When a hot water tank fails, the choice usually comes down to two options: another tank, or a tankless unit on the wall. Both heat water with natural gas or propane in most Hamilton-area homes, and both are reliable. They differ in up-front cost, how they deliver hot water, how long they last and what they need from the house. Here is how they compare.
How each one works
A tank water heater keeps 40 to 60 US gallons of water hot all the time. When you use hot water, cold water flows in and the burner reheats it. Once the hot water is used up, you wait while the tank recovers. A tankless water heater keeps no water hot. A powerful burner fires when you open a tap and heats water as it passes through a heat exchanger, so it never runs out, but it has a maximum flow rate at any one time.
Up-front cost
- Gas tank, conventional vent: about $2,000 to $3,000 installed.
- Gas tank, power-vented: about $2,500 to $3,500 installed.
- Gas tankless: about $4,000 to $7,000 installed, more if the gas line or meter needs upgrading.
The tankless premium comes from the unit itself and from the installation: new venting through an outside wall, often a larger gas line, and isolation valves for descaling. See tankless water heaters for what the install involves.
Running cost
A tank loses heat through its walls and up its flue all day, even when nobody uses hot water. A tankless unit avoids most of that standby loss and, being a condensing appliance in most cases, burns gas more efficiently. For a family that uses a lot of hot water, gas savings are real but modest, often in the range of tens of dollars a year at current Ontario gas prices. Tankless is rarely chosen for the energy saving alone.
Lifespan
Tanks usually last 8 to 12 years. Hard water, high temperature settings and never draining sediment shorten that. Tankless units commonly last 15 to 20 years if descaled yearly, and their parts can be replaced individually. Over 20 years, one tankless unit can outlast two tanks, which narrows the cost gap.
Hot water supply
This is where the two feel most different.
- Tank: plenty of hot water at once, up to the tank’s volume, then a wait. A big tub or back-to-back showers can run it out.
- Tankless: endless hot water, but a limit on how many fixtures run at the same time. A properly sized unit handles two showers and a tap together in winter.
Tankless units also have a short delay as the burner fires, and can give a brief "cold sandwich" when a tap is turned off and on quickly. Recirculation systems and better controls reduce both.
Winter and incoming water temperature
Water coming into Hamilton-area homes is much colder in February than in August. A tankless unit has to raise it further in winter, which reduces its flow at the target temperature. A good installer sizes for winter conditions. A tank is less sensitive because it stores heated water.
Hard water
Much of the area has hard water, which leaves scale inside water heaters. In a tank, sediment collects at the bottom and makes it noisy and less efficient. In a tankless unit, scale coats the heat exchanger and must be flushed out yearly with a descaling solution. A softener or a scale-reduction cartridge cuts maintenance on either.
Power cuts
A tankless water heater needs electricity for its controls and fan, so it stops in a power cut. Power-vented tanks also need electricity. A conventional atmospheric gas tank with a standing pilot keeps heating water during an outage, which some rural owners in Haldimand and Norfolk value.
Space and venting
A tankless unit hangs on a wall and frees the floor space a tank used, useful in a finished basement. It needs an outside wall for venting with clearances from windows and doors. A conventional tank needs a chimney; if an old furnace no longer shares it, the tank may need a liner or a power-vented replacement.
A third option: heat pump water heaters
A heat pump water heater is an electric tank with a small heat pump on top. It pulls heat from the air around it, so it uses a fraction of the electricity of a plain electric tank, and it qualifies for a Home Renovation Savings rebate in some cases. It cools and dehumidifies the basement as it runs, which is welcome in summer and less so in a chilly unfinished basement in winter. It suits homes without gas, or owners moving away from gas, and needs a space with enough air around it and a drain for condensate.
Which suits whom
- Tank: smaller households, tighter budgets, homes where a gas line upgrade would be costly, or owners who want hot water in power cuts.
- Tankless: larger families, long showers or a big soaker tub, finished basements where space matters, and owners staying long enough to benefit from the longer life.
- Combi boiler: homes heated with hot water radiators, where one unit can do both jobs. See boilers.
If your tank is rented
Changing to an owned unit of either type means returning the rental tank under your agreement. Our guide to renting or buying covers what to check.
Getting quotes
Send one request and ask for both a tank and a tankless price, so you can compare on the same house. Say how many bathrooms you have and how many people live there.
Questions people ask
Is a tankless water heater worth it in Ontario?
For larger households who run out of hot water, usually yes. For one or two people, a good tank is often cheaper overall.
Does a tankless water heater save money?
It saves some gas by avoiding standby losses, but the saving is modest. The bigger benefits are endless hot water, space and a longer life.
How long does a tankless water heater last?
Often 15 to 20 years with yearly descaling, compared with 8 to 12 years for a typical tank.
Can a tankless water heater run out of hot water?
It cannot run out, but it can be overwhelmed if more fixtures run at once than it was sized for, especially in winter.