Quick answer
A tank water heater costs less to install, about $900–$1,800 for a 40–50 gallon gas tank, and delivers a stored supply that can run out. A gas tankless unit costs about $2,000–$4,500 installed, heats on demand so it does not run out, and uses less standby energy, but its flow rate limits how many showers run at once and it often needs a larger gas line and new venting. Tank suits a straight swap on a budget; tankless suits a household that runs out of hot water or plans to stay for years. Call (888) 217-6781 to reach a plumbing company taking calls in your ZIP.
Follow the short menu, then your 5-digit ZIP. The line goes quiet for a few seconds while it connects; stay on. If it does not connect, call once more: companies taking calls change minute to minute.
Written & reviewed by Marcus ReedIICRC WRT
Reviewed November 4, 2026· Next review May 2027
When a water heater fails, the replacement question is usually tank or tankless. Both work well. The right choice depends on how much hot water the house uses at once, what the gas line and venting can support, and how long you plan to stay.
Side by Side
| Tank (storage) | Tankless (on demand) | |
|---|---|---|
| Installed cost, gas | about $900–$1,800 (40–50 gal) | about $2,000–$4,500 |
| Installed cost, electric | about $800–$1,600 | Varies; large electrical service often needed |
| Hot water supply | Runs out when the tank is used up | Continuous, limited by flow rate |
| Standby energy loss | Yes, heat lost from the tank | Very little |
| Space | Floor space for the tank | Wall-mounted, compact |
| Install complexity | Often a straight swap | Often new gas line, venting and condensate drain |
| Maintenance | Flush sediment, check anode rod | Descale the heat exchanger |
Installed cost figures are from our water heater installation page.
Energy
The Department of Energy says demand water heaters can be 24% to 34% more energy efficient than conventional storage heaters for homes that use 41 gallons or less of hot water a day, and 8% to 14% more efficient for homes using around 86 gallons a day. The savings repay the higher price over years, not months.
When a Tank Makes Sense
- Straight replacement on a budget, with the same venting and gas line.
- A house that rarely runs out of hot water.
- You may move in a few years.
Talk to a plumber about this
One call reaches a plumbing company taking calls in your ZIP.
When Tankless Makes Sense
- The household runs out of hot water.
- You plan to stay long enough for the energy savings.
- Floor space is tight.
- The gas line and venting can be upgraded, or already suit it.
Sizing Tankless
Tankless is sized by flow rate in gallons per minute at your incoming water temperature. Colder groundwater in northern states lowers what a unit delivers. A plumber adds up the fixtures that run at the same time, such as two showers and a washer, and sizes from there. An undersized unit gives lukewarm water when two showers run. If you already have one that is struggling, see tankless water heater no hot water.
The Call
Call for a quote on either, and ask that it include the permit, venting, gas line work and haul-away. (888) 217-6781 connects you to a plumbing company taking calls in your ZIP. Follow the short menu, enter your 5-digit ZIP and stay on while it connects; if it does not connect, call once more, because the companies taking calls change minute to minute.
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Frequently Asked Questions
Is tankless better than a tank water heater?
Not for every home. Tankless does not run out and uses less standby energy, but costs more to install and is limited by flow rate. A tank is simpler and cheaper to swap.
How much does a tankless water heater cost installed?
About $2,000–$4,500 for a gas tankless unit, against about $900–$1,800 for a 40–50 gallon gas tank, before any gas line or venting upgrades.
How much energy does tankless save?
The Department of Energy says demand water heaters can be 24% to 34% more energy efficient than conventional storage heaters for homes that use 41 gallons or less of hot water a day.
Why does tankless need a bigger gas line?
It burns a lot of gas for short periods to heat water instantly, so many homes need a larger gas line and new venting.
Sources
- U.S. Department of Energy: tankless or demand-type water heaters
- U.S. Department of Energy: storage water heaters
Methodology: How we source and verify data · Report an error
Disclaimer: HearthDry is an independent educational resource. This article is for informational purposes only and does not constitute professional, legal, or insurance advice. Consult licensed professionals before making decisions about your property or insurance claims.
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