How Each System Works
Conventional water heaters store a large volume of hot water (typically 30 to 50 gallons) in an insulated tank. The system maintains this water at a set temperature around the clock, ensuring hot water is available when you turn on a tap. The downside is that energy is used continuously—even when no one is home or using hot water.
Tankless water heaters, on the other hand, heat water only when it’s needed. Also known as “on-demand” systems, they instantly warm incoming water as it flows through a heat exchanger, eliminating the need for storage and reducing standby energy loss.
The choice between these systems largely depends on how much hot water your household uses, how often you use it, and your long-term energy savings goals.
Energy Efficiency and Cost Savings
Tankless water heaters are widely praised for their energy efficiency. Because they don’t have to keep water hot 24/7, they consume less energy overall—especially in homes that use moderate amounts of hot water. According to the U.S. Department of Energy, homes that use 41 gallons or less of hot water daily can see up to 34% greater efficiency from a tankless unit compared to a standard storage tank.
Even in higher-use households, tankless units still offer energy savings, though the difference may be smaller. These savings often translate to lower monthly utility bills, which can help offset the higher upfront cost of installation over time.
Conventional water heaters are less efficient, primarily due to heat loss from the storage tank (known as “standby loss”). However, they tend to be less expensive to purchase and install, making them a popular choice for homeowners with tighter budgets or shorter-term housing plans.
Hot Water Availability and Flow Rate
With a traditional tank system, once you’ve used all the stored hot water, you’ll need to wait for the tank to refill and reheat—which can be inconvenient during peak usage times, like morning showers or holiday gatherings.
Tankless water heaters eliminate this issue by providing a continuous supply of hot water—ideal for families who frequently run multiple appliances or showers at once. However, tankless systems do have flow rate limitations. If multiple taps or appliances are demanding hot water at the same time, you may experience a drop in performance unless the unit is properly sized or multiple units are installed.
For larger homes, a tankless system may require careful planning to ensure consistent water delivery throughout the house.
Lifespan and Maintenance
One of the key benefits of tankless water heaters is their longevity. On average, a tankless unit can last 20 years or more with proper maintenance. Conventional water heaters typically last 10 to 15 years, depending on usage and upkeep.
Tankless systems also require less frequent replacement, though they do need periodic descaling (especially in areas with hard water) to maintain performance. Conventional tanks are more susceptible to sediment buildup, which can reduce efficiency and increase wear on the unit.
Routine maintenance—like flushing the tank or descaling the heat exchanger—is essential for either system and can extend the life of the equipment.
Installation Costs and Considerations
The initial cost of a tankless water heater is typically higher than that of a conventional model. In addition to the unit itself, installation may involve upgrades to your home’s electrical system or gas lines, especially if you’re replacing a tank with a tankless model for the first time.
On the other hand, tank-style heaters are generally easier and less expensive to install, particularly if you’re simply replacing an old unit with a similar model. For homeowners on a tight budget or those not planning to stay in their home long-term, a conventional system might make more sense financially.
However, the long-term energy savings, space-saving design, and longer lifespan of tankless units can make the upfront investment worthwhile—especially in newer homes or high-efficiency remodels.
Environmental Impact
If reducing your carbon footprint is a priority, tankless water heaters have the edge. They consume less energy overall, produce fewer greenhouse gas emissions, and often qualify for rebates or incentives from local utility companies or energy-efficiency programs.
Conventional models, while still improving in efficiency, rely on constant heating and generally consume more resources over their lifetime.
Which One Is Right for Your Home?
Choosing between a tankless and conventional water heater comes down to your home’s size, water usage habits, long-term plans, and budget. If you value continuous hot water, energy savings, and a longer lifespan—and you’re willing to invest more upfront—a tankless unit may be the right fit. If you prefer a lower initial cost and have more predictable hot water needs, a conventional model might be more practical.
Let Premier Plumbing Help You Make the Right Choice
At Premier Plumbing, Inc., we help Michigan homeowners choose and install water heaters that match their unique needs. Whether you’re leaning toward a tankless upgrade or replacing your aging tank-style unit, our experienced team can walk you through the pros, cons, and costs of each option.
Contact Premier Plumbing today to schedule a consultation and get expert advice on the best water heater for your home—backed by quality service and trusted local experience.