Hybrid Vs. Tankless Water Heaters

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When looking for a new water heater for your home or business, you have several options to consider. Amongst the most common types is the traditional tank water heater, a tankless or a hybrid system. Each of these has different features that make them ideal for some applications. As such, knowing how each type works, benefits, drawbacks, and differences enable you to make a more informed decision. As the heating technologies continue to evolve, hybrid and tankless water heaters are more energy-efficient than the older traditional storage-based models.

Biselong Tankless water heater
Biselong Tankless water heater

In this article, we will only focus on the hybrid and tankless water heaters, see how each type work, the differences between the two, as well as the advantages and disadvantages. We will first look at each of the water heaters and then compare the two. Finally, we will try to see the ideal environment and application for each of the water heaters.

What is a hybrid water heater? 

A hybrid is a combination of some of the features we find in the traditional storage-based heater, heat pump heaters, and tankless water heater. To understand how the hybrid is a mix of features from the other three systems, below is a brief overview of how each of them works.

Tankless water heaters

A tankless water heater does not store hot water. Instead, it heats it on demand. The tankless heaters have higher energy efficiencies, are smaller and cost-effective. However, most of them have limited capacities.

Tank water heaters

The tank type usually heats and keeps hot water in a storage tank. They have bigger capacities and able to serve larger families and businesses. However, since they need to heat and keep hot water all the time, they consume more energy and are thus not as efficient as the tankless.

Heat pump water heaters

Unlike the tank or tankless water heaters, the heat pump type does not heat the water directly from electricity. The electricity is simply for the pump. Instead of warming water using a heating element, the process involves drawing heat from the surrounding air and then using this to heat the water. The heat pump units have a working principle similar to the refrigerator or air conditioner but in reverse. Generally, the heat pump heater has a very high efficiency under ideal conditions. However, they cannot heat water during cold weather.

Hybrid water heaters

The hybrid derives the best features from the above three types.

  1. It should ideally operate as a heat pump heater that has the highest efficiency. However, during cold weather, it will not heat the water. 
  2. At this time, it should start operating as tankless by heating the water directly using the electrical heating element.
  3. Since it heats the water in a tank, the hot water will remain in storage. When users want hot water, it will be available much quicker than from a tankless.

How do hybrid water heaters work?

A hybrid water heater uses a heat pump to move the heat from one place to another. In practice, they use the same principle as a refrigerator, but in reverse. That is, they will draw the warm air from the surroundings, such as from the room they are installed in, and then pump it into the tank. Consequently, the hot air will heat the water. Generally, these are more energy efficient by about two or three times compared to the traditional storage-based electric water heaters.

How do hybrid water heaters work?
How do hybrid water heaters work?

Unlike other forms of water heaters such as storage-based and tankless, the hybrid does not use electrical resistance heating, natural gas, or propane to heat water in the tank. Its operation is usually different in that it uses electrical energy to power the systems that draw heat from the air in the room, or from outside.

Benefits of hybrid water heaters

More efficient: The hybrid water heaters are probably the most efficient. Ideally, they are two to three times more efficient than most electric water heaters. Despite being more costly to purchase, install and maintain, the significant reduction in energy bills results in greater savings and a shorter payback time. 

Safer: Unlike gas-powered systems with higher risks of health hazards from toxic exhaust, the hybrid, which uses a moderate amount of electricity, is safer.

Environmentally friendly: In addition to using less energy to heat the water, the heater emits only small amounts of greenhouse gases.

They use waste energy during winter: People often heat their homes or spaces, during the cold seasons. However, some of the extra energy released into the room often goes into waste. But a hybrid can draw this heat and use it for water heating, hence reducing the energy use and conserving more energy.

Cools the rooms during hot weather: The hybrid water heaters work as air conditioners by sucking the heat from the air during the hot weather. This results in cooler rooms and hence reduces the demand for the actual air conditioner. As such, it helps to reduce the air conditioning energy bills during hot weather such as summer.

Electrolux Hybrid Water Heater
Electrolux Hybrid Water Heater

Disadvantages of hybrid water heaters

  • The hybrids are usually more costly to purchase and install than the tankless models.
  • They require more space and not suitable for outdoor installation. Ideally, the hybrid requires spaces with at least 1000 cubic feet of air. As such, you cannot install it in confined spaces such as inside a closet. In that case, if you have an existing water heater, you may need to do some modifications to accommodate a hybrid. Additionally, due to the heat pump at the top of the heater, the unit requires a room where the ceiling is higher. 
  • Require condensate drains to remove the moisture that the heater collects as it heats the water. 
  • Hybrids are uneconomical in cold weather since they rely more on supplementary electrical heating. The hybrid systems are only suitable for locations where temperatures remain within the 400 – 900 F range throughout the year. Also, if you leave it on during the cold weather, it will draw all the heat from the room hence making or colder and forcing you to increase the heating energy and bills. 
  • Requires regular air filter replacement: The hybrid water heater has an air filter when cleans the air that it draws into the system. With time, the filter gets dirty, and this results in inefficiencies. 

