Can you switch from tank to tankless water heater?

Author: Mrs. Yoshiko Stehr  |  Last update: Thursday, September 18, 2025

Switching from a traditional tank water heater to a tankless heater has its benefits, like energy efficiency, space savings, and a consistent supply of hot water. However, the transition comes with a higher upfront cost and potential challenges.

Is it hard to switch from tank to tankless water heater?

Installing a tankless gas water heater is a difficult and sometimes dangerous process. We highly recommend having a licensed professional plumber handle this job. Be sure to follow all local plumbing and electrical codes when sourcing and installing parts for your new water heater.

How much does it cost to switch from tank to tankless water heater?

Equipment purchase and installation runs $1,200–$3,500 for tankless heaters versus $800–$1,500 for traditional tanks. Tankless models use 24%–34% less energy when households use up to 41 daily gallons, according to ENERGY STAR.

Can you replace a tank water heater with a tankless one?

Yes you can. You should put them in series with the tank upstream of the tankless. In some areas the incoming water temperature is quite cold at least part of the year. This requires upsizing the tankless. If you have a tank in front with tepid water, then the tankless can be smaller and perform more consistently.

What is the downside of a tankless water heater?

Before you commit to buying a tankless water heater, the primary drawbacks to know include: Higher upfront costs. Tankless water heaters are, on average, quite a bit more expensive to buy and install than tank water heaters. Access to fuel.

PROS and CONS of Going From a TANK to TANKLESS Water Heater

Why do people not like tankless water heaters?

Additional Installation Costs

Tankless water heaters are much more complex than traditional hot water tanks. As a result, they require professional installation. If you're switching from a hot water tank to a tankless unit, you will likely need your gas lines rerouted, as well as a larger gas supply line.

Can I replace my 40 gallon water heater with a tankless water heater?

Absolutely! In fact, tankless water heaters are becoming the standard for new home construction because of the energy efficiency.

Is it worth replacing a tank water heater with a tankless?

Electric tankless water heaters still save homeowners around $44 per year according to the US Department of Energy. Longer useful lives than storage tank water heaters. Tankless water heaters typically last 20 to 30 years, double the forecasted useful life of a storage tank water heater.

Can you run 2 showers with a tankless water heater?

The right tankless water heater can definitely take care of all your family's hot water needs, including taking multiple showers at once. If you're considering upgrading to a tankless water heater, it's essential to work with experienced professionals.

What do I need to know before switching to a tankless water heater?

  1. The large financial investment required upfront.
  2. High installation costs especially for gas and venting models.
  3. Can cause bursts of cold and hot water if you turn the faucet on and off quickly.
  4. Inconsistent temperatures sometimes.
  5. Not good for running multiple fixtures.
  6. Hard to run lukewarm water.

Is there an IRS tax credit for a tankless water heater?

The federal tax credit for tankless water heaters can lead to significant savings for homeowners. Eligible tankless gas water heaters must have an ENERGY STAR certification and a UEF of greater than 0.95. Homeowners can claim up to $3,200 in tax credits for eligible home improvements in a single year.

How much does your electric bill go up with a tankless water heater?

How Much Electricity Does a Tankless Water Heater Use? Many people wonder if tankless water heaters increase electric bills. The answer is no — tankless water heaters can save money on your monthly electric bill because they're 8%-34% more efficient than storage water heaters.

Where should a tankless water heater not be installed?

Keep your water heater away from outside elements

If your tankless heater is exposed to extremes weather conditions, it will run a greater risk of premature failure. So, make sure your appliance is away from doors and windows, and never installed in the garage or basement.

How much does it cost to switch from a tank water heater to tankless?

The typical range for tankless heater installation is between $5,400 and $7,400 averaging out to around $6,400 (including the water heater, warranty and tune ups). The tankless installation without the unit can cost between $1800 and $3500, averaging out to around $2650. One of the big variables is labor rates.

Can you replace a 50 gallon water heater with a tankless water heater?

A 50-gallon water heater should be replaced with a tankless system with a 10 GPM flow rate just to be safe. Selecting the right flow rate ensures you won't experience cold showers or excessive energy costs. Proper sizing optimizes performance, providing hot water on demand without unnecessary waste.

How long does it take to replace a water heater with a tankless water heater?

Installing a tankless water heater typically takes four to five hours, depending on the type of system and a household's needs.

What size tankless water heater do I need for a 3 bedroom 2 bath house?

Proper sizing is important prior to select and installing a tankless, but in general the average rules for sizing the correct water heater for a household are roughly: 3.5 GPM for 1-2 fixtures simultaneously. 5 GPM for 2-3 fixtures simultaneously. 7 GPM for 3-4 fixtures simultaneously.

Can you run the dishwasher and shower with a tankless water heater?

With a tankless water heater, you can take a shower, use the dishwasher, and do laundry all at the same time without losing hot water. On top of saving, you from the dreaded cold shower, it can also save you money and energy.

Is a tankless water heater good for a family of 4?

For a family of four, you will likely need a tankless water heater capable of producing hot water for two to three bathrooms simultaneously. Factor in the temperature rise needed for your desired hot water temperature. Typically, a temperature rise of 70°F is required to achieve a 120°F hot water temperature.

Can you switch from a tank to tankless water heater?

Switching from a traditional tank water heater to a tankless heater has its benefits, like energy efficiency, space savings, and a consistent supply of hot water. However, the transition comes with a higher upfront cost and potential challenges.

Why avoid a tankless water heater?

Upfront Costs

The upfront cost of equipment is often higher for tankless units. Tankless water heater costs are running anywhere from 25% to 50% more than standard tank units. Additionally, gas models tend to be more expensive than electric ones.

Does Costco sell tankless water heaters?

And to keep the hot water flowing, we offer a variety of high-performance water heaters, including electric water heaters, energy-saving tankless water heaters, and the latest smart water heaters. Costco carries a variety of lighting that's perfect for your kitchen, bathroom, dining room, and outdoor living areas.

Do you have to replumb your house for a tankless water heater?

Do I need to replace all my home's plumbing if I install a tankless water heater? Rarely is a complete overhaul necessary. However, you may need to upgrade certain sections of your plumbing, particularly those leading into and out of the tankless unit, to ensure proper water flow and volume.

How much money will I save by switching to a tankless water heater?

It's true: tankless water heaters will cut up to 40% off your monthly energy bill. By heating water instantaneously and only when you need it, you and your family members can enjoy continuous, uninterrupted hot water at the same time, along with savings over a conventional tank.

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