The primary benefit of tankless water heaters is the energy savings they provide, according to Energy.gov. An average family saves approximately $100 a year using a tankless water heater. Tankless water heaters are designed to last five to 10 years longer than traditional units that use a storage tank.
Tankless water heaters are available in both gas and electric models, notes Energy.gov. Gas models have higher flow rates than electric ones, but they waste energy if they are equipped with a pilot light. Some models come with an intermittent ignition device instead of a pilot, and even models that use a pilot can be manually turned off when not in use. Tankless water heaters typically cost more to purchase and install than conventional systems. The flow rate of an average tankless heater is 2 to 5 gallons per minute, so running a dishwasher and taking a shower may not be practical; two or more heaters can be installed separately or with parallel connections.
Tankless water heaters may not produce the consistent water temperatures that conventional heaters do, says Consumer Reports. Hot water is not delivered instantaneously from a tankless system because it takes time to heat the water to its target temperature. In a power outage, the electric controls on a tankless heater result in the loss of hot water. Maintenance costs for a tankless hot water heater may be higher due to calcium and scale accumulation.