In Repair & Maintenance

Review of Tankless Water Heaters: Massive Benefits and Secret Problems

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If you look at tankless water heater pros and cons, you’ll notice that tankless water heaters are more efficient and provide endless hot water but they are only useful in particular situations. The pros are great since most homeowners are looking for ways to lower their electrical bill or save water.

If it isn’t the health of the planet that drives this desire, it’s the utility bill coming out of their wallets. However, the cons could prevent you from installing this new technology in your own home.

How Does a Tankless Water Heater Work

Tankless water heaters are designed to provide an endless flow of hot water on demand. A tankless water heater starts to produce hot water when a hot water tap is turned on. The entire process of producing hot water takes a matter of seconds, which is a huge pro to the tankless water heater.

How does a tankless water heater work
  1. Hot water tap is turned on and water is pulled through the system
  2. Flow control valve signals the control board to turn the heater on
  3. Heater will heat up the heat exchange grid (a network of thin metal that is next to the water pipes inside the tankless water heater)
  4. Water heats up as it flows next to the grid
  5. Hot water passes the exchange valve which adds some cold water back it to temper the heat
  6. Hot water flows out of the fixture

Tankless Water Heater Pros

There are several amazing pros to a tankless water heater. This is why they are becoming more popular and the envy of all “green” builders. But what do these pros amount to?

Water is only heated as needed in a tankless water heater. Making it much more energy efficient than a traditional water heater.

Energy Efficient

The most important tankless water heater pro is the energy efficiency. Because a tankless water heater does not keep an entire tank of water heated at all times, there is far less energy required to produce the same amount of hot water.

This is because hot water is heated almost instantly ONLY when hot water is requested. This is vastly different from a traditional tank water heater that keeps up to 80 gallons of water at a heated temperature at all times.

Less Space Needed

Every homeowner wants more space in their garage. Another huge tankless water heater pro is that it takes up a fraction of the space in the garage. A traditional tank water heater takes up a space that is roughly 3 feet deep, 3 feet wide, and 5 feet tall.

In contrast, a tankless water heater hangs on the wall and takes up a space that is 12 inches deep, 2 feet wide, and 3 feet tall. That is a tremendous space savings and it frees up valuable floor space.

size difference between traditional vs tankless water heater

Endless Hot Water

At some point, everybody ends up taking a cold shower because all of the hot water has been used up. A tankless water heater pro is that it provides an endless supply of hot water. This is because it heats the water on demand within seconds so that hot water is provided to exactly match the required need.

Tax Incentives and Financing

As if there weren’t enough tankless water heater pros, you can also find special financing programs and tax incentives that you are eligible for once you invest in a tankless water heater. 

For tax incentives, you’ll want to check out the Energy Star website for easy to read information. But for financing, check with your local utility company to see if they have any energy efficient financing programs with rebates or savings that you may not have known about.

Tankless Water Heater Cons

tankless water heater cons

So why isn’t everybody getting a tankless water heater? There are some significant tankless water heater cons that you need to consider before jumping in and making the switch immediately.

High Initial Price

An important tankless water heater con is the high initial price. While these units are coming down in price, they are still much more expensive than the traditional tank water heaters when you first buy them. This higher initial price could keep some people from making the change because it’s harder to afford.

Limited Hot Water Supply

The tankless water heater has a limited hot water supply. Wait, what? But earlier it was unlimited. While a tankless water heater does provide unlimited hot water, it can only heat water as fast as it flows through the water heater.

For example, if you turn on the dishwasher, clothes washer, and the shower at the same time, a tankless water heater may have trouble keeping up because you’re demanding more hot water than the amount of water that can flow through it.

Anybody looking at getting a tankless water heater needs to consider how often they have high levels of hot water demand. If it’s frequent, a traditional water heater (with its already heated 40-80 gallons of water) may be a better option since it isn’t limited by the flow of water into the tank.

The inability to run many appliances at one time is why many people feel that gas tankless water heaters are better than electric tankless water heaters. Gas tankless units have a higher flow rate typically, which means they can heat more water per minute than electric units.

Power Outages

linesman repairing power line

For people who live in more rural areas, you should consider how often your home has a power outage, especially if you are going to get an electric tankless water heater.

If you have a traditional water heater and the power goes out, you have some time before your water is no longer hot since the water heater tank will retain some heat.

However, a tankless water heater will not have an already heated tank of water. An electric tankless water heater cannot heat any hot water without power. This means that within minutes of the electricity going out, you will have no hot water until it is turned back on. Whether that is minutes or weeks, it won’t matter.

Does not Work Well at a Trickle

A tankless water heater con you may not have considered is that a tankless unit will not produce hot water well if you are using water at a trickle. In other words, the people who fill up the whole sink with water to do dishes are fine. But if you like to just turn your sink faucet on low, the water will never really be hot.

What to Consider Before Installing a Tankless Water Heater

Now that you know the basic tankless water heater pros and cons, there are still a few things to keep in mind before installing a tankless water heater. If you think through both of them, you should be able to choose the right tankless unit for your home and family.

Water Use Pattern

How your family uses water, and in what pattern, is the most important factor to consider before installing a tankless water heater.

