Tankless Vs Tank Water Heater Reviews and Buying Guide

Ecosmart Eco 11 tankless water heater

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When looking for a new water heater or a replacement for your current system, you need to assess your needs and decide whether to go for a tankless or tank water heater. The two types of heaters provide hot water but have differences in the way they work, cost, and other issues that you need to understand before making your decision. Ideally, you need to check the different systems and decide on whether a tankless or tank water heater is the right option to meet your family’s hot water needs.

The tank heaters usually heat and store the hot water in advance, even when no one is using it at that time. These are ideal for large families or spaces with high hot water demand. On the other hand, the tankless water heater is a compact, smaller capacity unit that heats water on demand. These are suitable for low-demand applications and small households.

Whether looking for a tankless or tank water heater, below are the main factors to consider.

  • Hot water demand/ capacity
  • Purchase price
  • Installation requirements and cost
  • Performance
  • Operating Costs 
  • Energy efficiency
  • Equipment service life

Tankless water heaters

The electric and gas tankless water heaters deliver hot water on demand and do not have a storage tank. These heaters have a wide range of sizes and different features but have limited capacities compared to storage-based systems. As such, the installation procedures and costs vary across different brands, models, energy source, size, outdoor or indoor, etc. For example, the installation of a gas tankless water heater differs from that of an electric model. 

Generally, the tankless water heaters are smaller in size than the tank systems and require less space inside or outside the house, depending on the model. Unlike the tank systems, the tankless water heaters have longer lifespans of over 20 years.

How do tankless water heaters work?

The tankless unit uses gas or electricity to heat the water instantly when there is a demand. Once a user opens a hot water outlet, the cold input flows through the electric heating element or gas heat exchanger pipes before reaching the sink, shower, or another faucet. However, since it heats the water as it passes through the system, the tankless water heaters have limited capacities. As such, unlike tank-based systems, the tankless supports only a few simultaneous outlets. If the demand for hot water is high, the system may not reach the preferred temperature. And the system will not provide a lot of hot water, fast enough, for everyone to enjoy. 

How do tankless water heaters work?
How do tankless water heaters work?

As the flow rate increase, the temperatures may reduce drastically; hence most models are unsuitable for large households or families. The capacity of a tankless is usually in terms of flow rate, which refers to the number of hot water gallons per minute that it produces.

A gas tankless water heater uses a flame to heat the water flowing through a heat exchanger unit, while an electric system uses a heating element. In practice, the gas tankless water heaters are faster and more energy-efficient. Also, they can work at any time, even when there is no electricity.

Benefits of tankless water heater

  • Higher energy efficiency since it does not need to maintain hot water in storage
  • Has a longer service life
  • Small physical size hence space saving
  • Most manufacturers offer longer warranties for the tankless water heaters

Disadvantages of the tankless water heaters

  • Costly to purchase and install
  • Some models require major changes to your home’s electrical or gas lines and components to support the systems.
  • Savings from higher energy efficiency may not be large enough to balance out the high purchase and installation cost.  
  • Limited capacity and unable to support large families unless you install multiple units.

Is a tankless water heater a good investment?

While tankless water heaters are not ideal for every application, they are good choices in various conditions. For instance, if you have a gas line in your home and can install the tankless with little effort and minimal changes, then a gas-powered tankless heater could be a good choice. Because of the high efficiency, the gas water heater will enable you to save money in the long term.

If you are looking for a hot water solution for low-demand applications such as a sink, or hand washing, you could go for a point of use tankless water heater. These are not only low capacity systems but also very small. The POUs can easily fit in small spaces such as under a sink and similar locations.

Further, you could also install the point of use (POU) water heater near the washing areas, a shower, or another applications area, hence reducing additional piping or modifications. Most often, the small tankless water heaters plugs in to the standard outlets. However, the larger systems may require dedicated gas lines or electrical circuits. Some tankless heaters are even portable, and you can use them in mobile homes, RVs, tiny homes, and similar spaces.

Best Tankless water heaters

The best tankless water heater may depend on your needs. For example, there is the best tankless water heater for RVs, the best electric tankless water heatersthe best gas tankless water heater, the best point of use tankless water heaters for low demand applications, etc. That said, below are some of the best tankless water heaters that we recommend.

EcoSmart ECO 27 Electric tankless water heater

EcoSmart ECO 27 Tankless Water Heater
EcoSmart ECO 27 Tankless Water Heater

EcoSmart ECO 27 is a compact, energy-efficient, and visually appealing tankless water heater suitable for households with limited utility space. Despite its small physical size, the tankless water heater provides 6 gallons per minute in warm weather and 4 GPM during winter.

The powerful water heater can support multiple showers or applications hence suitable for medium and large households. A digital control allows you to adjust the temperature of the hot water in one-degree steps. 

Rheem RTGH-95DVLN Natural Gas Tankless Water Heater

Rheem RTGH-95DVLN Natural Gas Tankless Water Heater
Rheem RTGH-95DVLN Natural Gas Tankless Water Heater

The Rheem RTGH 95DLN is a high-efficiency, indoor-only natural gas tankless water heater. It is a compact, 9.5 GPM, which is easy to install and maintain.

The tankless heater has inbuilt electronic controls that enable you to adjust the temperature, thus improving comfort, energy efficiency, and safety. Also, the low NOx emissions, condensing heater has a stainless steel heat exchanger and an energy efficiency of 94%. 

