Traditional water heaters store gallons of water, continuously using energy to keep it heated. In contrast, tankless water heaters provide hot water on demand, improving efficiency and reducing energy costs. Studies by the U.S. Department of Energy indicate that tankless systems are 24%–34% more energy-efficient than conventional water heaters for households using less than 41 gallons of hot water daily. For larger households, they can still achieve up to 14% efficiency gains.

Beyond energy savings, tankless water heaters also offer longer lifespans, space savings, and consistent hot water supply. These systems last about 20 years, nearly double the lifespan of a traditional unit. Homeowners switching to tankless can benefit from lower monthly energy bills, less maintenance, and a reduced risk of water heater leaks. With federal tax incentives and potential rebates, upgrading to a tankless system is an investment that pays for itself over time.