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Tankless Water Heater Pros and Cons

Contact Indigo Home & Facility Services at (512) 608-4999 for tankless water heater installation or replacement. Central Texas plumbing professionals you can rely on.

If you're constructing a new home or remodeling your existing one, it's a perfect time to consider a tankless water heater, also known as an on-demand heater. You may also wonder if it’s time to replace your existing conventional (or standing) water heater.

According to the International Association of Home Inspectors, the predicted life expectancy of a conventional water heater is 6-12 years. Research and testing show that this is based on normal wear and tear conditions and keeping up with recommended maintenance. It doesn’t account for extreme weather, neglect, overuse, or abuse.

Signs that your conventional water heater may be near the end of its useful life include:

  • The hot water runs out quickly, or the water temperature is inconsistent. For example, the water turns cold while you're showering or filling the sink to wash dishes.
  • You hear unusual noises when using hot water, such as knocking or rumbling.
  • You notice water leaking around the base of the heater.
  • You see limescale buildup on plumbing surfaces.
  • Your water smells or tastes odd.
  • Your water is discolored. It may be tinted red or yellow.
  • Your home has low water pressure.

The professionals at Indigo Home & Facility Services can help you decide if a tankless water heater using natural gas, propane, electricity, or solar power is right for you. We can work with you to understand your usage needs, budget, space, energy efficiency requirements, and more. For your consideration, we offer the following pros and cons:



Con: Tankless water heaters are initially more expensive than standing or conventional water heaters. A standing tank water heater ranges from $500 to $800, depending on how many gallons of water the tank can store. The average cost to purchase an electric tankless water heater can range from $170 to $800, while gas tankless water heater costs can range from $230 to $2,300.

Installation costs for a standing water tank average between $650 and $2,100 vs. $1,000 to $3,500 for a tankless unit. A key factor here is the hourly rate for a qualified plumber. A standing water tank can require about three hours to install versus six to ten hours for a tankless style.

Pro: Tankless water heaters are generally more energy efficient and can decrease your operating costs. The main reason is that they heat water on demand and prevent standby heat loss. This is because the hot water gets used instead of constantly heating while it sits in the tank. A more energy-efficient water heater will have a higher initial purchase price but will reduce operating costs over time.


Pro: Tankless water heaters are typically more efficient than traditional water heaters with storage tanks. The tanks on traditional water heaters are inefficient because water loses heat when it sits in the tank unused. Tankless water heaters produce hot water on demand, making you less likely to run out of hot water while having a bath.

Con: It might be more challenging to run several hot water-using appliances simultaneously because the tankless heater can only heat so much water at one time. Depending on how much hot water you use daily, it might be better to use the traditional water heater.


Pro: Conventional water heaters take up more space in your home. They can be five feet or taller and about two feet or wider. If you want to "hide" the tank in a closet, even more clearance space will be necessary for operational safety and to allow room to perform maintenance. Tankless water heaters average about 2 feet tall and one foot wide. They can save you floor space because they are typically wall mounted.

Con: Tankless heaters do require venting. Some manufacturers offer units that can be installed in recess boxes between studs inside walls, although this is primarily for new-construction applications.

Possible Rebates

Pro: Texas Gas Service customers may be eligible for rebates on purchasing and installing a new high-efficiency natural gas water heater or new natural gas tankless water heater. The central Texas plumbing professionals at Indigo Home & Facility Services can help determine if you qualify for this Water Heater Rebate Program.



Con: The setup and installation for a tankless heater can be more extensive than for a traditional water heater. It can require electrical work and additional plumbing work.

Geographic Location

The temperature of the water where you live can affect your water heater’s efficiency. In colder areas, the groundwater stays colder, requiring the water heater to work harder to get the water to the right temperature. A tankless water heater might not be the best choice for a cold location.

Hire Central Texas Plumbing Professionals You Can Rely On

If your water heater needs installation or replacement, trust the licensed professional plumbers in Austin at Indigo Home & Facility Services. We offer competitive prices and dedicate ourselves to getting the job done right.

For expert plumbing service, contact us at (512) 608-4999 to talk with one of our experienced contractors.

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