Is a Tankless Water Heater Right for Your Home?

The traditional tank water heater has been a reliable workhorse in homes for decades. But in recent years, tankless water heater have emerged as a more energy-efficient alternative. These on-demand heaters deliver hot water instantly, eliminating the need for a bulky storage tank.  While they offer potential benefits, tankless water heaters aren’t a one-size-fits-all solution. So, before you jump on the tankless bandwagon, it’s crucial to understand if it aligns with your home’s needs and lifestyle.

This blog post will equip you with the knowledge to make an informed decision. We’ll delve into the factors that influence the suitability of a tankless water heater for your home, including:

  • Hot Water Usage: Understanding your hot water consumption is the cornerstone of this decision.
  • Home Size and Number of Occupants: The size and occupancy of your home directly impact your hot water demands.
  • Fuel Source and Availability: Tankless heaters come in gas and electric models, and fuel availability plays a role.
  • Budget: Tankless heaters generally have a higher upfront cost, but potential energy savings can offset that.
  • Desired Features and Considerations: Think about your hot water needs for showers, appliances, and future plans.


By considering these aspects, you’ll be well-positioned to assess if a tankless water heater is the right fit for your home.

Hot Water Usage: The Linchpin of Your Decision

Before diving into specifics, it’s essential to understand your hot water usage patterns. Here’s why:

  • Tankless water heater deliver hot water instantly but at a limited flow rate. This means multiple simultaneous hot water demands, like showers and laundry running together, can overwhelm the system.
  • Traditional tank heaters have a reserve of hot water. If you have occasional spikes in hot water use, a tank heater can compensate until it reheats.

To gauge your hot water usage, consider:

  • Number of showers per day and their duration. Long, luxurious showers typically consume more hot water.
  • Frequency of dishwasher and washing machine usage. These appliances use hot water for cleaning cycles.
  • Number of bathrooms and their proximity to each other. Widely spaced bathrooms might require a larger capacity heater for simultaneous use.

Here’s a rough estimate of daily hot water usage per person:

  • Low usage: 20-30 gallons
  • Moderate usage: 40-60 gallons
  • High usage: 60+ gallons

A helpful tip: Monitor your hot water usage for a few days to get a more accurate picture of your needs. You can use a water meter specifically designed for hot water lines.

Home Size and Number of Occupants: Fueling the Demand

The size of your home and the number of people living there directly translate to hot water demand. Here’s how these factors play a role:

  • Larger homes with multiple bathrooms will naturally require a higher hot water capacity. A tankless heater might struggle to keep up with simultaneous demands if not sized appropriately.
  • More occupants translate to more frequent hot water usage. Tankless heaters can handle this efficiently as long as the demands aren’t concentrated within short timeframes.

Finding the Right Capacity:

Tankless water heaters are rated in gallons per minute (GPM). This indicates the maximum flow rate of hot water the heater can deliver at a specific temperature rise.  To determine the ideal GPM for your needs, consider:

  • The number of hot water fixtures you have (faucets, showerheads).
  • The desired flow rate for your showers and faucets.


For example, a low-flow showerhead might require 2.0 GPM, while a high-pressure model might need 3.0 GPM or more. Consult your plumber or the manufacturer’s specifications to determine the appropriate GPM for your fixtures.

Here’s a general guideline for GPM based on household size:

  • 1-2 occupants: 3.0-4.0 GPM
  • 3-4 occupants: 4.0-5.0 GPM
  • 5+ occupants: 5.0+ GPM


Remember, these are just estimates.  Always factor in your specific hot water usage habits and desired flow rates.

Fuel Source and Availability: Gas vs. Electric

  • Availability of fuel source: Not all areas have access to natural gas. If your area relies solely on electricity, an electric tankless heater might be your only option.
  • Vent pipe requirements: Gas-powered tankless heaters require venting to expel combustion gases. Electric models typically don’t need venting, but they may require thicker electrical wiring to handle the increased load.

Gas-powered tankless water heaters:

  • Pros: Generally more affordable to operate due to lower natural gas costs in most areas. Can deliver higher flow rates compared to electric models, making them suitable for larger homes or high hot water demands.
  • Cons: Requires venting for combustion gases, which can add to installation complexity. May have higher upfront costs compared to electric models.

Electric tankless water heaters:

  • Pros: Generally easier to install as they don’t require venting. May be the only option in areas without natural gas access.
  • Cons: Operating costs can be higher due to electricity prices. May have lower flow rates compared to gas models, potentially limiting their suitability for large homes or high hot water demands. Upfront costs can be comparable to gas models.

Important Note: Regardless of the fuel source you choose, ensure your electrical panel or gas line can handle the additional load of a tankless heater. Consulting a qualified plumber or electrician is crucial during the planning stage.

Weighing Upfront Costs vs. Long-Term Savings

Tankless water heaters generally have a higher upfront cost compared to traditional tank water heaters.  This is due to the more complex technology involved in delivering hot water on demand.  However, tankless heaters offer potential long-term savings on energy bills due to their efficiency.

Here's a breakdown of the costs to consider:

  • Upfront Costs: Tankless water heaters can range from $2,500 to $5,000 or more, depending on the size, capacity, and brand. Installation costs can add another $1,000 to $3,500, depending on the complexity of the job.
  • Long-Term Savings: Tankless water heaters only heat water when needed, unlike traditional tank heaters that constantly maintain a reserve of hot water. This can lead to significant energy savings, especially in households with moderate to low hot water usage.

Here’s a crucial point to remember:  The payback period for the upfront cost of a tankless heater varies depending on your energy costs, hot water usage patterns, and the efficiency difference between your old and new water heater.  For some homeowners, it can take several years to recoup the initial investment.

Desired Features and Considerations: Planning for the Future

Before making a final decision, consider some additional factors that might influence your choice:

  • Desired hot water temperature: Tankless heaters can deliver consistent hot water temperatures, unlike traditional tank heaters where the temperature can fluctuate as the reserve depletes.
  • Future plans: If you anticipate adding bathrooms or occupants to your home in the future, you might need a larger capacity tankless heater to accommodate the increased demand.
  • Environmental impact: Tankless heaters generally have a lower environmental impact compared to traditional tank heaters as they don’t waste energy constantly heating a reserve of water.

Making the Right Choice: Traditional Tank vs. Tankless

Here’s a quick comparison to summarize the key points:

Traditional Tank Water Heaters

  • Pros: Lower upfront cost, readily available, can handle sudden spikes in hot water demand.
  • Cons: Less energy efficient, constantly heats water even when not in use, limited lifespan (around 10-12 years).

Tankless Water Heaters

  • Pros: Highly energy efficient, delivers hot water on demand, potentially longer lifespan (up to 20 years with proper maintenance).
  • Cons: Higher upfront cost, may not be suitable for large homes or high hot water demands, requires planning for installation (fuel source, venting).


A tankless water heater can be a great investment for your home, especially if you have moderate hot water usage and prioritize energy efficiency. However, it’s crucial to carefully consider your hot water needs, home size, budget, and fuel availability before making the switch.  By carefully evaluating these factors and consulting with a qualified plumber, you can determine if a tankless water heater is the right fit for your home, providing a continuous flow of hot water for years to come.