Tankless water heaters - pros and cons

Tankless water heaters: What are the benefits?

Tankless water heaters have become increasingly popular due to their sleek, compact design and ease of installation, and flexibility with both electrical and gas-fired models available. However, they do have some cons, and depending on the application you may still be better off with a tank-based hot water system.

Advantages of tankless water heaters

One of the main advantages of tankless water heaters is their compact installation: they eliminate the tank, which is normally the largest component of water heating systems. This makes them a great choice for smaller households or apartments, where space is a limiting factor.

Tankless water heaters also offer the advantage of operating exactly when hot water is needed, unlike their tank-based counterparts, which may operate for long periods just to maintain the temperature of the stored water. Assuming the energy source is the same, a tankless heater will typically consume less energy than a tank-based model.

Another positive feature of tankless heaters is size flexibility, depending on user needs. If hot water is only needed at a few strategic points, for example a shower and a kitchen faucet, small tankless heaters can be deployed to optimise energy consumption. On the other hand, in a household with a large family and a high demand for hot water, it can make sense to consolidate the heating capacity into a single unit.

Tankless heaters also offer a long service life, lasting up to 20 years, while most tank-based models last between 10 and 15 years. (On a personal note, I’ve had a tank-based hot water system fail on me in the middle of Winter, in Wonthaggi on Victoria’s rugged south coast – not fun – but thankfully my neighbours were amenable to my flatmates and I traipsing over there to use their shower!)

Disadvantages of tankless water heaters

The price to pay for saving the space occupied by a tank is being unable to store hot water. There are situations when this is a disadvantage:

  • If there is a service interruption by the power company, hot water will not be available.
  • Electric utility companies charge higher rates during hours when the power grid is experiencing a high load. A tankless heater can’t store hot water beforehand to avoid the consumption of expensive energy.

It is also important to keep in mind that, although tankless heaters offer moderate efficiency, they are not the most efficient option available. If the tankless water heater is based on electrical resistance, a heat pump can offer the same heating output while reducing energy consumption by more than 60%. With the abundance of sunshine in Australia, solar collectors are also a viable option that requires neither gas nor electricity to operate.

When a single tankless water heater is used for the needs of an entire household, there may be issues with sudden increases or drops in water temperature: This is caused because a single unit must respond to unpredictable changes in consumption at various points of use.


Tankless water heaters allow a compact installation and offer a balance between upfront cost and energy efficiency. In Australia, there is a broad product selection available from Rheem: they have gas-fired and electric heaters, in both tank-based and tankless configurations.

Share this post

Share on facebook
Share on twitter
Share on linkedin
Share on email

The latest from our blog

The latest from our blog