Tankless Vs Hybrid Water Heaters (What You Should Know)

When it comes to getting hot water, not all water heaters are created equal. The next generation of water heaters offers homeowners looking for efficient, cost-effective solutions a choice between tankless and hybrid water heaters. 

The efficiency of hybrid water heaters is unparalleled, giving them a slight edge over tankless water heaters and certainly ranking them above traditional storage tank water heaters. But you may also want to consider how much space you have and whether you want instant hot water or the most efficient system before deciding on a new water heater. Ultimately, you can’t go wrong with either hybrid or tankless. 

In this article, I’ll talk about everything you need to know about hybrid and tankless water heaters and the advantages and disadvantages of both. 

Traditional Storage Tank Water Heaters

Storage tank water heaters are the traditional older models that probably come to mind when you think about water heaters. 

They work by storing large amounts of water in a 20-50 gallon tank and keeping it heated until it’s ready to use. When you hop in the shower or turn on the sink to wash the dishes, that preheated water is what comes out as the hot water.

A storage tank water heater heats water slowly over a long period of time. This allows them to provide consistent temperatures throughout the day. But because they take a while to heat the water, they are less efficient than other options that are now on the market.

Plus, the storage capacity of traditional tanks can be limited by the size of your house, and if you need more hot water than what the tank can hold, you’ll have to wait until the tank heats up again before using it.

What Is a Tankless Water Heater?

So if you are looking to avoid some of those limitations that a traditional storage-tank water heater poses, you might consider going tankless!

Tankless water heaters offer instantly hot water on demand. They can be fueled by either gas or electricity but are ultimately operated by an electric control panel to operate, so sufficient electricity is needed to run them. 

Tankless Water Heater

A tankless water heater heats up water as needed rather than storing the heated water in a large tank. It draws cold water out of the faucet into the system, heats it up, and sends it back out.

They may be a bit more expensive than traditional models, but the added benefits they offer make them much more appealing to homeowners.

What Is a Hybrid Water Heater?

Hybrid water heaters, also known as heat pump water heaters, combine the best features of both types of water heating technology. 

A hybrid water heater has a storage tank like a traditional water heater, but it uses a heat pump to heat the water. The heat pump takes in hot air from the surrounding environment and converts it into hot water. 

Hybrid Water Heater

Since it uses heat from its surroundings instead of generating its own heat, the hybrid is the most energy-efficient type of water heater on the market.

A hybrid water heater is a great option for those looking for high efficiency, low maintenance, and a long lifespan.

Comparison of Tankless Water Heaters vs Hybrids

So which one is better? A couple of things you may want to consider before choosing which type of water heater is better for you are:

  • How much hot water do you need? 
  • Does your household like to take multiple showers at once?
  • How much space do you have?
  • Do you have enough electricity running to your house?

I’ll go over these in a bit more detail below. 

Everything You Need To Know About Hybrid Water Heaters

Let’s take a look at the pros and cons of hybrid water heaters. Some of the pros include more energy efficiency, they are environmentally friendly, and some of the cons are that they take up much more space, they may not operate as well in colder climates, and the upfront costs can be expensive. 

Hybrid water heater performance 

As I mentioned above, hybrid water heaters are extremely efficient. But do they live up to the hype when it comes to performance? The answer is yes.

Hybrids can supply more gallons of hot water per hour than conventional electric models and can produce quite a bit more at any given time as well. 

How Hybrid Water Heater Works

Hybrids also last quite a bit longer than traditional water heaters, with an average lifespan of around 15 years.

One thing to note is that since hybrids use the air around them to heat water, they operate best in mild climates or anything above 40 degrees Fahrenheit. However, some newer models are made to work in colder climates as well.

Hybrid water heater energy efficiency 

Hybrids are without a doubt the most efficient water heaters on the market today.

To give you an idea, according to Energy Star, a traditional water heater operates at about 65-95% efficiency, which, to put it simply, means that for every $1 you spend on heating water, you get 94 cents worth of hot water. In comparison, hybrid water heaters operate at anywhere from 250-370% efficiency.

Since they absorb heat from the air around them, they don’t have to create their own heat, which means less energy is used! And since they also don’t emit greenhouse gases like conventional heat pumps do, they’re environmentally friendly too.

Operating costs for hybrid heaters

Since hybrid water heaters are so efficient, the cost to operate them is extremely low – especially when operating in mild climates. 

According to Energy Star, the average annual cost of operating a hybrid water heater is $300. That is pretty low in comparison to the $600 per year it costs to run a conventional storage-tank water heater. 

Hybrid heater installation costs

The initial cost and installation of a hybrid water heater might leave you with a bit of sticker shock. They can cost between $1200 and $2,500 to buy and require a custom installation.

Installing a heat pump isn’t easy to do by yourself and will require professional help. Water lines may need to be moved, condensation lines may need to be added, and if you are switching from a gas heater to a hybrid, you’ll need an electrician to run a 220-volt circuit to the unit. This could take several days to set up and costs, on average, $1200-$3500.

