10 Pros and Cons of a Tankless Water Heater

Have you been looking into ways to reduce your home’s energy use and cost? If you live in a home with a water heater tank, then you know how expensive this water heating method can be. In addition to being expensive, conventional tank water heaters take up a ton of room, have a short lifespan, and aren’t always able to meet the hot water needs of your household.

Tankless water heaters are an excellent option for homeowners because they take up less space, save money by being more energy efficient, and have a longer lifespan. However, you’re looking at a higher cost upfront, and this system comes with a few other disadvantages homeowners will want to take into account.

If you’re on the fence about whether to get a tankless water heater or stick with your conventional tank heater, then you’ve come to the right place! We’ll discuss the pros and cons of a tankless water heater so you can confidently choose the right system for your home.

What Is a Tankless Water Heater?

Tankless water heaters, also known as on-demand or instantaneous water heaters, provide homes with hot water only when needed. Unlike conventional water heaters, which constantly run to heat the water stored in their tanks, tankless water heaters only heat water when necessary.

When you turn on a hot water faucet, cold water flows through a heat exchanger in the tankless water heater unit. An electric element or a natural gas burner heats the water, so with this method, you have an unlimited and constant source of hot water.

Electric Tankless Water Heater

This method allows you to have a steady supply of hot water because you don’t need to wait for a tank to fill and reach optimum temperatures like a conventional system.

However, the flow rate of tankless water heaters tends to be a bit slower than a conventional system, so you may notice reduced water pressure with this unit.


There are plenty of advantages to using a tankless water heater. Some advantages may be obvious, while others will surprise you! Let’s look at the pros of using a tankless water heater!

Saves Money

Tankless water heaters save homeowners money in a variety of ways. These tanks have a long lifespan, so you won’t have to worry about replacement costs. They also tend to require less maintenance than conventional systems, which means fewer repair bills for homeowners.

In addition to these cost-saving benefits, tankless water heaters are also more energy efficient than conventional systems. This will save you plenty on energy bills, especially if you get the newer Energy Star certified models.

Saves Space

Conventional units are very large and bulky. With a tankless water heater, you’re looking at a unit the size of a small suitcase. This will save you a ton of space and is very helpful for homeowners without a basement or limited room.

unit the size of a small suitcase

Energy Efficient

Tankless water heaters only run when there’s a demand for hot water, unlike conventional systems, which run 24/7. Tankless water heaters can reduce your energy costs by about 25% annually. The newer Energy Star certified models have the potential to save you even more in the long run so, if you’re going to purchase a tankless water heater, you should look into getting a newer model.

Hot Water Supply

Conventional water heaters take time for the tanks to fill and heat up to the optimal temperature. You could be waiting for thirty minutes or more before you’re able to take a hot shower. Tankless water heaters eliminate this headache for homeowners and supply you with hot water quickly whenever needed.

Most tankless water heaters can supply homes with hot water at a rate of 2-5 gallons per minute. You’ll always have hot water with this type of unit. However, the water pressure may not be ideal if you’re trying to take a hot shower while also running the dishwater.


The life expectancy of a conventional water heater system with a tank is only 8-12 years. A tankless water heater is much more durable and long-lasting. You won’t need to replace this system for upwards of twenty years!

A tankless water heater is much more durable and long-lasting.
A tankless water heater is much more durable and long-lasting.

Special Financing and Tax Breaks

Since tankless water heaters are so energy efficient, there are perks to purchasing one for your home. Many places offer special financing deals, such as 0% APR for the first six months, in order to entice more homeowners into making the switch.

You’re also eligible for the tankless water heater tax credit initiated in 2009. The federal government created this tax credit to incentivize homeowners to switch to more energy-efficient tankless water heaters in an effort to cut down on this country’s carbon footprint.

You’ll receive a residential energy property credit of $300 for using a tankless water heater with a renewable energy source.

Tankless Water Heaters Eliminate “Standby Loss”

Conventional water heaters experience a lot of standby loss. Standby loss refers to the heat lost from water heater tanks when hot water isn’t used. This is a big waste of energy and resources in conventional water heaters.

Tankless units only heat water as needed, so no heat gets lost during the process. This is one of the many reasons this system is so energy efficient.

Longer Warranties

Warranties are beneficial for minimizing homeowners’ financial risk when purchasing a major unit like a water heater. Conventional systems generally have a six-year tank and six-year parts warranty.

