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Comparing a traditional tank style water heater side by side to a tankless model the most obvious difference is size and most will view the tank filled with hot water as an advantage, it's not. The tank demonstrates your source of hot water is limited to the amount of water the tank can hold. Before you can access more hot water you have to wait for the tank to refill and the new water to reach the desired temperature. With the tankless style heaters the water is heated as it flows through the unit, there's no limit and no need to wait for the water reach the temperature you want. Virtually unlimited hot water is a luxury everyone can enjoy.
Another disadvantage of the tank style heaters is the fact it takes up so much room which is why many are located in unused corners of the basement or in a special cabinet that has room for just the heater. The smaller footprint of the tankless models allows the homeowner to use the previously wasted space.
Water stored in the tank also creates another problem, the build up of minerals in the water that eventually lead to the failure of the water heater. The generally accepted lifespan of a tank style heater is generally accepted as being 10 years, while the tankless models enjoy 20 years or longer. The energy costs of using a tank style heater are also much higher if you consider it tanks energy to heat the water initially and then keep the water at the desired temperature while it's being stored. The tankless heaters only heat water when you need it, when there is no water being demanded, the unit it off and not using any energy which saves you a significant amount of money every year.
From a safety standpoint the tankless heaters which control the water temperature while dispensing the hot water are able to control the actual temperature of the water being dispensed to a higher degree than tank heaters. The temperature of water stored in tanks varies to a higher degree and poses a greater risk of scalding the consumer.
Tankless heaters are the clear winner in all categories, providing consumers with an efficient economical way to provide hot water to their household.