Going Tankless Isn’t a No Brainer

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Tank vs. Tankless: Is Upgrading Your Water Heater Really Worth It?

Every few years, someone calls me asking whether they should replace their old water heater with a tankless one. And every few years, I give them the same honest answer: “It depends—on what you value.”

There’s a lot of hype around tankless systems, but let’s set aside the marketing and look at the numbers.

🔁 The Two Contenders

1. Tank Water Heater (Gas)

  • Installed Cost: $1,600–$2,400
  • Lifespan: 10–15 years
  • Energy Efficiency: 0.60–0.70 EF (Energy Factor)
  • Hot Water Supply: 40–50 gallons, then wait for recovery
  • Annual Gas Usage: ~200–250 therms/year
  • Replacement cycle: More frequent

2. Tankless Water Heater (Gas)

  • Installed Cost: $3,500–$4,800
  • Lifespan: 15–20 years
  • Energy Efficiency: 0.82–0.96 EF
  • Hot Water Supply: Endless (within capacity limits)
  • Annual Gas Usage: ~150–180 therms/year
  • May require upgrades: gas lines, venting, water softener in hard water areas

🔢 Let’s Break Down the Math

Let’s say you’re deciding between:

  • A $2,000 tank water heater
  • A $4,000 tankless water heater

And your average annual gas cost is around $1.20 per therm.

1. Energy Cost Over 15 Years

  • Tank: 225 therms/year × $1.20 = $270/year
    → $270 × 15 years = $4,050
  • Tankless: 160 therms/year × $1.20 = $192/year
    → $192 × 15 years = $2,880

Savings on energy over 15 years:
$4,050 − $2,880 = $1,170

2. Total Cost of Ownership Over 15 Years

  • Tank: $2,000 (install) + $4,050 (fuel) = $6,050
  • Tankless: $4,000 (install) + $2,880 (fuel) = $6,880

🧾 Net Difference:

You’ll likely spend about $800 more over 15 years for a tankless system—assuming no major repairs or maintenance costs crop up (which they likely will in 15 years time). And remember, you’ll also probably have to flush and maintain the tankless unit annually to keep it efficient and under warranty. Unless you do this annual flish yourself, the cost to have this done can be around $150.

🧠 So Why Go Tankless?

Here are the actual advantages:

  • Endless hot water – No more waiting between showers
  • Smaller footprint – Saves space in utility rooms or closets
  • Longer lifespan – If maintained, some go 20 years
  • Slight energy savings – But not enough to pay for itself quickly

🧱 Why Many Still Go With a Tank

  • Lower upfront cost – Easily half the price
  • Fewer compatibility issues – Works with your existing setup
  • Simple maintenance – Flush every few years, maybe change the anode rod
  • No extra install headaches – No new gas lines or fancy venting required
  • Lower repair costs – Tank repairs are almost always cheaper

🚪 Bottom Line

If you’re looking to maximize long-term efficiency, have a full household constantly using hot water, or just really want that “endless shower” experience—a tankless system might be worth it for you. But from a purely financial point of view, a good-quality tank water heater is still the more economical choice for most homeowners.

At the end of the day, the real question is this:
Would you rather save money today, or spend more for hot water convenience and energy savings spread out over a decade or two?

Either way—know what you’re getting into. Because paying for efficiency that never gets realized… is just inefficient.

Want help pricing out both options for your home? All I need are a few photos of your current setup—no sales pitch, just straight info

Premier Mechanical – www.claimyourcomfort.com – 720.207.6812

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