The average warranty for a tankless water heater is generally ten years, which is nearly double the length of conventional water heater warranties. If your heat exchanger stops working after a few years, the warranty allows you to replace it free of charge!


Despite all the amazing benefits of tankless water heaters, they aren’t perfect. These units still come with some downsides, and you want to ensure you’re aware of the cons before making a purchase.

Limited Hot Water for Multiple Outlets

Tankless water heaters have a limited capacity for their hot water output. If you live in a home with several people and have one person trying to take a shower while another does the dishes, then you could see a serious reduction in hot water output and pressure. A common solution is to install a second tankless water heater, but this is an expensive solution.

Power Outage

Tankless water heaters need electricity. If you live in an area that experiences frequent power outages and don’t have a generator, then your water heater will be affected by those power outages.

Costs More Upfront

Tankless water heaters are going to cost you more upfront than a conventional model. The cost of the unit and installation are more expensive for a tankless water heater.

Unit Cost

The cost of a tankless water heating unit will depend on the model you choose. Propane and natural gas models run between $1,000-$1,500, while electric models can cost slightly less, usually between $500-$1,500.

Inconsistent Temperatures

Homeowners often experience fluctuating and inconsistent temperatures with tankless water heaters. These units are designed to work without delay, so it’s common for water to run very hot one moment and then cool the next.

Rerouting Gas Lines

Sometimes homeowners need to reroute gas lines before installing a gas-powered tankless water heater. However, you can avoid this issue by purchasing an electric tankless water heater instead.

Additional Maintenance is Possible

Tankless water heaters do need frequent maintenance. Your system needs to be flushed at least once a year to remove mineral buildup. Homeowners with hard water should consider flushing their system twice a year.

In addition, you’ll need to change the air and water filters every four to six months. You also want to keep up with dusting the outside of your unit to ensure dust, dirt, and other debris don’t get inside your system and cause clogs or a loss of efficiency.


You’ll need to contact a professional to install your tankless water heater. While videos and resources online instruct you on how to install it yourself, it’s best to have a professional do so. Otherwise, you might void your warranty.

The price of installation can be a little steep, depending on your location and the service you go through. On average, the cost of installing a tankless water heater will range between $4,500-$6,500.

Maintenance and Care

It’s so important to keep up with the maintenance and care for your tankless water heater. Most of the maintenance can be done yourself, although certain tasks are best done by a professional.

Every year, or twice a year for homeowners dealing with hard water, your unit will need to be flushed. This will rid the unit of any mineral buildup, preventing clogs from forming and keeping your water heater running at peak efficiency.

You’ll also need to change out the air and water filters every four to six months. In addition to those responsibilities, you’ll want to dust and wipe off the outside of your unit frequently.

This will help prevent a buildup of dust, dirt, and other debris which could enter your unit and cause issues. When you’re dusting off your unit, you can also check for leaks, rust, or other problems.


The lifespan of tankless water heaters is a huge selling point for most homeowners. Tankless units can last for 20 years or more, which is far longer than conventional water heats with a lifespan of 8-12 years. Buying a tankless water heater for your home will prevent you from having to replace it too frequently and will save you money in the long run.

Top Brands

If you decide to go the tankless water heater route, then you’ll want to purchase one from a top brand. These brands have been around for a while and offer high-quality products with reliable warranties.

Here’s a list of some of the top brands offering tankless water heaters:

  • Rinnai- This brand is very popular, although they only produce gas-powered models. Their models are all capable of heating enough water for small homes.
  • Rheem- Rheem produces gas and electric models that are known for their reliability and ease of installation.
  • Noritz- You’ll find a wide range of gas models with Noritz. They were the first manufacturers of tankless water heaters, so they have a solid brand history.
  • Stiebel Eltron- Producing efficient and compact models, this German brand offers a range of gas and electric models.
  • Bosch- While Bosch does offer some gas models, they’re more well-known for their highly reliable electric models.
  • Takagi- This Japanese brand only offers gas models, but their price points are generally lower than other brands.


Tankless water heaters (such as the Rinnai tankless water heater) have a higher upfront cost than conventional units, but their pros far outweigh their cons. These heaters have a longer lifespan, are more energy efficient, and save you money in the long run with tax breaks and special financing options. Top brands like Stiebel Eltron and Rheem offer a range of gas and electric models at varying price points, so they have options for every homeowner.

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