Storage Tank vs. Tankless Water Heaters: What’s the Difference?

Maybe you are building your first home? Or perhaps you’re remodeling your older home and are considering whether or not a tankless water heater might be right for you and your family. Considering that as much as 14% of a home’s energy budget is consumed by heating water, the one you choose will not only have a lasting impact on your quality of life but will have long-lasting implications on your wallet, as well.

How Does a Storage (Tank-Type) Water Heater Work?

Fundamentally, a water heater converts energy to heat and transfers that heat to water. It’s connected to a cold water supply pipe and has an outgoing hot water pipe—or system of pipes—that supplies heated water to faucets and appliances in a home or business. Traditional storage water heaters are usually placed in a garage or water closet, where they store and pre heat 20-100 gallons of water in a tank. Once all the hot water is used, the tank then has to be heated once again.

Traditional storage water heaters keep water hot by firing up any time the water at the heating elements falls below the set temperature. Depending on the number of people in the household, tank capacity, temperature setting, and length of delivery piping, a storage heater might run for up to five hours each day, maybe more. Because it can often draw power for over 3 hours at a time, it is considered a continuous heating appliance device according to the National Electric Code.

Traditional storage water heaters are fueled by electricity, natural gas, propane, heating oil, solar or other energy sources. With an electric water heater, a heavy electrical cable delivers energy to metal heating element(s). As you can imagine, in order to heat a large tank full of water, the heating element gets very hot. In some cases, up to 800 degrees Fahrenheit hot. This causes scaling and deposits to form on the surface of the element. Over time, “hot spots” develop and eventually, it causes the unit to lose heat considerably and then fail. When considering this type of water heater, plan on a call to the plumber every several years to replace its heating elements and every 8-12 years to replace the entire water heater.

Tankless or On-Demand Water Heaters

Tankless water heaters provide hot water only when you want it. When a hot water tap is turned on, cold water travels through a pipe into the unit and either a gas burner or an electric element heats the water. As a result, tankless water heaters deliver a constant supply of hot water on demand. You don't need to waste time and energy for a storage tank to fill up with enough hot water. They do not produce the standby energy losses associated with storage water heaters, and they never run out of hot water—assuming the water heating capacity is large enough to supply your needed hot water demands. And because hot water isn’t stored in a tank, there is also no heat loss when the water heater isn’t operating, which can save you a ton of money and a lot of worries. And let’s not forget, a more compact, wall-mounted design.

Here are four other things to keep in mind:

Usage:

Tankless hot water heaters are available in point of use or whole-house sizes. You will need to calculate how many appliances or fixtures need hot water in order to determine the best size unit for your home. If you think you will need to run the dishwasher while someone else is showering, assume a larger gallons-per-minute (GPM) demand will be in order to meet your overall hot water needs. Take into account water usage, too: A bathroom needs less water than a kitchen, a dishwasher less than a shower, and so on.

Fuel Type:

Tankless hot water heaters are available in either electric or gas (natural and propane) models. If you are considering electric, check for voltage and amperage requirements. The gas version will need some electric to operate, but venting will be the bigger issue.

Location:

If you live further north, your ground water will be colder than if you reside in the southern or western part of the country. The starting temperature of the groundwater will affect the outlet temperature based on the achieved rise in temperature.

Cost:

The initial cost of a tankless water heater is greater than that of a conventional storage water heater, but tankless water heaters will last longer and have lower operating and energy costs, which offset its higher purchase price. Most tankless water heaters have a life expectancy of more than 20 years. In contrast, storage water heaters last only 8-12 years.

Did you know?

According to the U.S. Energy Information Administration, the average American household spends about $2,024 each year on energy costs. A whopping 14% (or $280) of that amount is water heating. The Heatworks’ family of tankless electric water heaters are 99% energy efficient. That means you will get more hot water and reduce the overall cost of heating your family’s water by about 40%. That's $112 back in your pocket each year.


We often get asked if tankless water heaters have the same metal heating elements that traditional tank-type water heaters use. The answer is yes. Though they instantly heat water as it flows through the device, if you slice open any existing tankless water heater on the market, you will see the same metal heating elements. This still leaves the homeowner with murky hot water filled with impurities. 

The Heatworks’ Family of Tankless Electric Water Heaters

Here at Heatworks, we have eliminated metal heating elements all together inside our tankless electric water heaters. Instead, using our patented Ohmic Array Technology, we actually pass electrical currents through the water itself. Using graphite electrodes and electronic controls, we increase the energy state of the water molecules, so they move faster. The faster they move, the more kinetic energy they have. This causes the molecules to begin to bounce off each other; that kinetic energy turns into heat. Through direct energy transfer, your water is heated instantly, within (+/-) 1 degree Fahrenheit of the temperature setpoint. With no coils or traditional heating elements that can scale and rust over time, the water you heat and use is as pure as it gets.

For more information about Heatworks or to order one of the world's most advance water heaters, click here.