Should You Replace Your Hot Water System with a Tankless Hot Water System?

Tankless Instant Hot Water Systems – Pros, Cons, and Considerations

If you're considering switching to a tankless hot water system (also called an instantaneous hot water system or continuous flow unit), several factors will determine whether it’s the right choice for your home. Your existing system type, energy source availability, budget, household size, and hot water demand all play a crucial role in this decision.

Types of Tankless Hot Water Systems

1️⃣ Electric Tankless Hot Water Systems

• Operate similarly to a kettle, heating water as it flows over heating elements.

• Energy Use: Typically 20–60kW per hour (compared to 3.6kW per hour for standard electric storage systems).

• Pros: Affordable, compact, easy installation, no need for gas.

• Cons: High power demand, may require costly electrical upgrades, no compatibility with off-peak tariffs or solar power.

2️⃣ Gas Tankless Hot Water Systems

• Use natural gas or LPG to heat water instantly.

• Pros: More efficient than electric, 6-star energy rating, temperature control options, recirculation features to reduce water waste.

• Cons: Require gas availability, electronic ignition (needs reliable power), LPG can be expensive.

Pros & Cons of Tankless Hot Water Systems

✅ Pros:

✔ Energy efficiency – Only heats water when needed.
✔ Space-saving – No bulky tank; can be installed indoors or outdoors.
✔ Continuous hot water supply – No running out of hot water.
✔ Lower maintenance costs – Fewer components prone to failure.

❌ Cons:

❌ Higher upfront costs – Initial installation can be expensive.
❌ Limited simultaneous usage – May struggle to supply multiple fixtures at once.
❌ Potential additional costs – Electrical or gas upgrades may be necessary.

How Your Existing System Affects the Decision

🔹 Electric Storage System & No Natural Gas Availability:

• Switching to an electric tankless system is expensive due to electrical upgrades.

• Better alternative: Consider solar hot water or heat pump systems for long-term energy savings.

🔹 Gas Storage System with Natural Gas Availability:

• Best option: Gas tankless hot water system.

• Installation costs are similar to replacing a storage unit, but long-term savings on energy bills make it a cost-effective upgrade.

🔹 Long Distance to Fixtures:

• If your hot water takes too long to reach taps, an under-sink tankless water heater can provide instant hot water without excessive water waste.

Cost of Tankless Hot Water Systems

💰 Electric Tankless Water Heaters: $700 - $2,000 (supplied & installed)
💰 New Electric System with Upgrades: +$700 - $1,500 (if rewiring required)
💰 Gas Tankless Water Heaters: From $1,099 (supplied & installed)
💰 Full Gas Conversion from Electric/Storage: From $1,799 (includes electrical work)

Note: Prices vary based on unit size, brand, and installation complexity.

How System Age Affects the Decision

• Under 10 years old? Keep your existing system and maintain it regularly.

• Over 10 years old? Upgrading to a 6-star gas tankless system could save $500+ per year on energy bills.

• Replacing early could save over $1,000 during the system's lifespan, making it a quick return on investment.

Tankless Hot Water System Reviews: What Matters?

When researching reviews, consider:

• Brand reliability: Rinnai, Rheem, and Bosch have strong reputations.

• Installation quality: Poor setup leads to negative reviews, even for top brands.

• Homeowner misuse: Improper self-installation is a common source of complaints.

📌 Top Brands for Tankless Hot Water:

• Gas Systems: Rinnai Infinity, Rheem, Bosch.

• Electric Systems: Stiebel Eltron (German-engineered, highly efficient).

Is a Tankless Hot Water System Right for You?

✔ YES if:

• You have natural gas available.

• Your household has moderate hot water demand.

• You want to save on energy bills long-term.

❌ NO if:

• Your home has no gas connection and electrical upgrades would be costly.

• You rely on off-peak electricity tariffs.

• You have a large household with simultaneous hot water use.

Where to Next?

📞 Need expert advice? Call us at to discuss your options!
🔎 Explore our full range of water heaters at [Water Heaters].
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