Pros & Cons of Tankless Water Heaters

by | Oct 30, 2013 | Blog, Green / Sustainability Ideas | 0 comments

Tankless Water Heaters - RE/Max of Cherry Creek

Tankless water heaters can seem like an attractive option for energy-conscious consumers. After all, instead of keeping water continually heated in a storage tank — whether or not the hot water is needed at the moment — tankless heaters fire only when hot water is demanded. But are they truly a better option?

The answer is yes…and no. Experts note that there are advantages and disadvantages to this choice. Before installing a tankless water heater, consider:


  • Many tankless units come with a federal tax rebate of $300.
  • Tankless heaters last five to 10 years longer than tank heaters.
  • Since they only use energy to heat the water needed at any given moment, they can shave as much as 20% from your water-heating bill.
  • They take up less space than tank heaters and can even be installed on walls, under cabinets or in closets.
  • Electric models don’t produce greenhouse gases.
  • They remove the risk of flooding due to a ruptured tank.


  • Savings on heating bills can be eaten up by up-front costs. Tankless water heaters cost, on average, $800-$1,500 (vs. $300-$480 for tank styles). They often require expensive retrofitting: electrical outlets for their fan and electronics; upgraded gas pipes; new ventilation systems – adding an average $1,200 for installation (vs. $300 for tank models). This means it can take up to 22 years to break even, longer than the 20-year life of many models.
  • Gas-powered units produce greenhouse gases.
  • Gas units require annual servicing to remove mineral buildup. Recommended annual maintenance includes a vinegar flush of the system for 45 minutes. Failure to do so significantly reduces the life of the equipment.
  • You can experience lag time before the water turns hot, requiring you to run the water longer and increasing water waste.
  • If you simultaneously run appliances that require hot water, the tankless heater may not be able to keep up with the demand; you may need two or more heaters to avoid this problem.


Need more sustainable home ideas?

Get more tips at RE/Max of Cherry Creek’s blog.

Curious about Denver real estate?

Have questions about the Denver market?