Tankless water boilers are more energy-efficient than boilers that use storage tanks, but are also more expensive. Water heaters with tanks may be better for some situations.
Gas-fired tankless water heaters may save money on monthly gas bills, but the savings are small and may not offset the cost of the initial purchase. The most inexpensive models of tankless boilers often start at about $1,000, while traditional storage models may be as low as $300. Tankless boilers also require yearly servicing for best results, which further increases the cost.
Testing by Consumer Reports also showed that tankless water heaters may not be able to meet the hot water needs of a busy family. Water temperature can be inconsistent, and sometimes the water heater may not turn on if only a trickle of water is being used.
Tankless heaters may be better for small homes because of their smaller size, and they generally have a longer lifespan than storage-based water heaters. The latter last an average of 10 to 13 years, while tankless models may last for 20 years with proper care. Hard water can reduce their lifespan, however, so use of a water softener may be necessary. Tankless heaters also require a large amount of energy when in use, so homes with older electrical systems may not be able to handle them.