I would like to upgrade my current water heater with one that

  • Is able to produce/store more heated water so I won't run out
  • Energy efficient
  • Inexpensive

What are the advantages/disadvantages to each different kind? What would you recommend and why?

4 Answers 4


When most people think of a water heating system, they think of a tank (40-75 gal. on average) with a heating source. However, a robust water heating system probably shouldn't be so simple. How you want to configure things depends on what your exact situation is, and what features you want maximized. Some examples:

2 tank, parallel This kind of setup gives you the storage capacity of both tanks (say, 2 x 40gal = 80gal). But it also costs twice as much to keep running. I can't imagine why you would do this over the next idea, but I'm sure someone has a reason.

2 tank, serial This gives you a lot of versatility in water availability and cost. In low demand situations, turn the first tank down or off. Storing the water will let it come up to room temperature, usually reducing the heating requirements in the second tank. Set tank 2 for your desired temperature. When demand increases (say, relatives visit for a week) turn the first tank up to boost the inflow temperature. Ultimately, both tanks at the desired output temperature will give you slightly more hot water than the capacity of both tanks combined; due to heating as water flows.

Tankless As mentioned by others, a simple tankless heater has hidden drawbacks in demand-based activation and flow restrictions. However, the do not heat any water unless on, so their standby energy cost is nil. Installation can be tricky: they require costly ventilation and exhaust systems which can make them not cost-effective over their projected lifespan. And they are difficult to tie into hot water recycling systems, if you're looking for instant-hot water at the tap.

Tank + Tankless You're getting into the area of boilers, and options for combining things do very different things. A pre-warm tank can improve the flow rate of a tankless heater, by reducing the required temperature rise. A post-heat tank can alleviate the demand-based problems, but adds the cost of continual heating and complexity in cycling cooling water from the tank.

Other As I mentioned there are thousands of potential ways to combine systems. Gas is cheaper than electric. Tankless doesn't have standby costs. Tanks smooth out warm water flow. You have to determine your situation, and what works best.

Suggestion It may be against the TOS to talk brands, if so someone remove this or let me know. Since we're building a house this summer I've been looking into this problem, and our contractor pointed out the Eternal brand of tankless water heaters. They have a 2 gallon internal tank that they keep warm, which supposedly fixes the problems of demand-based activation and still costs very little for standby heat. They integrate well with recirculation systems, and can even be combined in multi-unit setups if demand exceeds one unit. I've not yet played with it (still building) but the concept looks great on paper. Oh, and they have less expensive exhaust requirements as well.

  • What about microwave heating system? Is that the same as tankless? Commented Jul 22, 2010 at 2:43
  • I hadn't heard of microwave water heaters, but it sounds like a power source so it would be in the electric/gas decision. Some Googling shows this is the invention of a company named Pulsar, not sure if it's for sale, yet.
    – Scivitri
    Commented Jul 22, 2010 at 9:27
  • 2
    Another optional component that's gaining popularity is solar panels. These function as a pre-heating tank, taking advantage of solar power to reduce the work load of the final heating solution. They always need a second heater behind them, in case the sun isn't doing well today. (clouds, snow, etc.)
    – Scivitri
    Commented Jul 22, 2010 at 9:28
  • 1
    Just a point on the tankless, there are electric models that do not require any ventilation. The don't generally heat as much water as the gas models, but I have a 9Kv model that does a decent job for the whole house. I am probably going to get an aux unit for showers though.
    – BlackICE
    Commented Dec 10, 2010 at 16:12
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    I have a friend who has a geothermal heat pump that somehow ties into a water tank that feeds another tank in serial. Of course, the geothermal isn't used just to heat water, but you get the idea.
    – Tim Reddy
    Commented Sep 17, 2011 at 16:48

I have a tankless heater, and I love it for the efficiency (energy and space wise) and of course the endless hot water. But there are some drawbacks:

  1. There is a minimum flow rate required for it to "fire up". That flow rate is high enough that you won't get hot water out of a faucet unless it's turned all the way over to "hot" and on full blast. In general, getting hot/warm water out of faucets is just a pain in the butt. This may be solved with newer models, but something to look out for.

  2. There is a limited flow rate. So, if you're taking a nice hot shower and the washing machine kicks on, you could be in for a blast of cold water and a sudden drop in water pressure. Make sure the unit is sized appropriately for the number of hot-water using items you plan to use at any given time.

