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Tankless vs. storage water heaters

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When choosing a water heater for your home or business, it is important to recognize the different options and benefits of tankless water heaters versus the traditional storage water heaters.

Storage water heaters use a storage tank, typically between 20 and 80 gallons in capacity, to heat and store a supply of hot water. Tankless water heaters, which are often called demand water heaters, eliminate the need for this tank and deliver a constant supply of water.

Natural gas-fired tankless units can waste energy if they have a constantly burning pilot light. In its storage-unit counterpart, the pilot light heats the water in the tank so the energy isn’t wasted. However, because water is constantly heated in a storage unit tank, energy can be wasted even when a hot water tap isn’t running. This is called standby heat loss.

While more energy efficient, tankless water heaters typically cost more and are much more expensive to install, especially if you are trying to update an exist home. A tankless unit can run $800 to $1,150 compared with $300 to $500 for the regular storage-tank types. Click here to watch a Consumer Reports study on tankless vs. storage water heaters.

For more information on the pros and cons of tankless and storage water heaters, visit the U.S. Department of Energy’s Energy Savers website.

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