessitates extensive modifications to existing plumbing and gas lines.

New dedicated electrical circuits may be required as well. And without a sufficient flow rate to start, units won’t ignite. All these factors complicate DIY installations. Tankless setups usually call for professional expertise – tacking on thousands more in labor expenses.

Flowing Forward: A Final Verdict on Tankless Water Heaters Advantages and Disadvantages

Tankless water heaters offer benefits like endless hot water supply, potential energy savings, compact size, and enhanced durability. These advantages of tankless water heaters may justify the steep initial investment required and occasional quirks.

But tankless models also have distinct drawbacks ranging from high costs to climate suitability issues, so there is no universal “best” option.

By weighing the pros and cons, each household can determine if transitioning from a storage tank heater to an on-demand tankless unit meets their requirements and needs. With sound information, homeowners can choose the hot water solution that fits their lifestyle and budget.

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E-Green Electrical

E-Green Electrical is a top tier energy efficiency company based in Sydney. We focus on utilising government rebates to help reduce our clients energy consumption by installing energy efficient solutions. E-Green boasts a rich heritage within the realm of energy efficiency, consistently staying up to date with cutting-edge technologies to deliver optimal results for our valued customers.

We don't just sell products and services; we also provides tips and information on how to help reduce energy consumption. We believe in using energy wisely and teaching others how to do the same. For E-Green, it’s important to share knowledge with the community. That's why we regularly write articles about saving energy, new government rebates available and increasing sustainability.

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