A tankless water heater, also referred to as an “on-demand” unit, is designed to heat water as needed as opposed to a more traditional water heater that stores heated water. Without question, tankless water heaters offer numerous advantages, although there are a few disadvantages to consider as well.

For many people, buying or switching to a tankless water heater makes perfect sense, but because there are many factors involved, everything should be considered prior to making the purchase.

Key Advantages

Cost Savings – Although initially a tankless water heater costs more to purchase than a traditional water heater, there are incredible long-term savings. Because water is heated on an as-needed basis, this type of system is less expensive. With a standard heater, the tank is filled with water, heated, and then stored. To keep water hot costs money. When only a small amount of water is heated at time (as with a tankless unit), the cost is reduced.

Energy Savings – A tankless water heater is also a more energy-efficient solution. Usually, the amount of water used is less, which cuts down on consumption and reduces monthly utility bills.

Instant Hot Water – Another advantage is that tankless water heaters provide hot water immediately upon demand. Although this is great for anyone, it is especially nice for larger families. When a larger number of people use water from a traditional tank, at some point the amount of available hot water will diminish. That means that some people have to postpone their shower or bath so more water can heat. With a tankless water heater, there is adequate hot water for everyone.

Long Lasting – On average, standard water heaters last for 10 to 13 years. In comparison, a tankless unit will last up to 20 years. When building a new home or upgrading a home that will be lived in for a long time, a tankless unit is an excellent investment. Of course, for homeowners who plan to sell, this type of water heater makes an excellent selling point.

Space – There is a significant difference in the size of a traditional versus tankless water heater. On average, a traditional heater that holds between 40 and 60 gallons of water measures 60 inches tall. Because of bulk and size, older water heaters take up a lot of space. A tankless heater is only 20 to 28 inches in size, making it more compact. As a result, this type of unit can be installed in more areas, freeing up space for other things.

Examples of Disadvantages

As mentioned, there are far more advantages in choosing a tankless water heater over a more traditional unit, but there are a few disadvantages that you should consider before making this type of investment.

Output Limitations – A conventional water heater can hold up to 60 gallons of heated water. This means at any given time, there is usually adequate water for taking showers or baths, doing laundry, running the dishwasher, and so on. Although most tankless water heaters are also capable of providing excellent output, there are some limitations. These units are designed to supply several gallons of water, but if hot water is needed for multiple showers and other tasks simultaneously, the unit might have a difficult time keeping up with demand.

Initial Expense – As mentioned, it is more expensive to purchase a tankless water heater initially. This type of system will pay off in the long run, but to purchase a unit, you can expect to pay $1,000 or more. The price to purchase a conventional water heater runs between $300 and $400, so spending $1,000 or more based on options for a tankless unit is a major decision.

BTU Requirement – Before purchasing a tankless water heater, it is important to know if the needed BTUs are available. For a more conventional unit, 30,000 to 50,000 BTUs of propane or natural gas is required to heat water, whereas with a tankless unit, the requirement could be as much as 200,000 BTUs. In some areas with a low-pressure main, this level of BTU output is simply not possible. A quick call to the gas company or a plumber can determine if a tankless water heater is a viable option.

Electricity Cost – If you want your water heater to run off electricity as opposed to natural gas, depending on the area you live, the cost could be significantly higher. When considering pros and cons and comparing short- and long-term costs, electricity would be another factor. It may result in much the same cost, but it could more. It is always better to check than to find out later in the form of an extraordinarily high utility bill.

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