A tankless water heater can use less energy and last longer than a storage tank, but the savings shrink for households that use a lot of hot water. The right choice depends on your hot water use, your fuel and what your home can support.
A conventional storage heater keeps a tank of hot water ready. The Department of Energy says these remain the most popular type for homes, and they can run on natural gas, propane, fuel oil or electricity.
A gas tankless heater, also called on-demand, heats water directly without a storage tank.
The Department of Energy's Energy Saver guide gives these figures for gas tankless heaters compared with conventional storage tanks.
For homes that use 41 gallons or less of hot water a day, on-demand heaters can be 24% to 34% more energy efficient. For homes that use a lot of hot water, around 86 gallons a day, the gain is 8% to 14%.
The same guide notes that if you use hot water in several places at once, you may need two or more tankless heaters to keep up. It also says tankless systems require unique installation specifications and recommends consulting a certified technician before buying.
In practice, a switch from a tank to a gas tankless unit can involve changes to gas piping, venting or electrical supply. The need for those changes varies by home, so it should be confirmed in a written quote before work starts.
Tankless units also need maintenance in hard water areas. Rheem says scale can cause whistling or hissing in tankless units, and that they need periodic descaling instead of tank flushing. The City of Fresno's 2025 water quality report lists average total hardness of 129 mg/L, which the USGS scale classes as hard.
If your home uses an electric water heater, there is a third option. The Department of Energy guide says heat pump water heaters can be two to three times more energy efficient than conventional electric models. It cites ENERGY STAR as saying a certified heat pump unit uses 70% less electricity to make the same hot water as a standard electric model.
The guide also warns that this technology can pose installation challenges, so it recommends consulting an installer before buying.
We could not confirm that any state or utility rebate for heat pump water heaters is currently open to Fresno area homeowners, so we do not list one here. Ask your utility and the installer what is available at the time you buy.
Count how many people use hot water at the same time. Note whether your heater is gas or electric. Then ask for quotes on both a like-for-like tank and the alternative, with permit and any code work listed as separate lines.
The Department of Energy points out that a more efficient heater may cost more up front than repairing or replacing with a standard model, but the energy savings continue over the life of the appliance.
Call a licensed plumber before switching types. Gas piping, venting and electrical work need a professional, and a switch usually needs a permit.
The Department of Energy says gas tankless heaters can be 24% to 34% more efficient for homes using 41 gallons or less a day, and 8% to 14% for homes using about 86 gallons a day.
The Department of Energy says more than 20 years, compared with 10 to 15 years for most storage tanks.
Possibly not. The Department of Energy says homes with simultaneous hot water use in multiple places may need two or more tankless heaters.
Yes. Rheem says scale can build up in tankless units and that they need periodic descaling. Fresno's reported average hardness is 129 mg/L.
Central Valley Water Heater is a free referral service, not a contractor. Request a free quote from a local plumber.