Are you considering a new water heater installation for your home? If so, there are two main types of water heaters: tank and tankless. Although both types perform the same function, they operate in different ways. Below we look at the difference between a tank and tankless water heaters to help you decide which is best for you. 

What Is the Difference Between Tank and Tankless Water Heaters?

Before you compare tank and tankless water heaters, you need to understand how each operates.

Tank Water Heaters

Storage tank water heaters typically have a capacity of 30 to 60 gallons, but the most common size is 50 gallons. The capacity you want depends on your household size and how much hot water you use (your plumber can help with the calculations). Tank units use natural gas, electricity, fuel oil, or propane. These tanks continuously heat water to keep a full store ready. That means you’re paying to have hot water whether you need it or not. Storage tanks can be 5 feet tall or taller and about 2 feet wide or wider. If your water heater is in the basement, you might not mind the space it takes. But if you don’t have a basement, you may have to stash it in a closet, which can be a tight fit. Due to recent federal energy regulations, a replacement storage tank may take up more space than your old one. Newer models require more insulation.

Tankless Water Heaters

As their name implies, tankless or on-demand water heaters don’t store water in a tank. Instead, they heat water as it passes through the unit, using a heat exchanger to bring it up to temperature rapidly. (They run on electricity, natural gas, or propane.) Heating water only when needed eliminates the standby energy losses you get with a storage tank. Whole-house tankless units mount on a wall, saving floor space and fitting into tight spaces. They vary in size but average about 2 feet tall and over a foot wide.

Compare Tank vs. Tankless Water Heaters


Tank Water Heater

Tankless Water Heater

Water storage Yes No
Time to heat water 20 to 60 seconds Instant
Life expectancy 6 to 13 years 18 to 22 years
Average annual energy cost $580 $535
Payback 6 to 10 years 12 to 20 years
Average size Height: 50 to 76 inches Diameter: 18 to 21 inches Height: 18 inches Width: 17 inches


If you choose the right capacity for your storage tank water heater, you should not run out of hot water. This is one reason the storage tank outshines the tankless water heater. If you often run the dishwasher and washing machine at the same time, a tankless water heater might struggle to keep up with demand. However, this can be resolved by installing more than one tankless water heater to keep up with your household demands or installing a point-of-use model where the water is being used. Use the calculators linked above to determine your needs, which can help determine the right size water heater for your home.

Energy Efficiency

Tankless water heaters are an attractive alternative to storage tank water heaters for their energy efficiency. Standby heat loss is a big factor in higher energy costs and efficiency in storage tank water heaters, though purchasing an insulated unit can reduce heat loss. The US Department of Energy estimates tankless water heaters are 8 to 34% more efficient to run than storage water heaters.

Life of the Unit

When considering the life expectancy of each type of water heater, tankless heaters are expected to last longer. Estimates give storage tank water heaters about 10 to 15 years per unit, while tankless can last for 20 years or more. One way to extend a storage water heater’s life is to replace the anode rods, a component that helps slow rust and corrosion. The frequency depends on the type of heater and if there is hard or soft water in the home. 

Schedule Water Heater Installation in Ellicott City, Maryland.

Is your old water heater getting ready to stop for good? If so, now is the time to take advantage of the benefits and features of a new tank or tankless water heater. Reliability Home Services offers professional water heater installation in Ellicott City, Maryland. Contact us today to get an estimate on a brand-new HVAC for your home.