Tankless Water Heaters: Should You Get One for Your Home?

Tankless Water Heaters: Should You Get One for Your Home?Statistics show that a regular shower head can pump out anywhere from 7 to 10 gallons per minute. Water-saving shower heads drop that to 2 to 4 gallons per minute. And as the typical shower can last anywhere from 12 to 15 minutes, it’s possible to use as much as 150 gallons for one shower!

That’s a lot of water…and a lot of energy is used to heat that water.

If you’re like thousands of other homeowners, maybe you’ve thought about installing an electric tankless hot water heater in your home to help save money and reduce your energy consumption.

Per Energy.gov, “for homes that use 41 gallons or less of hot water daily, demand water heaters can be 24%–34% more energy efficient than conventional storage tank water heaters. They can be 8%–14% more energy efficient for homes that use a lot of hot water — around 86 gallons per day. You can achieve even greater energy savings of 27%–50% if you install a demand water heater at each hot water outlet. ENERGY STAR® estimates that a typical family can save $100 or more per year with an ENERGY STAR qualified tankless water heater.”

Sounds good, right?

But before you install that tankless hot water heater, it’s important to understand the pros and cons before making the investment…which can be significant.

Benefits of a tankless hot water heater

A continuous supply of hot water

After the cold water is pushed out of the pipes, the tankless water heater will nearly instantly provide a continuous supply of hot water.

Longer lasting water heater

On-demand water heaters are rated to last about twice as long as conventional water heaters. This means your unit could last 20 years as opposed to 10.

Lower monthly costs

According to Consumer Reports, tankless water heaters are more efficient than regular water heaters by as much as 22%. While this might not seem like a lot, it adds up over time, saving homeowners hundreds of dollars a year.

Space saving

Tankless water heaters are typically hung on the wall, which saves you space. This is a big benefit, especially for smaller homes.


Just like conventional hot water heaters, tankless water heaters are available in both electric and gas models.

Longer warranties

Given the durability of tankless water heaters, manufacturers will often provide longer warranties than for conventional hot water heaters.

Eliminates “standby loss”

Rather than pay for water to be heated when you don’t need it, a tankless water heater will only heat the water you need, as you need it.

Great for small homes with minimal hot water needs

A tankless water heater will easily accommodate the needs of one to three people living in a smaller home.

Drawbacks of a tankless hot water heater

Upfront costs

A big hurdle for many homeowners is the cost of a tankless water heater.

Conventional water heaters can cost, on average, around $500, but in comparison, the smallest tankless water heater can cost around twice that.

And the larger the home and more individuals living in it, the larger the units required to service the home, which of course also drives up the cost.

Add in the possible need for a water softener and/or gas line changes and you could rack up some serious costs to install a system that will take years to pay for itself.

Temperature fluctuations

Differences in temperature can be a result of too many outlets trying to access hot water at the same time and/or when a faucet is only open slightly – such as when someone is brushing their teeth.

Limited hot water

Contrary to what many manufacturers claim, it is possible to run out of hot water with a tankless water heater.

This happens when there are too many demands on the system, such as running the dishwasher, taking a hot shower and running a load of laundry.

Water softeners are sometimes required

If your tankless water heater needs a water softener attached, this could require more space than what a conventional hot water heater would take up.

Which of course, negates its space-saving features and increases the installation costs.

Changes to gas lines

For tankless water heaters that use gas, sometimes new lines will need to be installed and existing ones need to be re-routed. Or new vents need installed which adds to your installation costs.

Return on your investment takes longer

Since initial costs to install a tankless water heater are higher than conventional hot water heaters, it could take longer to recover your investment.

Per Consumer Reports, homeowners save about on average $75 per year, which means it could take more than a decade to recover your costs.

More maintenance could be needed

Warranties often require homeowners to perform yearly maintenance checks including flushing out their system to keep minerals from building up.

Home value

Finally, if you do opt to go with a tankless water heater, it could be a good selling point in some markets.

A Zillow report analyzed more than 2 million homes sold between January 2014 and March 2016.

Homes that featured tankless water heaters sold 43 days faster and 4 percent more than anticipated.