It’s also worth noting that hybrid water heaters are not small. They are even bigger than traditional storage tank water heaters and require a minimum amount of buffer space surrounding them in order to function properly. So if you don’t have a lot of space to work with, maybe it’s not the best option.

So is it worth the initial cost? Well, a study conducted by the National Renewable Energy Laboratory found that hybrid water heater owners could see a return on investment within four to seven years, depending on how often he uses hot water. 

So, in my opinion, the longevity of the unit combined with the operational savings that it offers, makes it well worth the investment.

Tip: Energy rebates and incentives are available to help you offset the cost of purchasing a hybrid system. The federal government will give you a $300 tax credit if you install a hybrid water heater in your house, and some states will give you even more.

Dual activation on hybrid water heaters

Did I mention that hybrids may be the best of both worlds? They can be activated by either a thermostat as a tanked water heater would, or by flow like a tankless one, which means you can go ahead and run the washing machine while your spouse washes the dishes and your kids line up for showers. No one will run out of hot water!

Looking At Tankless Water Heaters (Pros & Cons)

Now that you know what hybrid water heaters have to offer let’s take a look at tankless water heaters.

Some of the most obvious pros of a tankless water heater are that they take up less space, supply an unlimited amount of hot water, and are generally safer than traditional tank water heaters.

The cons are that they can take a little bit to deliver hot water, you can’t run multiple hot water appliances at the same time, and if you have no power, you have no hot water. 

Tankless water heater performance

The best thing about tankless water heaters is that they offer unlimited hot water. Have you ever been the last one in your family to shower, only to find that there is no hot water left for you?

That is typical of traditional storage tank water heaters because once the hot water that has been stored in the tank is gone, so is your hope for a hot shower – at least until the tank can fill back up with hot water.

That would never happen if you have a tankless water heater. 

Now, tankless water heaters do have what’s called a maximum flow rate. This means that they can only heat up a certain amount of water at one time.

So if all of your family members tried to shower at the same time, or someone is washing the dishes while you are trying to shower, the tankless heater would not be able to keep up, and someone would end up with a cold shower.

But as long as you stay below that maximum flow rate, you can take 5, 10, or even 20 consecutive showers and never feel the shower going cold. 

And another thing to note is that the hot water may not come out instantly. Since there is no tank that is sitting there with water that is already hot and ready to flow out, when you open the hot water tap, it will take a moment for the water heater to kick on.

So the first burst of water you get may be a bit cool, and depending on how far you are from the water heater, it could take somewhere between a few seconds to a minute for the hot water to reach you.

Tankless water heater energy efficiency

Although hybrid water heaters have a slight advantage over tankless in this category, tankless water heaters are still incredibly efficient. The EPA estimates that tankless heaters use up to 40% less energy than conventional models. 

Since they don’t have a tank to heat up, there is no need to preheat the water prior to it being drawn off into the house. This saves money and reduces energy consumption.

And if you are looking for something that lasts, tankless water heaters have an expected lifespan of 20+ years with proper maintenance and care. So they tend to last longer than any other type of water heater and often require fewer repairs.

Operating costs for tankless water heaters

Tankless water heaters are great at saving money because they save energy and reduce operating costs. The 40% less energy used that I mentioned above could mean up to 40% savings on your utility bills.

Choosing a gas tankless water heater rather than an electric one can save you even more money on your utility bill if you live in an area where gas prices are less than electricity. 

But since with a tankless water heater, you will have access to an endless supply of hot water, make sure you don’t offset your savings by staying in the shower longer! 

Tankless water heater installation costs

One of the best things about a tankless water heater is its size. It is so small and compact that it can be installed virtually anywhere in the house where hot water is needed. This makes them ideal for bathrooms, laundry rooms, kitchens, and basements.

Plus, installing a tankless water heater does not require extensive plumbing work, such as piping and connecting tanks. New tankless water heaters usually come ready to go directly into an existing gas supply pipe without having to cut a hole in the wall.

But you do want to keep in mind that tankless require quite a bit of power, and you may have to have an electrician come out and upgrade your electrical panel before installing one, which will increase the upfront costs.

And if you are running your house on solar energy, you may also need to check that your solar pack is able to support the load capacity on the tankless water heater.

So although the installation of tankless heaters will be more expensive than traditional models, they’re more efficient and last longer than something like a heat pump, so the savings will make up for the investment. 

Safety of tankless water heaters

Experts agree that tankless water heaters are safer than other models. 

Since the traditional tank-style water heaters store hot water inside a metal tank, minerals and sediment can build up over time, blocking the flow of water into the tank and creating a buildup of pressure.

In rare cases, the pressure has been known to explode tanks, causing extensive damage and injury.

To avoid this, plumbing codes now require the tanks to have a temperature and pressure relief valve that releases that pressure. But if you want to avoid that risk altogether, you could go with a tankless water heater.

Since tankless water heaters don’t have a tank, so there is no chance of an explosion happening.

