Tankless Water Heater vs. Conventional: Which is Right For You?

Choosing the right water heater is a big decision that affects your energy bills and comfort. Should you go with a modern tankless water heater or stick with a conventional model?

Not only do tankless water heaters offer immediate warmth and comfort, but they also occupy less space and are more energy-efficient. But before you rush out to buy one, learn the facts about both tankless water vs. conventional water heaters to decide which one is right for you.

What’s the Difference Between Tankless vs. Conventional Water Heaters?

A conventional water heater stores and heats a large tank of water — usually 40 to 80 gallons — ready for use at any time. 

What is a tankless water heater? It heats water on demand as it flows through the system, eliminating the need for a tank.

Conventional water heaters are bigger and use more energy than tankless water heaters. Tankless water heaters, on the other hand, last longer than conventional water heaters but may struggle when multiple faucets are using hot water at once.

Pros and Cons of Tankless Water Heaters

You might be wondering — is a tankless water heater better? Let’s go over the pros and cons to help you figure that out.

Advantages of Tankless Water Heaters

• Continuous hot water. Large families know what a pain it is to hop into the shower, and there’s no hot water available because there wasn’t time for the water heater tank to refill and reheat. With a tankless hot water heater, this doesn't happen as long as you install the right size unit for the size of your home and family. Even if you don’t have a large family, a tankless hot water heater allows you to use multiple appliances at once without running out of hot water.
• Reduced energy bill. Because tankless heaters are essentially "off" when the water tap is off, they use less energy overall. How much do tankless water heaters save? An ENERGY STAR-qualified tankless hot water heater can save the average family $95 or more annually.
• Longer life. Get more bang for your buck with a greater lifespan. Specifically, conventional hot water heaters last about 10 to 13 years compared with up to 20 years for a tankless hot water heater.
• Less space. Did you know that tankless hot water heaters can be hung on a wall almost anywhere in your home? A tankless hot water heater takes up a lot less space than a conventional hot water heater.

Disadvantages of Tankless Water Heaters

• Higher upfront cost. Tankless units can cost two to three times more than traditional tank heaters. Between the price of the unit and the more complex installation, the initial investment may be a hurdle.
• Complex installation. Many homes require plumbing upgrades, larger diameter gas lines, or dedicated electrical circuits to support a tankless system. This can drive up installation costs and extend the timeline of the project.
• Limited flow rate. Although tankless heaters offer endless hot water, they can struggle to keep up with high-demand situations like running a shower, dishwasher, and washing machine at the same time. Homes with multiple simultaneous users may need multiple units.

Pros and Cons of Conventional Water Heaters

Conventional water heaters have their benefits and drawbacks, too. Here’s a closer look.

Advantages of Conventional Heaters

• Lower initial cost. Conventional tank water heaters are much more affordable upfront than tankless systems. A basic model and installation can cost significantly less, making it a budget-friendly option for most homeowners.
• Straightforward installation. Most homes are already equipped to handle tank-style water heaters, meaning you shouldn’t have to do any retrofitting. This reduces labor time and installation complexity.
• The latest models have more insulation, thanks to a government mandate, making them more efficient than ever.

Disadvantages of Conventional Heaters

• Energy loss from standby heating. One of the biggest drawbacks of conventional tanks is that they continuously heat water — even when you’re not using it — leading to standby energy loss and higher utility bills over time.
• Shorter lifespan. Traditional tank-style heaters typically last 8–12 years, compared to 15–20 years for tankless models. This means more frequent replacements and potential disruption.
• Takes up more space. Conventional water heaters are bulky and often require a dedicated space like a utility closet or garage. This can be a limitation in smaller homes or apartments.

Energy Efficiency and Cost Comparison

When comparing a tankless water heater vs. a conventional one for energy efficiency, only one comes out on top.

Initial Cost vs. Long-Term Savings

Tankless systems cost more upfront. Expect to pay a few thousand dollars for the unit and installation.

Conventional models, on the other hand, are more affordable to buy and install.

With that said, tankless models can recoup their costs through lower utility bills, especially in homes with consistent daily use. In this way, tankless water heaters are better than tank water heaters.

Operating Efficiency and Utility Bills

In the battle between tankless vs. conventional water heaters, you can see a big difference. ENERGY STAR-certified tankless water heaters save a family of four $20 a year in energy costs compared to a conventional gas tankless model. But you can save even more if you learn how to maximize water heater efficiency.

Installation Requirements and Maintenance

Is a tankless better than a tank water heater when it comes to maintenance? 

Plumbing and Venting Needs

Tankless heaters often need new venting or upgraded gas/electrical systems. However, conventional heaters can usually be swapped in with fewer changes.

Maintenance Frequency and Lifespan

Tankless models require annual descaling and filter cleaning. With proper maintenance, they can last 20+ years.

You also have to maintain a conventional tank with regular flushing and anode rod checks. Even with great maintenance, these tanks only last around 6 to 12 years, after which you’ll need to remove your old heater and replace it.

Which Water Heater Is Right for You?

With all of this in mind, you still might be thinking — should I get a tankless water heater? Use this comparison chart to help finalize your decision.

Frequently Asked Questions 

Are tankless water heaters worth the investment?

For many households, yes. The long-term energy savings and convenience make them a worthwhile choice—especially in small or energy-conscious homes.

Are tankless water heaters gas or electric?

They can be either. Gas models are more common and powerful, but electric versions are great for homes without gas access.

Final Thoughts: Conventional vs. Tankless Water Heaters

In summary, here are the main differences between tankless vs. conventional water heaters:

• Tankless = Long-term savings, energy efficiency, compact
• Conventional = Budget-friendly, simpler to install, reliable

Still unsure which to choose? Let the experts at Roto-Rooter help you make the best call for your home. We’re here to assist with installations, upgrades, and regular maintenance so your water always runs hot when you need it. Ready to make the switch? Call Roto-Rooter today!