Are Tankless Water Heaters Worth It?

A water heater is an essential part of a home. However, the type of water heater that works best for your needs depends on various factors, including your climate, access to gas and electricity, local utility rates, and the cost of the water heater.

Here are the most common water heaters you'll encounter if you're looking for a new one.

Tankless Water Heaters

Many homeowners replace their storage tank water heaters with tankless heaters because they provide on-demand hot water without high energy bills. Unlike large, bulky storage tanks that take up space in the garage or basement, tankless units are small boxes mounted on the wall and connected to plumbing pipes. When you turn on your hot water, the tank heats the water, sending it to the desired location. Because water is only heated on-demand, tankless heaters provide significant yearly energy savings, as well as an eco-friendly home environment.

The main downside of tankless water heaters is the upfront costs. On average, a tankless heater costs from $450 - $2,500 to purchase, then another $800 to $1,500 to install. Units come in electric and gas models, so you must consider local utility rates. Electric heaters are a little less expensive to buy and install since every home has electricity. Gas heaters cost about twice as much as electric heaters up front, and you must have a gas line running to your home. However, gas heaters save money in the long run because the cost of gas is cheaper than electricity in most areas.

Although upfront costs are higher, tankless heaters have a long lifespan. Gas models last for about 20 years, while electric models last about 10 years. Regular maintenance is required to clean or change air and water filters and check the burners.

Storage Tank Water Heaters

The most common and least expensive type of water heater is the storage tank. On average, storage tank heaters costs from $400 - $1,600 to purchase, then another $150 - $600 to install. Insulated tanks can heat and store up to 50 gallons of water until you need it. Storage tank heaters come with different size tanks available in electric, gas, and propane models.

The tank size impacts daily hot water usage, so it's important to consider your family's size, daily household tasks, and hygiene routines. If your tank is too small, you're likely to run out of hot water. If your tank is too large, you're paying higher energy costs for water you don't use.

While upfront costs are relatively low, storage tank heaters only last for 8-12 years. Regular maintenance is required because sediment often accumulates in the tank and prevents water flow.

Solar-Powered Water Heaters

Solar-powered water heaters are powered by the sun. On average, solar-powered heaters costs from $1,000 - $6,000 to purchase, then another $2,000 - $4,000 to install. Units can be completely powered by solar panels or combined with a solar thermal hot water system or a tankless system. Typically, small households require 1 panel when using flat solar panels, and large households require 2 panels.

When considering a solar-powered water heater, your climate is important. If you live in a sunny location with minimal rain and snow, a solar-powered heater may be a good option. However, it does require a backup unit to compensate for cool, cloudy days, rain and snow, and power outages. As the most energy-efficient water heating system, solar-powered water heaters last about 20 years.

Before purchasing a hot water heater for your home, think about your water needs and compare the pros and cons of systems before making a final choice. While some heaters offer cheaper upfront costs, others offer greater energy efficiency and lower bills.

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