When shopping for new hot water tanks, you will quickly discover that your choices are not limited to just a traditional water heater. Tankless water heaters are designed to provide your home with hot water without the need for a tank. To help you make the right choice for your home, it is important to understand the differences between each. 

Upfront Cost

There is a significant difference in the upfront cost of the water heaters. A traditional electric water heater starts at $400, while the starting cost for the tankless heater is $1,800. It is important to note that the cost of installation increases the upfront cost of the heater. 

Energy Efficiency

Even though a traditional water heater is less expensive than a tankless heater, it can cost more to operate it over a period of time than the tankless. Tankless water heaters operate by heating water as you need it, which means there is no need to keep a tank of water in reserve heated. 

By contrast, a traditional water heater holds gallons of water in reserve and energy is constantly needed to keep the water heated. As a result, your energy bills can be higher. Over the long run, the cost of the tankless water heater can be recouped through energy bill savings. 


Regardless of whether you select a gas or electric water heater, the unit usually lasts between 10 to 15 years. Most of the parts are irreplaceable, so if it requires repair, it is likely that the heater will need to be replaced completely. 

A tankless water heater has a life expectancy that extends to more than 20 years. Unlike the traditional heater, the tankless heater has parts that are removable, which makes it easier to perform repairs. 


One of the main advantages to having a tankless water heater is that it does not take up much space and can be easily installed in small spaces. It can even be installed outside on the wall. 

The traditional water heater requires a dedicated space within your home. It cannot be installed outside of the home. You also have to be careful about the placement because if the tank starts to leak, the hot water within can be dangerous to people. 

If you are still unsure whether a tankless or traditional water heater is best for you, consult with a retailer or plumber. You can learn additional differences of each type of heater so you can make the decision that is best for your home.