What you need to know about tankless versus standard water heaters

Is it time to replace your water heater tank? Most homeowners just assume they’ll need to put a new tank in its place. However, if you’re at the point of replacing your water heater, you have the option to install what’s known as a tankless water heater. These systems have a number of advantages over tank—also known as “standard”—water heaters, and they’re definitely worthy of your consideration.

In this article, we’ll review what you need to know about both tankless and standard water heaters. We’ll compare their features, energy-efficiency, longevity, and cost. In doing so, we’ll hopefully give you everything you need to know to make the right decision about which type of system is right for your home.

If you’re looking for a professional recommendation, Wagner is here to help. Here in Albuquerque, we’re your home’s best friend. Our experienced and friendly plumbers are water heater experts, having installed countless standard and tankless units. Call us to learn more and to get started with your water heater replacement.

Related: Our Water Heater Buying Guide


In a sense, all water heaters are convenient. If you’ve ever had to take a cold shower on a frigid winter morning, we think you’ll agree. However, tankless water heaters have a few features that really make them an ideal fit for your home.

Let’s first talk about how tankless water heaters work. Unlike standard systems that store water in a tank for later use, tankless units heat water as it’s needed at the tap, running cold water through a heating element to get it to the right temperature for your shower head, sink faucet, or dishwasher. Here’s what that really means: a tankless system can’t “run out” of hot water like a standard one can. In effect, these systems can generate endless hot water.

This might not seem like a big deal to people who use hot water sparingly. But, for large homes and families with busy mornings, this feature is nothing short of game-changer. No longer is the last person to take a shower left with cold water. Instead, the tankless water heater can keep up with demand.

Far and away, this feature is why most homeowners invest in tankless water heaters. There’s other benefits, of course—and we’ll discuss a few in the remainder of this article—but “endless hot water” is the main selling point for tankless systems.

Watch: Common Water Heater Myths Answered

This video from the team at This Old House addresses several common water heater myths. If you’re looking to learn more about water heaters, you should check it out:


As a homeowner, every dollar that comes into your home is important. You’ve partitioned out your income into buckets: paying the mortgage, buying food, paying for auto insurance, and more. Nothing’s worse than having to deal with a higher-than-expected utility bill. It means that money going to other buckets, like that vacation you’re planning, needs to instead go to the local electric or gas company.

It’s why energy-efficiency—which can often feel so abstract to homeowners—really matters. The more efficient your home is, the less money you’re paying toward utilities. That’s a big win.

When comparing tankless and standard water heaters, there’s no question that tankless systems are more efficient. As it turns out, keeping water in a tank hot for long periods of time takes more energy than heating water at the moment it’s needed. Making the switch to a tankless water heater can cut your monthly utility bills down.


There’s an old saying, “Nothing lasts forever.” There’s another, less-old saying that might as well go along with it: “Especially things that combine water, heat and metal.” Water heaters have a limited lifespan because they have a tough job, and it’s why the average standard water heater only lasts between 8-12 years on average. It’s not unheard of for some water heaters to beat that range, but—at the decade mark—homeowners should at least be prepared to replace their system.

In this regard, tankless water heaters do a lot better. Unlike standard systems, they don’t store water in a metal tank, which helps them experience a lot less corrosion and last a lot longer. Most tankless water heaters last about 20-25 years, with some units going beyond even that.

What that ultimately means is that a homeowner who purchases a standard water heater might have to buy two systems in the same period of time that a homeowner who purchases a tankless system just has one. In the section below, we’ll discuss cost—keep this key difference in mind when comparing these two types of systems.


Let’s start with the obvious: tankless water heaters generally cost more upfront than standard water heaters. The “sticker price,” as some might call it, can be double what the average standard water heater costs. The reason that standard water heaters have stuck around, despite all the advantages tankless systems have over them, is because of their general reliability and lower cost. For some people, that’s the draw that matters.

That being said, as a homeowner, you should think about how much your water heater “costs” in a different way. Unless you’re planning on selling your home tomorrow, you’ll save money every month with a demand-type system. Month-to-month, those energy savings might not seem like a lot, but they will add up over the long life of the system.

In this way, it’s not unheard of for some homeowners to “break even” on the cost difference between a standard and tankless water heater just a decade into owning the system. If you’re thinking long-term—and, as a homeowner, you should be—a tankless water heater might start making a lot of sense. That’s before you start taking the system’s convenience into account, either.


No matter which type of water heater you’re leaning toward, you’ll need an experienced plumber to properly install it for you. Don’t make the mistake of investing in a new system and then cutting corners on installation. Call Wagner. We’re Albuquerque’s go-to team for both tankless and standard water heater installation.