Choose a tank if…
- You want the lowest upfront cost and the simplest swap.
- Your house already has the venting, gas line or wiring for a tank.
- You can live with a limited supply that runs out and then recovers.
Choose tankless if…
- You use modest hot water and want to cut standby energy loss.
- You want to free up floor space and plan to stay in the house a long time.
- You are ready to pay more upfront, and for any gas, venting or electrical work it needs.
Key takeaways
- Tank heaters cost less to install. Tankless units cost more upfront, mostly because of the venting, gas line or electrical work they may need.
- Tankless can use less energy. The Department of Energy says gas tankless heaters can be 24% to 34% more efficient than a storage tank in homes using 41 gallons or less of hot water a day, and 8% to 14% more at about 86 gallons a day.
- Tankless lasts longer on paper. The DOE says most storage heaters last 10 to 15 years and tankless can last more than 20. Another national guide says 15 to 20.
- A tankless unit has a flow limit. Two showers and a dishwasher at once may be more than one unit can handle.
- The right answer depends on your house, not on a rule. A plumber can look at your gas, venting, wiring and hot water use.
Side by side
| Tank | Tankless | |
|---|---|---|
| Cost basis | Lower upfront. Nationally, This Old House (updated 06/17/2026) lists $1,200 to $2,300 installed (national average, not a quote). | Higher upfront. Nationally, This Old House (updated 06/12/2026) lists $1,200 to $3,500, averaging $2,800 (national average, not a quote). |
| Running cost | Keeps a tank hot all day, so it loses some heat while idle. | Heats water only when you use it. The DOE gives 24% to 34% gains for light users and 8% to 14% for heavy users (gas units). |
| Lifespan | The DOE says most last 10 to 15 years. | The DOE says more than 20 years. This Old House says 15 to 20. |
| Hot water supply | A fixed amount, then a wait to recover. | Continuous, up to the unit's flow rate. |
| Install complexity | Often a like-for-like swap. | May need a new vent, gas line or circuit. |
| Best for | Lowest upfront cost; a house set up for a tank. | Modest hot water use; long-term owners; tight space. |
Upfront cost and running cost
Upfront.
- Nationally, This Old House (updated June 17, 2026) lists tank water heater installation at $1,200 to $2,300, and says the unit itself runs about $850 for electric and about $800 for gas, plus venting (national average, not a quote).
- Nationally, This Old House (updated June 12, 2026) lists tankless installation at $1,200 to $3,500, with an average of $2,800 including equipment and labor (national average, not a quote).
- By fuel, nationally, This Old House (updated June 12, 2026) lists electric tankless at $650 to $2,500, propane at $1,400 to $3,500 and natural gas at $1,650 to $3,500 (national average, not a quote).
Extras that can apply to tankless. Nationally, This Old House (updated June 12, 2026) lists venting for gas units at $400 to $800, gas line updates at $350 to $750, a new electrical circuit at $200 to $600 and a full panel upgrade at $1,000 to $2,000 (national average, not a quote). Not every house needs these. Ask the plumber which apply to yours.
Running cost. A tank keeps a full tank of water hot around the clock. That costs energy even when nobody is home, which engineers call standby loss. A tankless unit heats water as you use it. The DOE's Energy Saver guide says gas on-demand heaters can be 24% to 34% more energy efficient than conventional storage tanks for homes that use 41 gallons or less of hot water a day, and 8% to 14% more efficient for homes that use a lot, around 86 gallons a day. The gap closes as use goes up. We can't tell you what that means for your bill, because it depends on your fuel prices and your habits.
Lifespan
The Department of Energy's Energy Saver guide says most storage water heaters last 10 to 15 years, while tankless water heaters can last more than 20 years. This Old House (updated June 12, 2026) says tankless units last around 15 to 20 years. The two don't match, so treat tankless life as a range. Water quality, maintenance and use all matter. Our water heater lifespan guide covers the warning signs of a failing heater.
Flow rate and two showers at once
A tank stores hot water, so it can supply several fixtures at once until the tank runs low. A tankless unit makes hot water as it flows, and its output is limited. The DOE guide says that if you tend to use hot water in several places at once, you may need two or more tankless units to keep up. If your house has a big tub, multiple bathrooms or a busy morning routine, ask the plumber what flow rate the unit can deliver and what that means for two showers and a dishwasher.
Cold incoming water makes this harder. The colder the water coming into the heater, the more it has to be heated, and a unit can only add so much heat at a given flow. In practice, a unit that keeps up in summer can deliver a cooler stream at the same flow in winter. We haven't cited a figure for winter water temperatures here, so ask the plumber to size the unit for a cold day, not an average one.
Gas or electric
A tank or tankless unit can be gas or electric. Gas units need a gas supply and a way to vent exhaust. Electric units need enough electrical service, and an electric tankless unit draws a lot of power for the moments it runs. Most of Washington County gets electricity from BrightRidge. In Jonesborough, natural gas comes from Atmos Energy; elsewhere, check whether your street has gas service before you plan around it. If it doesn't, your options are electric, or propane if you have a tank. This Old House (updated June 12, 2026) prices electric, propane and natural gas tankless installs separately, as listed above.
If your house has gas and you are keeping a gas tank, see gas water heater repair. Our tankless water heater page covers installation, and water heater replacement covers what a swap involves.
Venting and electrical upgrades
The DOE guide says tankless systems "require unique installation specifications" and advises consulting a certified technician before you buy. Venting is the usual surprise. Gas units need a vent that suits the unit. A tank swap often reuses the old vent; a tankless conversion may not. On the electric side, a tankless unit may need a new circuit or a bigger panel, and a plumber and an electrician may both be involved. Permits may apply. Ask who pulls them.
Questions to ask the plumber
- What size and flow rate do you recommend for my house, and why?
- What would the installed price be for a tank, and for tankless, with everything listed?
- Does my house need new venting, a gas line, a circuit or a panel upgrade for either one?
- Who pulls the permit, and is an inspection needed?
- What does the warranty cover on the tank or heat exchanger, the parts and the labor?
- What maintenance does each type need? Tankless units in some homes need flushing, and tanks need periodic checks.
- How long will the job take, and how long will I be without hot water?
Write the answers down next to each quote. A lower quote that leaves out venting or the permit may not be lower in the end.
How to decide
- Count how many hot water uses overlap in your busiest hour.
- Check your fuel: natural gas on your street, propane, or electric only.
- Ask for a written estimate for both types, including venting, gas, wiring and permits.
- Ask how long the plumber expects each to last and what the warranty covers.
- Think about how long you will stay. A tankless unit's higher cost is spread over more years if you stay.
When to call
Call a plumber now if the tank is leaking, you smell gas, or you have no hot water and can't find the cause. If you smell gas, leave the house first and call your gas utility or 911 from outside. Never work on a gas line yourself.
Safety
Water heaters hold hot water and, if gas, burn fuel. Keep the thermostat at about 120°F. A failed vent can let carbon monoxide into the house, so use working detectors. Turn off the power or gas before any work on the unit, and leave gas, venting and wiring to licensed people.
Where our line fits
We don't set prices or do the work; the plumber sets the price. Any price, fee or schedule is agreed directly between you and the plumber. Use the figures here to judge whether a quote is in a believable range. For other jobs, see what plumbing jobs cost. Your plumber sets the actual price.