If you’ve ever run out of hot water mid-shower, you might be wondering if there’s a better way. Enter the tankless water heater—often called a "hot water on demand" or an "insta hot system". Unlike traditional water heaters that store and hold a full tank of water at a steady temperature, tankless units heat water only when needed. This lowers energy usage while providing an endless hot water supply and offers potential savings on power bills.

What is a tankless water heater (and how does it work)?

A tankless water heater heats water as it flows through the unit. It exists without a storage tank. When you turn on a hot water tap, cold water moves through a heat exchanger, where it is quickly warmed using a gas or electric element. This process delivers hot water on demand, ensuring you never run out—so long as your system can keep up with the flow of water.

Because these systems only heats water when necessary, they tend to be more efficient with less energy waste than traditional storage water heaters, which contend with standby heat loss and associated energy costs.

Pros and Cons of Upgrading to a Tankless Water Heater

Pros

• Energy Efficiency: Tankless models only warm water when needed, reducing standby energy losses, reducing energy bills, and giving more control to eco-conscious homeowners. The initial cost of the upgrade may also be offset with a tax credit or rebate offer.
• Endless Supply: A household with a high hot water consumption no longer waits for the tank to refill. As long as your system is properly sized, you'll have on demand hot water delivery.
• Space-Saving: Their compact size allows them to be mounted on a wall in a closet or under a sink which frees up floor space that a 50 gallon tank otherwise occupies.
• Longer Lifespan: Tankless water heaters last around 20 years with proper maintenance, compared to 10-15 years for traditional tanks.
• Reduced Risk of Water Damage: Without a large water tank, there’s less risk of leaks or catastrophic flooding.

Cons

• Higher Upfront Costs: Tankless units and the professional installation costs may be worth it for a new build but to convert from a standard water heater can be complicated, making the initial investment significantly more expensive. If you're going to do it, you might want to wait for your current system to fail, then treat yourself with the upgrade.
• Complex Installation: Depending on your home’s existing setup, you may need to upgrade your gas line or electrical system to support a tankless unit.
• Limited Output: They turn on based on flow rate so a tankless unit may struggle to supply multiple hot water needs at once (e.g., a shower and a dishwasher running simultaneously). Investing in a model with higher gallons per minute (GPM) will help.
• Climates: In colder climates, the incoming water temperature will be lower and take longer to heat, which can slightly reduce efficiency.
• Maintenance Requirements: Hard water can cause mineral buildup, requiring periodic descaling and regular maintenance to keep the unit running efficiently.

Is a Tankless Water Heater Worth It for Your Home?

We think so. A tankless water heater can cost between $800 and $3,000, including installation, while the average cost of a traditional tank heaters is $1000. The price will vary based on size, flow rate, and whether it is an electric model or a gas unit. Remember to consider energy savings — A tankless system’s efficiency can give you $50 to $100 annual savings on energy bills, helping paying for itself over time. Given the longer lifespan, the long-term savings could make the upfront investment worthwhile.

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FAQ

How long does it take to get hot water from a tankless system?

Tankless water heaters provide hot water almost instantly and in an unlimited supply, but there can still be a slight delay depending on how far the unit is from your tap. For example, our shower is the furthest plumbing from the tankless system; it takes about 45 seconds to flush the cold water out of the pipes and produce hot water. If you're feeling like it takes a long time for hot water to reach fixtures, a recirculation pump can help speed things up.

Will a tankless water heater increase my home’s value?

Yes, installing a tankless water heater can make your home more attractive to buyers. While it may not drastically boost resale value, energy savings and electric unit upgrades can be a selling point in competitive markets. Weigh the initial expense to convert a conventional water heater to a tankless unit along with how long you'll stay in the house and benefit from the energy conservation yourself.

Do tankless water heaters work during a power outage?

Electric models will obviously stop working during an outage, but most gas units require electricity to ignite the heating element. Therefore, either hot water heater will need a backup generator or a battery-powered ignition model if power outages are a common occurrence.