Back to the family that turns on the dishwasher, clothes washer, and shower at the same time…that results in periods of low demand (when nothing is on) and periods of very high demand (when everything is on). This is not an optimal environment for a tankless water heater.

If however, you are a family with several children and they all shower in the evenings, you need to make sure that the last child still has hot water or you’re going to have a war on your hands. 

As long as you aren’t planning on running a bunch of appliances at the same time, this creates a long period of moderate demand. This is the perfect environment for a tankless water heater to shine.


Geographic location could also change your decision on buying a tankless water heater. The colder the climate you live in, the harder it is for your tankless unit to heat water up enough to meet demand. For mildly cold climates, gas or electric tankless water heaters can do just fine.

For people in moderately cold climates like the northern United States, you may want to consider a gas tankless water heater because their higher flow rate can help them heat enough water for most people.

Somebody in a severely cold climate, such as Canada or Alaska, may not want a tankless water heater unless they have an insulated area to keep it in or a backup traditional water heater for the winter.

How do you Calculate the Size of a Tankless Water Heater

There are some incredibly complicated calculations that you can use to determine what size tankless water heater you need.

Most Accurate Method to Determine Tankless Water Heater Size

equation to determine the size of tankless water heater required

First, figure out how many BTUs per gallon you need. This depends on how cold your ground water is, which is determined by where you live. It basically is how much heat it takes to heat your water up to useable temperature.

Second, calculate the maximum gallons/minute that will be demanded of your water heater. So, when you have everything (shower, dishwasher, etc) turned on that is using hot water, how many gallons are flowing per minute. You multiply this by .8 and put it in the center top of the formula.

Third, multiply by 60 minutes.

Multiply everything on the top of the formula together and put the total on the top.

Finally, divide the top total by the Uniform Energy Factor (UEF) of the water heater, which should be listed on the water heater.

Easiest Method to Determine Tankless Water Heater Size

Easy method to determine the size of tankless water heater needed

Single person/One bathroom/Low demand requires 150,000 BTUs

Small family/Two bathrooms/Moderate demand requires 200,000 BTUs

Large family/Multiple bathrooms/High demand requires 400,000 BTUs

If your situation moves you to the next level up in demand in 2 out of 3 categories, just size up and play it safe. You only want to install the water heater once.

How are Propane Tankless Water Heaters Different than Electric Tankless Water Heaters

Propane and electric tankless water heaters both operate very similarly. The major difference is that one of them has a heater powered by gas (propane) and one of them has a heater powered by electricity.

In terms of their usage and their effectiveness as a water heater, gas water heaters are seen as a better option because of their higher flow rate. They can tolerate a higher demand so there are fewer complaints that the tankless water heater isn’t keeping up.

How Much does it Cost to Install a Tankless Water Heater

calculating cost

Plan on spending between $1,000 and $4,000 to install a tankless water heater. However…

The cost to install a tankless water heater is HIGHLY variable depending on the area you live as well as the general construction pricing at the time. For example, the inflation from 2021-2022 resulted in a large increase in labor and material prices for jobs such as installing tankless water heaters.

To accurately estimate the cost to install a tankless water heater, get bids from at least 3 local contractors. Most will do bids for free. Make sure that you get at least 3 bids so that you get a low, medium, and high estimate for the job. Just make sure you ask for them to clearly lay out what is included so that you can compare similar quotes.

How do You Maintain a Tankless Water Heater

The only maintenance a tankless water heater needs on a regular basis is a flush and descaling of the internal plumbing. There are instructions on how to do this for specific models in the manuals that come with them.

Basically, once a year, you get out all of the sediment and hard water minerals that may have built up in the tubes. This makes sure that your tankless water heater continues to produce hot water at the rate it was designed for.

What’s the Lifespan of a Tankless Water Heater Compared to a Tank Water Heater

A tankless water heater will last roughly twice as long as a traditional water heater. Plan on a tankless unit lasting anywhere from 15-20 years. A traditional water heater typically only lasts about 10 years.

That’s not to say there aren’t outliers though. There are traditional water heaters from the 1980s that are still working quite nicely. And there are tankless units that give up the ghost only a few years after installation. It all depends on how well they were manufactured, installed, and maintained.

Preferred Brands of Tankless Water Heaters


Ecosmart is a company that specializes in tankless water heaters and on-demand watering needs. They have several models to choose from so that you can size your water heater correctly for your needs. Their website also has good resources for helping you figure out how to install, use, and care for your tankless water heater.


Rinnai, similar to Ecosmart, is a company that produces only tankless water heaters. They have a good reputation though. While their options are more limited than other water heater companies, there are still a few different models to choose from. The odds are good they’ll have something that works for you.


Rheem is an older water heater company that has made traditional water heaters for decades. They have now come into the new century and they are producing several models of tankless water heaters that you can choose from.

AO Smith

AO Smith is another very old water heater company that started making traditional water heaters and has now started to make tankless water heaters. They have an incredibly diverse set of options to choose from and a great reputation.


A tankless unit can make your home incredibly energy efficient in its production of hot water for your daily dishes and shower. Of course, you should make sure to look at all of the tankless water heater pros and cons laid out here to decide if it’s really the right decision for you and your family. For some people, it isn’t a good option. But for many people, a tankless water heater is a great option.