  • Great answer! Exactly the type of information I'd be interested in Commented Jul 21, 2010 at 19:56
  • I have a tankless heater and my experience is pretty much the same. I find that the water doesn't really get "hot" unless I open the faucet up all the way hot. With the hot valve open halfway and the cold valve closed, it get lukewarm water.
    – bengineerd
    Commented Jul 22, 2010 at 0:08
  • I spent about 6 months in Singapore last year, where almost all domiciles and hotels use tankless heaters controlled by a switch on the wall outside the bathroom. The cool thing about that setup is that each bathroom has its own heater. Kitchen may or may not, depending on the setting. The washing machines typically have their own heater unit for incoming water, so there's only one line-in and one out
    – warren
    Commented Jul 28, 2010 at 19:27
  • Another important thing to watch for is that the larger tankless heaters are predominately (all?) gas rather than electric. You should check the BTU rating of the heater vs. your interior gas supply pipes and even against the supply from your gas company to make sure that there's enough gas to support all existing gas appliances and the new heater.
    – jlpp
    Commented Aug 19, 2010 at 22:49

Old question, but this is how I'd rank water heating options:

  1. Solar hot water
  2. Heat pump water heater
  3. Natural gas tanked & tankless
  4. Electric tanked
  5. Propane tankless
  6. Electric tankless
  7. Propane tanked

There is, of course, some play in these numbers. If you live in Seattle, for example, solar hot water may not be an incredibly viable option. Also, tankless is usually a huge PITA if it's a retrofit (typically requires the electric/gas service to be upgraded to handle more amps/gas flow,) but if it's installed with the house, it's a viable option.

Tankless benefits include: no standby losses, more compact, endless hot water

Standy losses are different for each type of fuel source. With an NG tank, standby losses are significant, but not expensive. With an electric tank, standby losses are insignificant. With a propane tank, standby losses are both significant and expensive.

We pretty much never run out of hot water, so the "endless hot water" stuff doesn't really concern me. YMMV. It's pretty darn hard to run out of hot water unless your water heater is broken or you do laundry right before you hop in the shower.

Tankless drawbacks include: typically require an upgrade to the electric/gas service (thousands of dollars), require a water softener in almost areas with even slightly hard water, scale build-up impacts efficiency more severely

The reason I rank tankless electric below tanked electric is because it has some problems that most people aren't aware of. Once again, the standby losses that it is eliminating are minimal and, in my opinion, completely offset by the decreased efficiency caused by scale build-up. You really aren't going to be saving any money moving over to tankless electric. There is a hidden cost of using tankless electric, though, which is that it murders the electric grid, especially in cold areas where demand is already high in the morning. If everyone had tankless electric and they all took showers from 5:30AM-7:00AM, there would be a huge spike in electrical consumption, which is hard for the power plants to adjust for. (With tanked water heaters, this "spike" would be spread out from 5:30 to 8:30 -- twice as long, which means the "spike" would be more of a "bump.") Anyways, power plants can't adjust to spikes and valleys in demand. This can cause voltage to fluctuate, and when demand goes down suddenly, the supply cannot adapt very quickly, and they just end up throwing all of that electricity away, increasing their operating costs, which means the price of electricity will go up.


Note that, at least currently, tankless water heaters don't always pay for themselves in some parts of the country. Here in New England, the cold water temperature is too cold to make them worth it, though this should change soon. It also depends on if you have a gas or electric model (for both tank and tankless, gas is cheaper). Given the speed that tankless heaters have been improving, I am planning on waiting another 5 years or so, especially since I just replaced my old tank 6 months ago.

  • Can you explain why it being colder outside would make it cheaper to keep a tank of hot water in you house than a tankless unit? I think I'm missing part of the equation here.
    – acrosman
    Commented Jul 22, 2010 at 2:17
  • It's not "cold outside" so much as "environments which experience gold air temperatures tend to have colder ground water." Any water heating system has to raise the temperature of your cold water supply to your desired hot water temperature. Cold supply means longer recovery times for a tank, or more energy to raise the temperature instantly for tankless. Most tankless systems have a "don't let it out if it's not hot enough yet" valve, which causes the flow restriction if the heater can't meet demand. Heated water in a tank costs the same to keep during idle times, regardless of initial temp.
    – Scivitri
    Commented Jul 22, 2010 at 9:34
  • FYI, not just New England. Here in Northern VA, I've measured tap water (after letting it run for 5+ minutes) of ~34°F. This is particular to the area I'm in, most of the region doesn't experience this.
    – derobert
    Commented Dec 30, 2011 at 17:17

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