Long story short: You’re more likely to buy a tankless water heater for the comfort of consistent hot water—not for long-term cost savings.

Let’s go into more detail on how we came to that conclusion.

Tankless water heater con: High upfront costs = No worthwhile payback

If you’re buying a tankless water heater for cost efficiency, don’t bother.

While a tankless water heater may be more energy efficient than a storage water heater, it won’t pay for itself in the long run because of high upfront costs. The cost rises even further when retrofitting it into a current home because it’s more complex to install.

GreenBuildingAdvisor.com interviewed 8 contractors to compare installation costs for tankless vs storage water heaters. Here’s what they found:

• Tankless water heaters (with retrofit installation): $2,500 to $3,400.
• Conventional storage water heater: $900 to $1,300.

The payback period for those tankless water heaters? About 27 to 38 years. A tankless water heater on average lives 20 years. You do the math.

This isn’t to say you shouldn’t get a tankless water heater. We’re just saying, get them for the right reasons—which are the following.

Tankless water heater pros: comfort and compactness

Here’s where tankless water heaters shine:

• Potentially endless hot water: Given the right conditions, tankless water heaters can keep the hot water flowing and make everyone happy.
• Size: They’re briefcase sized, giving you flexibility for installation.

We need to expand on the “given the right conditions” part above. To provide endless hot water, a tankless water heater needs these conditions:

Non-frigid climate

Tankless water heaters have to heat up water on the spot. So in frigid climates where the water is colder, the tankless water heater is going to struggle to heat the water so it does not run cold.

Tankless water heaters thrive in Florida for this one reason: groundwater is warmer here. So it’s easier for tankless water heaters to heat your water to the temperature you need.

You’re not using multiple major water-using appliance

Tankless water heaters can only supply so many gallons per minute (GPM), depending on the size you buy (see below). So if you’re running 2-3 major water-using appliances (shower, bathtub, washing machine, etc.) together, the tankless water heater can’t supply the amount of hot water to meet the demand.

Sized correctly

Tankless water heaters are just like storage water heaters: you need to size them correctly to meet your family’s hot water needs.

We recommend hiring a Tampa Bay plumber to assess the tankless water heater size you need.