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Tank vs. Tankless: Hot Water Heater Showdown

What’s the difference between a tank (or “storage”) water heater and a tankless (or “on-demand”) water heater? Which one is right for your home? Here’s the difference between tank and tankless versions and how to choose which one is best for you.
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Purchasing new appliances for your home is a big investment, so make sure that you have all the information before committing. If you’re looking to replace your hot water heater soon, you may have run across models that are “tankless” or “instantaneous/on-demand” alongside the conventional “storage”/”tank” water heaters. Here’s what you need to know about these two water heater options before you make any decisions.

How They Work: Tank and Tankless

Understanding how each type of water heater works is critical to making an informed decision for your next purchase.


Storage/tank water heaters work by pulling cold water through a pipe then heating it up before storing that hot water in a big tank. When a faucet or appliance in the house calls for hot water, the tank opens up an outgoing pipe and lets the already-heated water flow out. The storage water heater will always replenish the supply of hot water in the tank, but you have to wait for more water to become available if you use it all at once.


A tankless/on-demand water heater, on the other hand, does not have hot water ready and available when needed but instead heats the water at the moment it’s being used. When a hot water faucet is turned on in the home, the tankless water heater pulls cold water into the unit, heats it, then immediately dispenses it out through an exit pipe. When the hot water faucet is turned off in the home, the tankless water heater stops its work.

Energy Efficiency

One big drawback to traditional storage water heaters is the passive loss of energy. Since a large quantity of water is being heated and then stored for an indefinite period of time, the water will lose some of its heat as time goes on - the energy lost from this cooling is inefficient, both in terms of money and resource use. On the other hand, tankless water heaters only heat water as it’s needed, so they’re more energy and resource-efficient. Because of this efficiency, many local governments and/or utility companies offer incentives for tankless water heater purchases. The Government of Canada states that Tankless on-demand water heaters can be 30% more energy-efficient than conventional storage tank water heaters. However, some gas-fired tankless water heaters have a pilot light that’s continuously ignited, so some energy is being used even when the unit isn’t actively heating water. Others can have an intermittent ignition device that only turns on when needed, so your energy efficiency can be affected by the particular model and energy source that you have.


Household Usage

Deciding whether to get a tankless or storage option for your water heater depends somewhat on the amount of hot water your household uses daily. Because tankless options heat the water on demand, a household that uses a large volume of hot water at one time could easily run low. If you’re used to running the washing machine while someone hops in the shower, then a single tankless water heater probably won’t keep up with your needs. Since tank/storage options come in various sizes, on the other hand, you can choose a large capacity model that will have enough hot water ready and waiting for your family’s needs at any given time.

Tankless water heaters generally heat about 2-5 gallons per minute (depending on energy source and temperature of incoming cold water).

Upfront vs. Long-Term Costs

A tankless water heater costs more upfront than a storage unit, so if your current funds are limited, a traditional model might be the way to go. Similarly, if you determine that you’d need multiple tankless units to meet your household demand, the difference in cost will grow (even considering the need to buy a large capacity storage model). However, the energy savings from a tankless version may be noticeable depending on your family’s usage and energy costs in the area. Both tank and tankless options can use natural gas or electricity as their energy source, so depending on the price and availability of each in your area, one may be more efficient than the other for your needs.

Even though the upfront cost of a tankless water heater is more, the long-term costs may not be. Typically, a standard storage unit needs to be replaced every 10-15 years, but tankless units often make it to 20 years without any issues. Replacing parts on a tankless unit is also easier than on storage models, so regular maintenance is simpler with a tankless version.

Before you replace your water heater, ensure that you assess your household water usage, available energy sources, and current versus long-term budgetary needs. Either way, getting quotes from several professionals in your area will help your family decide which model is right for you!


This story was made possible by our Community Partners Program. Thank you NWR Painting Inc. for helping to expand local news coverage in the Bow Valley. Learn more.

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