Tankless Vs. Heat Pump Water Heaters

Smiling technician repairing an hot-water heater

With technology and design techniques progressing at breakneck speed, it’s not surprising that traditional water heaters have been replaced by the new, much more efficient tankless water heaters in most households. And considering how big of an investment water heaters are, it is important people make the right decision when investing in one since they aren’t something that can be easily replaced on a yearly basis. 

Now, we understand that many people are still new to the concept of tankless water heaters, and it is still quite a task to wrap one’s head around the fact that their gigantic traditional water heating systems could be replaced by much more compact and faster tables systems.

In this article, we have discussed these two heating systems in depth for people to better understand the differences between the two and make a more informed decision when buying one the next time.

1. The Mechanism

The first thing that comes to everyone’s mind when comparing the two water heating systems is how do these actually work and what makes their mechanisms so different? So, here’s a comparison of the two: tankless vs. heat pump water heater:

Traditional Heaters: 

As far as conventional water heating tanks are concerned, they can usually store and heat up to 30 to 60 gallons of water at a time and are typically around 5 ft tall and 2-3 ft wide. While Traditional heaters use a range of different resources to heat the water, the most common ones include electricity, natural gas, propane, and even oil.

And the way these heaters are designed causes them to run continuously, which means that with the heaters running nonstop, the consumers keep on paying for the heating fuel regardless of whether they actually need this constant hot water supply or not.

Tankless Heaters:

While traditional heaters are significantly larger in size, tankless heaters, as their name suggests, are without tanks, thus saving a lot of space. Instead of storing vast amounts of water and continually heating it, these water heaters only use just enough water as needed and run the water through heating units with the help of a heating exchanger, which allows them to increase the temperature and heat the water fairly quickly.

Compared to traditional heaters, tankless heaters only heat the water as and when needed, consequently minimizing unnecessary energy loss or thus proving to be a much more sustainable option out of the two.

2. Price Ranges

Given the substantial differences in their sizes and mechanisms, it is quite understandable that the price range of these two heaters must also be quite different. So, for everyone planning to buy a new heater and wondering how much does each water tanker type cost, here’s a price range of the two tankless water heaters vs. heat pump:

Traditional Heaters:

Large, conventional water heaters have now become comparatively less expensive compared to the newer, more space-efficient tankless water heaters. So, on average, a new electric traditional heater can cost around $570 whereas the same heater but powered by gas can cost $600. Efficiency wise, a conventional heat pump water heater rakes up an annual operating cost of almost $245 for gas models and $ 580 for electric models.

Of course, these amounts change based on the capacity, brand, and features that each consumer chooses but on average, a traditional water heater with standard features should cost around the same as the prices quoted above.

Tankless Heaters:

With their compact sizes and space and energy conservation, tankless water heaters are already a better option for most people. But if still not convinced, the price range usually gets people to think again as compared to the conventional water heaters. These systems cost much less and don’t leave as big a dent in your pocket as storage tank water heaters do. On Average, a tankless water heater should cost around $525. In terms of efficiency, tankless water heaters round up yearly operating costs to up to $195 for gas-operated heaters and $535 for electric heaters. 

Once again, if compared, heat pump water heater vs. tankless, tankless heaters once again not just prove to be a better option cost-wise but also a much better option out of the two, energy efficiency-wise with the tankless on-demand heaters being anywhere between 24 to 34% more energy-efficient compared to the conventional storage-tank water heaters.

If you are looking for a water heating system now and seek a professional’s advice or help, we suggest getting in touch with the industry leaders and experts at American Home Water and Air in Phoenix, Arizona. With over 35 years of experience under their belt, they deal with anything and everything related to water heating systems, from installation to maintenance and servicing.


In the end, when drawing conclusions, one can safely state that out of the two tankless water heaters are not only more cost and energy-efficient but also space-efficient and sustainable both in the short as well as long term. 

Moreover, the water heats quicker in a tankless heater, with about 1 to 3 gallons of water being heated every minute. Therefore, when looking for a new water heater, it is wise to make a switch and opt for a tankless water heat vs. traditional water as the more recent systems can help you save significant amounts of money both in the purchasing costs as well as the annual operation costs.

Written by Andrea Estrada

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