Hot Water When You Need It

It heats water the way a heat pump heats a house — by moving heat rather than making it — which uses roughly a third of the electricity of a standard electric tank. It needs a reasonably sized, reasonably warm space to draw heat from, such as a garage or utility room. Where the space works, the running-cost difference is large and there is a utility rebate attached.

Tankless saves space, provides endless hot water, and has no standby loss, but costs more up front and often needs gas line or electrical upgrades. Tank units are cheaper to install and simpler to service. There is no universal answer; it depends on your household size, fuel, and where the unit lives.

Tank water heaters typically last eight to twelve years; tankless units can run twenty or more with descaling. If yours is in that range and showing rust at the fittings or on the tank itself, plan the replacement rather than waiting for the leak.