On-Demand vs. Hot Water Tank: Which Is Right for Your Home?

A traditional tank water heater is less expensive than a tankless water heater. Neither system is "better" than the other. The choice will come down to how much hot water your household uses, your budget, long-term comfort goals, and available utilities in your area.

This guide outlines the differences between tank and tankless heaters, the pros and cons of both units, answers frequently asked questions, and more.

The differences between conventional water heaters and tankless water heating systems include:

Storage-tank water heater

Storage tank models heat and store a certain amount of water in a tank (varies by tank size). When hot water is required, the hot water is transferred from the tank to the taps or appliances throughout your home. Cold water then replaces the hot water in the tank, which reheats it.

Tank-style water heaters are prone to standby heat loss because the hot water is stored. This means that the heating element must frequently reheat the water in the tank even if no one in your home is using hot water, as the water remains idle in the tank.

Tankless or on-demand water heater

Tankless water heaters do not store a large supply of water. When you turn on the tap or use an appliance like the washing machine, water will flow through the unit and be heated as it passes through.

Generally speaking, tankless water heaters have an energy efficiency advantage over conventional water heaters because they eliminate standby heat loss. According to Natural Resources Canada, ENERGY STAR-certified tankless water heaters use approximately 30% less energy than the average tank water heater.

That said, lower energy consumption doesn't automatically mean lower overall costs in every household across southern Ontario. Actual operating costs and savings will depend on hot water usage, local fuel costs, and the energy efficiency ratings of your unit.

Hot water accounts for roughly 7.2% of the energy used in every Canadian household, so regardless of which model you choose, focusing on the energy efficiency rating is essential.

When it comes to hot water demand, a correctly sized storage tank offers a reserve of hot water that's ready to go when you need it. However, once the storage tank depletes, the unit will need some time to reheat the new replacement water. A tank water heater's first hour rating (FHR) measures how much hot water it can provide during one hour of peak, high demand in your home. The higher the rating, the greater the volume of water your water heater can provide.

How tankless systems handle peak demand

Tankless water heaters, on the other hand, offer on-demand hot water when your household hot water demand remains within its intended capacity. This capacity will depend on flow rate, temperature rise, available fuel or electrical, and the number of fixtures used at the same time.

The size of your household alone isn't enough to determine which model you may want to consider. Other factors that should be considered alongside your household size include:

• Number of showers and baths you have

• How often you use your dishwasher and washing machine

• What your peak morning and evening water demand is

• How often multiple fixtures are used at the same time

• The water temperature of incoming water from municipal lines

When it comes to space savings, tankless water heaters are ideal. They are compact and often mounted directly on your wall, which is ideal for households with limited floor space.

Tankless water heaters are more complex to install, especially when you're upgrading from a conventional water heater to a tankless system.

Straight tank-for-tank replacement

Replacing an existing storage tank model with a similar-style system is often straightforward, especially when your home's electrical capacity, fuel supply, venting, and plumbing are already compatible with the new unit.

Tank-to-tankless conversion

Upgrading to a tankless water heater may require modifications to your fuel capacity, electrical supply, plumbing, venting, and other parts of your home.

In most cases, tankless water heaters are more expensive to install than traditional tank water heaters. That said, costs can vary depending on the type of unit installed, installation complexity, labour availability, whether you qualify for government rebates, and more.

The maintenance required for your water heater will depend on the make, model, and manufacturer's instructions.

Storage-tank maintenance considerations

Beyond what your owner's manual outlines, storage tank water heaters should undergo a professional maintenance service at least once a year to ensure the tank, electrical box, fuel supply, and safety components are all working correctly.

Tankless maintenance considerations

Tankless water heaters should also undergo an annual maintenance appointment to ensure optimal energy efficiency and safety in your home.

Your home's water quality can affect both tankless and tank water heaters. Minerals in the water can cause sediment buildup in storage tanks and lead to corrosion over time if proper maintenance is not conducted. Tankless water heaters can also be affected by hard water sediment buildup, which will need to be flushed from the unit periodically.

Make sure to check your water supply. Municipal water conditions will vary, and maintenance should be tailored to the specific conditions in your area.

The pros and cons of tank water heaters include:

Pros

• Lower upfront costs

• Straightforward installation

• A reserve of ready-to-use hot water

• Electric water heater and natural gas water heater models are available

Cons

• Can take up valuable space in your storage room

• Experiences standby energy loss

• Stored hot water can deplete

• Shorter lifespan

The pros and cons of tankless units include:

Pros

• Compact and wall-mounted

• Reduced standby heat loss

• Improved energy efficiency levels

• Continuous, on-demand hot water

• Longer service life

• Available in electric tankless and gas tankless water heater models

Cons

• Higher upfront cost

• Water demand may exceed flow rate capacity if not properly sized

Unsure which unit is right for your home? Below is a checklist comparison to help you along your decision-making journey:

Before choosing a new water heater for your home, ask yourself the following questions:

1. How much hot water does my household use at the busiest time of day?

2. How many fixtures may need hot water simultaneously?

3. Is my current water heater meeting demand?

4. What is my upfront water heater installation budget?

5. Does my home already have suitable gas or electrical capacity?

6. Is mechanical-room space limited?

7. How long do I expect to stay in the home?

8. Am I comfortable with the maintenance requirements of the equipment I'm considering?

A professional technician can help you assess your current system, household water demand, and budget before determining which model of water heater would best fit your needs.

Book a consultation with an Enbridge Sustain partner across the Greater Toronto Area today!

Which system offers better long-term value?

Greater energy efficiency levels don't automatically mean greater value for every household. Long-term value should also be considered in terms of:

• Equipment and installation cost

• Energy use and local fuel costs

• Maintenance and repairs

• Expected service life

• Warranty coverage

• Expected ownership length

Tank vs. tankless considerations for Canadian homes

Canadian winters, especially in southern Ontario, require a reliable water heater. When considering a new water heater for your home, you'll also need to think about the following:

Incoming-water temperature matters

Tankless water heaters and tank water heaters need to increase the temperature of incoming water to a desired temperature before it is delivered throughout your home. The colder the incoming water temperature is, the greater the increase in temperature required to meet your needs, which often means more energy used to do so. That's why ensuring you have the right size water heater for your home is a non-negotiable when it comes to never running out of hot water when you need it the most.

Household demand matters more than household size.

The size of your home and your household demand also matter alongside peak demand requirements. With this information, you'll be able to determine the size and capacity of your new water heater system.

Energy efficiency matters

Water heating uses a large portion of your household's energy, which makes choosing an energy-efficient model all the more important if you want to save money on energy costs long-term.

Fuel availability differs by property.

Depending on where you live, fuel availability may vary. Luckily, water heaters are made to use natural gas, propane, or electricity, which a professional technician can match to what your home already uses.

Can you purchase or lease-to-own tank and tankless water heaters?

Yes, many HVAC companies in southern Ontario offer lease-to-own programs that can help you offset the cost ofa  new water heater for your home.

With Enbridge Sustain, you can get a brand-new water heater installed today for $0 down and no payments for the first 12 months of your agreement. You choose a monthly payment plan that works for you, and once your lease is up, you'll own your water heater outright.

Book a consultation with an Enbridge Sustain partner today to learn more about the options available to you!