How they differ
A tank heater keeps a set volume of water hot all the time and refills as you use it. Once the tank is drawn down, you wait for it to recover.
A tankless heater heats water only as it flows through. It never runs out, but it has a limit on how much hot water it can deliver at once, measured in gallons per minute.
A tank tends to fit when
- The priority is the lowest upfront cost
- An existing tank is being replaced like for like
- The gas line or electrical service would need major upgrades for tankless
- Hot water demand is modest and predictable
Tankless tends to fit when
- The household runs out of hot water with a tank
- Space is tight, or the heater can be mounted on a wall
- You plan to stay in the home long enough for the energy savings to matter
- Hard water will be treated or the unit will be descaled on schedule
What to ask before deciding
Whether the gas line, venting or electrical panel can support a tankless unit, what flow rate the household needs at its busiest, and what maintenance each option needs. Those answers usually settle it.