Tankless water heaters also use precise temperature control, so they won’t overheat like traditional models do. This makes them safer because you won’t experience a dangerous temperature spike, causing you to burn yourself with the hot water.

And finally, there is also a lower risk of exposure to toxic metals with tankless water heaters. Tanks sit with water in them for long periods of time, which can lead to some corrosion inside the tank.

The rust and corrosion could make their way into your water lines, potentially exposing you to harmful toxins.

Reduced risk of water damage of tankless water heaters

No stored water means a lower risk of water damage. This is good news for homeowners looking to avoid costly repairs caused by a malfunctioning or broken water heater tank.

With a tank water heater, when the tank breaks, all the water drains out, leaving you with a flood in the area. This can result in serious damage to floors, walls, ceilings, and other structures.

That’s not to say tankless water heaters have a 0% chance of water damage. There are a few issues that could potentially cause a leak in a pipe somewhere, but at least it wouldn’t leave you with a flooded basement!

A recent study found that there are over 2 million residential hot water heaters installed in the United States alone – and nearly half of those units experience some sort of water leakage problem every year.

While most leaks occur during routine maintenance, such as replacing a worn-out thermostat, a leaking tank could lead to serious problems and should be fixed immediately by a professional.

Are Tankless Hot Water Heaters Better than Traditional Tank Water Heaters?

Tankless water heaters are better than traditional tank water heaters because that they are more efficient, safer, and will last longer. But ultimately, you’ll want to think about the hot water needs of your household and your house’s power supply to determine which water heater is right for you. 

Do Hybrid Water Heaters Run Out of Hot Water? 

No. The dual activation feature on hybrid water heaters that I mentioned above will keep this from happening. When your household is using a lot of water, it will fill its tank, which will keep the house from running out of hot water.

If you are running out of hot water with your hybrid water heater, you may want to give it a full inspection or call a professional to make sure everything is running correctly. 

Do Hybrid Water Heaters Dehumidify 

Yes, water heaters do dehumidify the space they are in. Remember, these water heaters work by sucking in air from the environment and heating it up. This process also creates a byproduct of air that is roughly 62 degrees Fahrenheit that circulates around the room and removes moisture.

So this could be an advantage if you want to install your hybrid water heater in your hot and sticky basement.

Best Hybrid Water Heater Brands 

Water heater technology is changing fast! And there are plenty of brands that are keeping up with the times. Here’s a quick rundown of the best hybrid water heater brands on the market right now:

American Standard Water Heater
  1. American Standard – They’re known for their quality products and customer service. Their hybrid water heaters are designed to provide consistent performance and reliability.
  2. Rheem – These water heaters are built to last and come with warranties ranging from 10 years to 20 years. They also feature a variety of features, including digital controls, remote thermostat access, and automatic shut-off valves.
  3. Kohler – Kohler offers a wide range of high-quality appliances, including water heaters. Their water heaters are designed with durability and efficiency in mind.
  4. LG – LG has been making top-of-the-line appliances since 1946. Today, they continue to innovate and improve upon their existing product line. Their hybrid water heater is no exception. It comes with a sleek design and a number of innovative features.
  5. Whirlpool – Whirlpool is another company that has been providing high-quality appliances for over 100 years. Their hybrid water heater combines modern technology with classic style.
Whirlpool Water Heater

Best Tankless Water Heater Brands 

Many of the companies that build hybrid water heaters also make tankless systems. I will point out a few that stand out in the tankless category as well. Here are my top 5 brands for tankless water heaters:

Rheem Water Heater
  1. Rheem – So good, it’s worth mentioning again. Rheem is one of the oldest names in the industry and still going strong today. Their products are reliable and feature high quality materials.
  2. Kohler – Kohler is another name that has been around since the 1800s. They are well known for their beautiful designs and innovative features.
  3. Goodman – Goodman is a relatively new company but already offers a wide range of options. They are known as being affordable and offering good warranties.
  4. Trane – Trane is a top-notch manufacturer that offers excellent performance at a reasonable price point.
  5. Amana – Amana is another popular brand that offers a variety of options. They are know for their reliability and affordability. 
Amana Water Heater

Call a Professional

When it comes time to install a new water heater, you will no doubt need to call a professional. The type of labor required to install your new water heater will vary given the type of water heater you choose – a hybrid, tankless, or traditional system – as well as where you plan to put it and what type of set-up your house already has.

Regardless of what kind of installation you have planned, it’s important to hire a professional plumber and/or electrician who can do the job correctly and safely.

It’s also recommended to contract a professional to keep up with regular maintenance. No matter what type of water heater you have, proper maintenance, like flushing out your water heater once a year, can help avoid any potential problems and extend the lifespan of your unit.


Both tankless and hybrid water heaters are becoming increasingly popular because they offer homeowners the chance to save money without sacrificing performance. 

I hope my list of pros and cons of each of them has made it a bit easier to decide between the two or at least helped you understand why some people prefer one over the other.

If you’re still not sure which one would be best for you, then I recommend calling a professional to come to your home and give you a recommendation.

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