A general rule-of-thumb is:
- If you use 2 or more hot water appliances at a time or more than 2 showers at a time, a tank water heater is probably the better option for your home.
- If you rarely use more than 1 hot water appliance at a time or use 2 or fewer showers at a time, a tankless water heater is probably the better option for your home.
- Your budget
- How much space you have
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How much hot water do you use at one time?
The bottom line is: If your household doesn’t normally use more than one hot water appliance at a time (or uses fewer than 2 showers at a time), a tankless water heater is a great option. However, if you do normally use 2+ hot water appliances at a time, or more than 2 showers at the same time, you should consider a tank water heater.
Tankless water heater
Tankless water heaters provide a never-ending source of hot water but they’re limited by how much hot water they can produce in a minute.
For example, many tankless units can only provide an average of 2-5 gallons per minute. And at that rate, you'll have a hard time getting enough hot water to run two appliances or take more than 2 showers at the same time.*
However, the number of gallons of hot water that a water heater can produce per minute also depends on something called temperature rise.
Temperature rise is the number of degrees the water needs to be heated. The higher the temperature rise, the less hot water the unit can provide per minute.
In some instances, installing several “point-of-use” tankless water heaters along with a whole-home tankless unit can help meet your hot water needs.
To determine your needed temperature rise/flow rate, you’ll need to enlist a professional.
*Point-of-use units (also called “POUs”) are smaller tankless water heaters that are installed near/dedicated to one specific hot water appliance (like a dishwasher or washer).
Tank water heater
Tank water heaters hold a fixed amount of hot water (20-100 gallons). A tank water heater can provide hot water to as many fixtures/appliances as needed—but only until the hot water runs out.
With a tank water heater, you could take a shower, run your dishwasher and run your washer at the same time, but only until you run out of hot water. Homeowners with tank water heaters typically have to account for “recovery time,” which is the time it takes for the tank to fill back up and heat the water.
Other factors to consider
1. Your budget
Tankless water heaters ($5,200-$6,800+) are more expensive than tank water heaters ($952 to $2,098) upfront.
However, tankless water heaters can be 24%-34% more energy efficient than storage tank water heaters (for homes that use under 41 gallons of hot water daily), according to Energy.gov.
2. Your space
Tankless water heaters take up significantly less space than tank water heaters do. Why?
Residential tank water heaters usually store 20-100 gallons of water, whereas tankless water heaters don’t store any water.
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