How is a tankless water heater different from a tank?
A tankless water heater heats water only while hot water is running, instead of keeping a tank of it hot all day. Open a hot tap or start the dishwasher, and water runs through a heat exchanger. A gas burner or electric elements heat it on the way past. Close the tap and the unit shuts off. A trickle may not be enough to turn it on.
A tank heater stores a set amount, often 40 or 50 gallons, and keeps it hot whether anyone is using it or not.
Nearly every tradeoff between them comes back to that.
Which one runs out of hot water?
The tank does. Once its stored hot water is used up, you wait while it reheats.
A tankless unit never runs dry, but it can only heat so many gallons per minute. Run 2 showers and the dishwasher at once, and a unit that's too small can't keep up. Somebody gets lukewarm water.
So tankless units get sized on 2 numbers: how much hot water you pull at once, and how many degrees the unit has to raise it. Incoming water is colder in winter, so a unit that keeps up in July can fall short in January.
We'd size it for a January morning, not a July one.
Which costs more to install?
Tankless usually does. A tank is the simpler job, especially in the same spot as the old one.
A gas tankless unit burns a lot of gas while it's running, so it can need a larger gas line. That depends on the unit, the pipe run and your other gas appliances. It also needs its own vent, usually a new one. If your old tank shared a vent with a gas furnace, that vent may need changes too.
A whole-house electric tankless unit pulls a lot of power and can need new circuits or a panel upgrade. That's electrical work. It's done by licensed and insured techs, and the same call covers it.
How much more depends on your house, so we won't guess at a number.
Which costs less to run?
Against a standard gas or electric tank, tankless usually does. There's no tank losing heat while nobody's using it (standby loss). The gap is bigger in households that use less hot water.
If your home is all-electric, look at a heat pump water heater too. It's a tank that pulls heat from the surrounding air. The Department of Energy says it can be 2 to 3 times as efficient as a standard electric tank.
The savings take time to pay back the higher install cost, so how long you'll stay matters. Nobody can give you an honest payback number without knowing how you use hot water.
How long does each last, and what upkeep do they need?
A tank often lasts 8 to 12 years, sometimes more, and does better with an occasional flush. A tankless unit can last longer, but only if it's descaled on schedule.
A flush clears the sediment that settles in the bottom of a tank. Descaling clears mineral scale out of a tankless unit's heat exchanger, and the inlet filter gets cleaned too. Follow the schedule in the manual, and do it more often if your water is hard.
Skip it and the scale keeps building, which shortens the unit's life and hurts how it runs. If you know you won't keep up with descaling, that's a point for the tank.
Does space or location matter?
Yes, and sometimes it decides the whole thing. A tankless unit mounts on a wall and frees up the floor space a tank takes. An indoor gas tankless unit still needs its own vent to the outside, which limits where it can go. Outdoor models skip the vent run but rely on power to keep from freezing.
A tank needs floor space. Where a leak could cause damage, like in an attic or over a finished room, it also needs a drain pan underneath. Either type needs clear room in front of it for service.
Which one fits my household?
If your current tank keeps up, another tank usually makes the most sense. It's the lower install price and the simpler job.
Tankless earns its price when you keep running out of hot water or need the floor space.
Whatever you pick, decide before the old tank fails. When a tank quits, you mostly want hot water back, and a straight tank swap is usually the quicker job. That's not the moment to be weighing gas line sizes.
If you're still torn, we'll come look and ask how many showers run back to back at your house. Sometimes the answer is another tank, and we'll tell you so.