Pro #1: Space Savings
Tankless water heaters are much smaller than bulky storage models. Installers usually mount them on a wall in an inconspicuous place in the basement. In smaller homes, the space savings is a welcome benefit.
Con #1: Additional Equipment is Often Necessary
A water softener is usually necessary to ensure a tankless heater operates properly. Obviously, this extra equipment adds to the unit’s initial price tag. A softener will also negate the space-saving benefit, as the bulky softener (in addition to the necessary bags of salt) will take up space beside the wall-mounted heater. In fact, this appliance may actually take up more space than a traditional water heater.
Pro #2: Longer Lifespan
A considerable advantage of tankless units is their longer lifespan. A standard, high-quality water heater will last roughly a decade, whereas thankless models function for twice as long. Opting for the longer-lasting thankless model can save a homeowner from needing a replacement every 10 years.
Con #2: Higher Initial Cost
Their longer lifespan makes thankless units inherently more expensive. The average traditional model costs around $500, while the cheapest thankless options start at $1,000. These specialized models are also more expensive cost more to install, so labor fees must be factored into the overall price tag.
Pro #3: Special Financing and Tax Breaks
Because they are more efficient, tankless heaters qualify for federal tax credits, which help offset the steep installation cost. As of December 2016, the federal government offered a 10% tax credit on the overall cost of buying and installing a tankless hot water heater. Energy Star-certified traditional storage heaters also qualify for the same 10% tax break.
Con #3: Rerouting Gas Lines
As mentioned above, tankless water heaters require a non-traditional setup, making installation more expensive. A contractor might even be forced to reroute a gas line or add new venting, adding to the overall cost of the project.
Pro #4: Lower Month-to-Month Costs
While these systems are more expensive, they are also more efficient. In fact, Consumer Reports indicates that tankless water heaters are 22% more efficient than standard models. The monthly savings might be nominal, but homeowners can expect to save hundreds of dollars annually.
Con #4: Limited Hot Water Supply
Tankless water heaters supply a steady stream of hot water, but the supply is not unlimited. Standard models heat several gallons of water at once – perfect for a single person taking a shower or washing the dishes. But if an individual is running the dishwasher or washing machine while someone else is taking a shower (or two people are taking showers in two different bathrooms at the same time), a tankless heater is not equipped to keep up. A traditional water heater, which can store between 30 and 80 gallons depending on the model, will not have a problem providing hot water to multiple outlets at the same time.
Pro #5: Instant Hot Water
After flushing the cold water from the pipes out of the faucet, tankless water heaters can provide an unending stream of hot water almost instantly. Therefore, on a very basic level, these units can indeed deliver on their promise to supply heating without the inconvenience of bulky storage tanks.
Con #5: Inconsistent Temperatures
The Consumer Reports survey mentioned above names inconsistent water temperatures as one of the biggest buyer complaints. This issue typically results from the heater’s inability to send enough hot water to multiple outlets simultaneously. Also, tankless heaters do not always turn on if the faucet is slightly open (when shaving or rinsing a toothbrush, for example).