Tankless water heaters

The tankless water heaters provide instant hot water on demand. Unlike traditional tank heaters, they do not heat and store hot water for later use. As such, they use less energy since the stored hot water may lose some warmth before use. The tankless systems are usually available in a wide range of sizes and capacities, thus allowing users to choose what works best for them. However, some of them have limited capacity and may not be suitable for large families or applications with high demand for hot water.

Benefits of tankless water heaters

  • Tankless water heaters are long-lasting with a service of over 20 years. On the other hand, tank water heaters usually last 8 -12 years and hybrids 13-15 years.
  • It does not require a lot of space, and you can install some models outdoors, or in mobile homes as well as camping vans (RVs) and other temporary structures. Ideally, some tankless models are portable and especially gas-powered heaters. 
  • The tankless provide hot water instantly when a user opens a tap, sink, or shower. Although the capacity per minute may not be very high, proper sizing ensures that you can find the right model that meets your household’s hot water requirements.
  • Provides unlimited hot water on demand: There are no risks of running out of hot water since it heats.
  • More energy efficient than tank heaters but less than hybrid  

Disadvantages of tankless water heater

  • Higher initial costs: Can cost twice as much as a traditional hot water system. Compared to a hybrid, the tankless may be cheaper.
  • Since the tankless water heaters have limited capacity. You may require several units to adequately provide hot water to the entire household if you have a large family. And this may drive up the costs.
  • Some models, such as the gas-powered water heaters, may have complicated installation procedures.

Comparing the hybrid and tankless water heaters

Generally, there are four issues that you need to consider when deciding on which type will work better for you. These include energy efficiency, performance, installation, and operational costs.

Heater’s energy efficiency

Generally, both the hybrids and tankless units are more energy-efficient compared to the traditional storage-based heaters. A hybrid water heater extracts the ambient heat from the air and then uses it to heat the water. It does not generate its heat using an electrical heating element compared to the other electric-based systems. Ideally, this is very energy efficient. However, it might not generate enough heat to warm the water to the desired temperatures during cold weather. As such, it will require supplementing with the electrical element – which may increase the operating costs. On the other hand, the tankless only heats water when someone wants to use it. Therefore, it does not need to use more energy to maintain hot water in the storage tank.

Water heater performance

While the tankless water heaters provide you with instant hot water on demand, most models have limited capacity and only serve one to four outlets for most models. In most cases, you may not use two or more showers simultaneously. As such, some tankless water heaters cannot serve large households unless you use several units. The hybrids are usually large and have enough capacity to serve large families since they have a tank. However, it may not perform well during cold weather. Other than increasing the energy bills, the water may take longer to reach the desired temperature. 

 Installation costs

The installation costs for a tankless water heater vary according to the fuel, capacity, household or facility where to install the unit, and other conditions. For a large gas tankless water heater that needs to serve many users, the installation costs may be higher since it may require upgrading the gas line and plumbing. Similarly, large electric tankless or hybrid water heaters will require dedicated electrical circuits and breakers. Generally, the installation costs for the hybrid and tankless are almost the same. However, it can be higher if you need to modify a room to accommodate the hybrid heater. 

Operating costs

A gas-powered tankless water heater has fewer operational costs compared to the electric model. Generally, gas is usually cheaper than electricity, and its heaters have higher energy efficacy than the electric counterparts. In warm climates, the operating costs of a hybrid may be lower than a gas or electric tankless heater. However, the operating costs for the hybrid could go higher in cold weather but still slightly lower than, or almost the same as gas tankless. 

Is a hybrid or tankless water heater good for me?

Hybrids and tankless are cost-effective and energy-efficient, and environmentally friendly water heaters. If you enjoy warm climates throughout the year, you have a spacious room, and access to electricity, the hybrid may be good for you. On the other hand, if you have a smaller space and have access to cheap gas, the tankless water heater is the ideal choice, which is also the case if you live in colder areas.


While the hybrid heater delivers high energy savings and has other benefits, it may not be the best tank for every household, business, or application. You may need to consult widely to see if it will indeed meet your hot water needs. If not, you still have many other options, if you want a smaller unit, tankless water heaters have a wide selection to meet almost any need.