Thinking about upgrading your water heater but not sure which type is right for you? You’re not alone. One of the most common questions we hear is, “What’s the difference between a tankless water heater and a traditional one?”
With rising energy costs and a growing interest in efficiency, more homeowners are weighing the pros and cons of both systems. Traditional water heaters keep a full tank of hot water ready at all times, while tankless units fire up only when you turn on the tap. The difference might seem simple, but it can have a big impact on your comfort, energy use, and monthly bills.
At Rooter MD, our licensed technicians install and service both types of water heaters, including Navien tankless water heaters, to help you choose the best fit for your home. Let’s explore how to decide which water heater may be best for you.
How a Traditional Water Heater Works
A traditional water heater stores 40 to 80 gallons of hot water in a heavily insulated steel tank. Gas models use a burner beneath the tank, while electric versions rely on one or more heating elements inside the water.
Insulation around the tank minimizes heat loss, but some standby energy loss still occurs as the unit maintains water temperature even when you’re not drawing hot water.
Installation Requirements and Footprint
These heaters require ample floor space, are typically located in a basement, garage, or utility closet, and need appropriate venting for gas models. They connect to cold water inlet and hot water outlet pipes and require a pressure relief valve and a drain pan.
Their larger size can limit placement options in smaller homes or finished spaces. Installation isn’t usually a DIY job, and in many cases, you need to get a permit first.
Energy Losses from Standby Heat
Because the tank constantly reheats stored water, traditional heaters lose energy through standby heat loss. This inefficiency can account for 10 to 20% of a household’s water heating bill. Many homeowners offset this by lowering thermostat settings or adding extra insulation blankets, but they still pay to keep water hot even when it’s not in use.
How a Tankless Water Heater Works
A tankless water heater heats water only when you open a hot water tap. Cold water flows through a heat exchanger, where gas burners or electric elements rapidly raise its temperature to your set point. When the tap shuts off, the system stops heating.
This on-demand operation eliminates standby heat loss and delivers an endless supply of hot water. You won’t have to ever worry about running out during extended showers or multiple simultaneous uses.
Compact Size and Venting Needs
Tankless units are small wall-mounted boxes, freeing up floor space and allowing installation in tighter areas such as closets or under counters.
Gas-fired tankless models require stainless-steel venting or direct-vent configurations to exhaust combustion gases safely. Electric versions simply need a suitable electrical supply and ventilation clearance. Their smaller footprint offers greater flexibility in multi-level or space-constrained homes.
Efficiency Gains and Tankless Water Heater Benefits
On average, tankless heaters achieve 24 to 34% higher energy efficiency for gas models and up to 27% for electric models compared to traditional tanks. Brands like Navien tankless water heaters incorporate condensing technology to capture extra heat from exhaust gases, pushing efficiency above 90%.
Over the unit’s lifespan, these savings translate into lower operating costs and reduced environmental impact, making tankless systems an attractive choice for homeowners focused on long-term value and energy conservation.
Comparing Cost & Efficiency
Upfront costs for traditional water heaters typically range from $500 to $1,500 for equipment and installation, depending on tank size and fuel type. Tankless models start around $1,200 and can exceed $3,000 once venting, gas-line upgrades, or electrical work are included. Despite higher initial investment, tankless heaters offer significant operating savings.
Traditional tanks lose energy maintaining temperature around the clock, costing homeowners up to $150 per year in standby losses. By contrast, tankless units heat water on demand, reducing water-heating bills by 10 to 30%.
Navien tankless water heaters, for example, use advanced condensing technology to achieve 95% energy efficiency. Over a 15- to 20-year lifespan, the reduced gas or electric usage can offset the higher purchase price. Rebates and tax credits for high-efficiency models further lower your net cost.
Space & Maintenance Considerations
Tankless water heaters are compact, wall-mounted units that free up floor space in basements, garages, or utility closets. Their small footprint allows installation near point-of-use locations, reducing pipe runs and heat loss. Traditional tanks require 3 to 5 square feet of floor area and must be installed with proper clearances around the tank, limiting placement options in finished spaces.
In terms of maintenance, tankless models benefit from annual descaling or flushing to prevent mineral buildup in heat exchangers, especially in hard-water areas. Traditional tanks require periodic draining to remove sediment from the bottom of the tank and occasional anode-rod replacement to prevent corrosion.
Both systems should receive professional inspections every 1 to 2 years to ensure safe, efficient operation.
Getting the Right System for Your Home
When selecting between tankless and traditional water heaters, consider household size and peak hot-water demand. A single-point tankless unit may suffice for homes with one bathroom, while whole-house tankless units, which are often installed in series or parallel arrays, handle simultaneous showers, dishwashing, and laundry. Traditional tanks sized at 50 to 80 gallons meet moderate demand but may run out of hot water during back-to-back uses.
Fuel availability also matters. Gas tankless models require adequate gas-line capacity and proper exhaust venting. Electric tankless heaters need high-amperage circuits to deliver rapid heating.
If you aren’t sure what kind you have, check your utility bills for lines that are marked either “electric” versus “natural gas”, or inspect your basement to see the shape of your water heater. Traditional water heaters are typically cylindrical and about as tall as an average adult, tankless heaters are much smaller, square or rectangular, and do not sit on the floor.
Why Trust Rooter MD With Your Water Heater Install?
Rooter MD’s licensed technicians have extensive experience installing Navien tankless water heaters and traditional hot water tanks. Our preventative maintenance plans include annual inspections, flushing or descaling, and performance checks to extend the life of your system. With transparent pricing, timely service, and a satisfaction guarantee, Rooter MD is ready to be your trusted water heater partner.
Leading Water Heater Service & Installation in Michigan
Rooter MD serves the greater Detroit metro area with prompt, professional water heater installation and maintenance. From tankless water heater benefits to hot water tank installation, our team ensures you get reliable hot water when you need it. Call us today at (248) 888-7777, or get in touch with us online to get your free consultation scheduled.