GASLAND BE158 Portable Propane Gas Tankless Water Heater

GASLAND BE158 Portable Propane Gas Tankless Water Heater
GASLAND BE158 Portable Propane Gas Tankless Water Heater

GASLAND BE158 is a portable and energy-efficient propane-powered outdoor tankless water heater. The compact and fast 1.58GPM heater is also lightweight hence easy to carry and install a wide range of outdoor spaces. 

Since it uses gas, you can install it anywhere, even in locations without electricity. Typical application areas include RVs, mobile homes, camping, and other outdoor places where there is a need for hot water.

Tank water heaters

The storage tank systems are the most common water heaters in many households and commercial spaces. A typical unit consists of an insulated tank that stores hot water and makes it available on demand. The heaters use electricity or gas to heat the water which they then store in the tank for immediate or later use. 

Installation procedures and costs of the tank water heaters vary according to size and other factors. However, they are usually easy to install equipment that can also fit is a wide range of indoor spaces including but not limited to a garage, a closet, and other free spaces.

Usually, the tank water heaters have a lifespan of between 10 and 15 years

How do the tank water heaters work

The storage-based water heaters have large hot water tanks with capacities that range between 20 to 80 gallons. In normal operations, the water heaters heat the water in the tanks, either using gas or electricity and then maintain the water at about 120 degrees F. 

When a user opens a tap or shower or any other hot water outlet, the water comes out of the tank. As the volume of hot water decreases, the heater will require some time to heat additional cold water. In this case, you need to wait for some time for the water to get hot.

On energy use, the natural gas tank water heaters are more efficient, hence cheaper to run than the electric counterparts, but are expensive to purchase. If you can get a cheap source for gas, a gas-powered model may be good for you. Additionally, the gas models will also work when there is no electricity.

Due to their large size, the tank water heaters require bigger indoor spaces, as they cannot withstand outdoor environments. 

Benefits of tank water heater

  • They are cheap to purchase and install
  • Easy installation procedure
  • You do not need to modify your electrical system nor add more components to install an electric water heater
  • It is a tried and proven technology

Disadvantages of tank water heater

The tank water heater has a lower energy efficiency because of the standby losses. The stored hot water often loses some heat, and the heater must keep on reheating the water to maintain it at a set temperature. Drawbacks of a tank water heater include

  • It has a short lifespan of between 10 and 15 years.
  • They have a long waiting time for the hot water. For example, if the tank is empty, it will take quite some time to heat the water and make it available.
  • High risk in case there is a malfunction such as a leakage which could result in spillage and damage to your house
  • The standby losses increase with the age of the water heater and are higher for older systems. Consequently, this increases the running heating energy costs.

Is a tank water heater good for you?

Since they are cheaper than other models, they could be a good choice when you have a small budget. Generally, tank systems are less costly than tankless or hybrid water heaters.

If your home does not have gas and runs entirely on electricity, a tank water heater may be the best option. For instance, if you have a standard electric service of about 200A and do not want to upgrade to accommodate an electric tankless water heater, which requires more energy and a dedicated circuit. Despite the lower efficiency, the tank water heaters use standard electrical circuits. 

Even if your home has a gas line, you need to consider the cost of additional plumbing and venting to support a tankless gas water heater. If the potential energy savings from a tankless are insignificant based on your needs, then you may need to go with a tank system.

Our choice for the best storage tank water heaters 

Below are two of the best tank water heaters. One of the heaters is electric while the second one is gas-powered.

A.O Smith Signature 50-gallon gas tank water heater

A.O Smith Signature 50-gallon gas tank water heater
A.O Smith Signature 50-gallon gas tank water heater

The A.O Smith Signature 50-gallon system is a tall, reliable, and efficient natural gas tank water heater. It is a 50,000 BTUs heater suitable for households with five or more people. The low NOx tank water heater has an inbuilt electronic gas valve that allows you to control the water temperature even without an external electricity source.

It has a ceramic fused tank that is corrosive resistant and a self-cleaning dip tube to prevent or minimize sediment build-up hence providing you with long service life. Additionally, it has a status LED status indicator for easy diagnostics. 

Rheem performance Standard 40 Gallon Electric Water

Prevent Water Heaters Overheating
Prevent Water Heaters Overheating

The Rheem performance water heater is an energy-efficient electric tank water heater with a 6-year limited warranty. The 40-gallon tank water heater with an energy factor EF or 0.96 has an isolated tank design that minimizes heat losses. Rheem Performance is a 240VAC, with a dual 4.5KW copper heating element and a hot water temperature range of 120-160 degrees F   

It has a premium grade anode rod to reduce deterioration and corrosion hence ensures longer service life. The water heater has over-temperature protection that disconnects the electrical power when the temperature exceeds the set threshold.


When looking at the tankless vs. tank water heaters comparison, the tankless seems more attractive. It has benefits such as compact sizes, better energy efficiency, and low operational costs. However, it is more costly to purchase and install than a storage-tank-based system. Unfortunately, the tankless may not be for you if you have a large household with high hot water demands. 

If you have a medium or a situation where there is a regular or high demand for hot water simultaneously, you may consider installing multiple tankless water heaters. However, as the demand increases, you need to determine if the cost of purchasing and running a higher-capacity tank water heater is more cost-effective. If you settle for the tank system, make sure you understand its lifespan and the maintenance costs, such as replacing the anode rods and other parts.