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9 Benefits Of a Tankless Water Heater

Getting hot water when you need it while also saving energy is a win-win scenario. Tankless water heaters, also known as on-demand water heaters, provide hot water only when it’s needed so they don’t cause the energy loss associated with traditional storage water heaters.

Energy consumption remains a big concern in every household today, and more people are wondering about different alternatives on how they can become “green” and save more energy.

While recycling is always a great option, most homeowners and people looking to buy a home are interested in energy-efficient homes which are economical and eco-friendly.

Related article: Dangers of tankless water heater

One such example of something you might want to consider in your home is a tankless water heater.

Energy efficiency is just one of the benefits. Keep reading to find out more.

Compact Design

One of the biggest benefits of a tankless system is its small size. Because you don’t have to worry about finding room to fit a large tank, on-demand systems have significantly more flexible placement options.

While it is nearly impossible to place a 5 ft tank water heater in a crawl space, a tankless water heater will fit with ease.

I have written a detailed article about everything you need to know when installing a water heater in a crawl space, and another article specifically looking at tankless water heaters in crawl spaces. Between the two, most of your questions should be answered!

White bathroom walls with tankless water heater

With the high price of real estate, many of us tend to live in smaller homes and tighter space means that a giant 40- or 60-gallon storage tank that’s 5 feet high and 2 feet wide isn’t exactly optimal.

A tankless water heater, on the other hand, hangs on a wall up and out of the way, providing more usable space on the ground – imagine more space freed up in your cottage, bathroom or basement.

Tankless systems come in two varieties, point of use and whole house.

Point Of Use

Point-of-use systems are designed to heat only one or two outlets. Tank-heating systems often result in some water loss due to lag time.

It takes time for the hot water to make it to the faucet you’re using, forcing you to run the water longer than necessary and wasting water every time you wait for hot water to reach your faucet.

By placing a tankless system directly next to or near the faucet it will be used for, you can significantly reduce lag time and save water.

Rheem RTEX-24 24kW 240V Electric Tankless Water Heater, Gray

View Point-Of-Use Water heaters on Amazon.

Whole house

Whole-house tankless water heaters are typically much larger and heated by gas. They lose some of the benefits of the point-of-use system since it will be likely further away from the faucet.

View Whole house water heaters on Amazon.

Energy Efficiency

Did you know that the average household in the United States uses around 60 gallons of hot water per day? That’s a lot of water, and if you have a traditional water heater, then you could spend around $600 each year just operating it. If you were to go tankless, then you could end up spending much less

Since tankless systems provide water on-demand instead of holding it at a certain temperature for extended periods of time, they experience significantly less standby heat loss.

It’s possible to save even more if you install individual point-of-use systems at each hot water outlet. However, keep in mind when installing multiple heaters that the installation cost will rise as well.

While a traditional tank water heater heats water continuously, tankless water heaters heat only as much water as needed, when it is needed.

By heating water on demand, tankless units can reduce energy use by 24 to 34 percent compared to traditional water heater tanks.

According to Energy Star, some tankless units have energy factors that are as high as 95.”

Extended Lifespan

Most tankless systems last several years longer than traditional tank heaters. While the initial cost is often higher, tankless heaters are equipped with parts that are easily maintained and interchangeable. As a result, most have a life expectancy of more than 20 years.

Tank systems, on the other hand, often only last between 10 to 15 years. The longer the lifespan of your tankless system, the more money, and energy you’ll have a chance to save.

Tankless water heaters also typically have a longer warranty.

Significant Savings & Lower Utility Bills

Rather than storing a large amount of water that must be kept to temperature until it’s needed, a tankless system’s on-demand operation offers significant energy savings.

Compared to conventional models, you could save:

  • 24-34% if you use 41 gallons or less per day.
  • 8-14% if you use about 86 gallons per day.
  • 27-50% if you install an on-demand system at each hot water outlet.

The main advantage is that they eliminate the extra cost of keeping 40 to 50 gallons of water hot in a storage tank, so you waste less energy. Since tankless water heaters use less energy, they can also lower your utility bills. ENERGY STAR® estimates that the average household can save hundreds of dollars every year by converting to a tankless unit.


Tankless water heaters can conserve almost 27 to 50 percent more energy than traditional tank models and simultaneously service every high-demand point in your home, such as the bathroom, kitchen and laundry room.

On average, the typical family can save about $100 per year with a tankless model.

Tax Credit

When replacing an old water heater with an ENERGY STAR certified water heater you qualify for a 300 $ tax credit.

Keep in mind this also applies to traditional water heaters. They just have to comply with the requirements.

However, since tankless water heaters are generally more energy efficient than regular water heaters, most of them qualify for the tax credit.

View ENERGY STAR certified water heaters on Amazon.

Requirements for the tax credit
Uniform Energy Factor (UEF) equal to or greater than 0.82 OR a thermal efficiency of at least 90%.

Durability and Dependability

If you own a traditional water heater with a tank, then it will only last for around 10-12 years. Unfortunately, this number will shrink if you live in an area that has hard or mineral-rich water.

A Tankless water heater can last up to 20 years.

If you were to invest in a tankless water heater, then you’d find that it has around double the life of a traditional water heater.

Woman taking a shower with a tankless water heater, infographics about life of a tankless water heater.jpg

Endless Supply of Hot Water

Households using a traditional tank water heater may run out of hot water because the home’s entire supply is stored in the tank.

While storage tanks are limited by the size of the tank – as you’re coldly reminded early in the morning after all your kids’ shower before you do – tankless water heaters can provide continuous hot water as long as there’s fuel or energy to heat it.

On the other hand, the heating elements in tankless units’ heat water just when it is needed, for as long as required, offering continuous hot water.

If the unit is sized properly, it can effortlessly deliver a continuous supply of water at preset temperature levels. This could be as much as 5 to 7 gallons of hot water per minute. They simply never run out of the water.

Less Maintenance

Water heater tanks generally require annual maintenance, and in some regions, they need to be serviced every six months. Alternatively, tankless water heaters require very little upkeep.


Depending on the quality of your water supply, they can sustain full function for four to five years without maintenance. Proper installation and maintenance of your demand water heater can optimize its energy efficiency.

If you live in an area with hard water, an annual cleaning is still recommended to remove mineral build-up near the heating element. This standard maintenance is easy to perform- You can use a vinegar solution to flush the unit for 60 minutes and remove any lingering sediment.

Tankless water heaters also do not have anode rods, which means you never have to replace them!

In countries that refer to water heaters as geysers, the tankless option is known as an instant geyser.

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