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A tankless water heater installed in a space-saving storage area

Pros & Cons of Tankless Water Heaters: What’s Right for Your Home?

Tankless water heaters are all the rage in San Francisco. With the upcoming ban on all gas water heater sales in the Bay Area starting in 2027, many homeowners are proactively searching for their next replacement. Of course, electric water heaters with storage tanks are an option, too. So, what are the pros and cons of going tankless? Could it be the right solution for your home?

At George Salet Plumbing, we’re thrilled to be the Bay Area’s trusted tankless water heater experts. The benefits of tankless models are almost too many to name. That said, there are a few important considerations that homeowners should make when they’re weighing tankless water heaters vs. tank styles.

Understanding Tankless Systems

How Tankless Water Heaters Work

Tankless water heaters, also known as on-demand water heaters, heat water instantly as needed. They do this by passing water through a powerful heat exchanger, transferring heat from either a gas burner or an electric element. This process kicks in the moment you turn on your faucet, shower, washing machine, or dishwasher.

Because hot water isn’t constantly being held to temperature or losing heat out of the tank, these systems are much more energy efficient.

Gas or Electricity?

Tankless types of water heaters can use either fuel source. But while gas burners tend to get a little hotter, they are overall less efficient than electric models.

Benefits of Going Without a Storage Tank

  • Endless hot water supply on-demand
  • More energy-efficient than storage hot water heaters
  • Reduced hot water wait times
  • Smaller footprint ideal for space-saving
  • Durable and long-lasting (up to 20 years, often with manufacturer warranties up to 15 years)

Tankless Water Heaters vs. Traditional Storage Tank Water Heaters

Energy Efficiency

Even the most energy-efficient tank-style water heaters struggle to match the environmental impact of tankless systems. Storage tanks are vulnerable to leaks, and some amount of heat is always lost while the hot water sits in the tank. Tankless systems only heat the water you need instead of wasting energy keeping tens of gallons of water hot at all times.

Initial Costs & Long-Term Savings

Tankless systems are more expensive to install upfront, it’s true. Especially if you’re switching to tankless or to electric for the first time, you’ll have to factor in electrical work and additional labor costs. Average water heater replacement costs in California range from $2,000-4,000, depending on the type, size, and complexity of the project.

However, according to Energy Star, a tankless water heater can save you up to 30% on your utility bills. This means that if you spend $100 per month on your water heater, you could save $30 per month by switching to a tankless water heater.

The payback period for a tankless water heater can be long, but because these systems are more durable and long-lasting, it may very well be worth it for those who use a lot of hot water.

Space & Placement Constraints

If your current water heater is located in the attic, then it will be much easier (and more advisable) to switch to tankless than if it is located in the garage. We highly recommend switching in this scenario, as it’s much safer to heat water on demand than to rely on a heavy, superheated tank of hot water on the top floor of your home.

Water Usage & Demand

If you ever run out of hot water with your current tank heater, a tankless system could be a great solution, as these systems provide an unlimited supply. But there are special considerations to take into account for large families and homes over 5,000 square feet. You’ll want to consult a professional to choose the right model with the ideal flow rate for your home.

Flow rate refers to the maximum amount of hot water that the heater can produce at one time. This rate is determined by a number of factors, including the size of the heater, the type of fuel it uses, and the temperature rise (the difference between the incoming water temperature and the desired hot water temperature).

A member of the George Salet Plumbing team installing a bank of tankless water heaters in a local commercial space.

Regional Considerations in California

In just a few short years, gas models will not be available for purchase in San Francisco. By 2030, the sale of new gas water heaters will be banned entirely in the state of California. So if you want one, this may be your last chance—but it’s also a perfect opportunity to switch to electric.

Don’t worry—if you’re not ready to switch yet, you don’t have to. You won’t be required to retrofit your system. But switching to an electric model is something anyone relying on their gas lines will have to do eventually, and thankfully, you have some help in doing so.

Incentives & Rebates

These tax credits and incentives are current as of August 2023. Keep checking with your utility company for the latest updates!

  • Federal tax credit: The federal government offers a tax credit of 30% of the cost of installing a tankless gas water heater (up to $600).
  • California tax credit: The California state government offers a tax credit of $200 for the purchase and installation of an Energy Star-certified natural gas tankless water heater.
  • BayREN rebate: BayREN, a regional energy efficiency program, offers a rebate of $400 for the purchase and installation of an Energy Star-certified tankless water heater.

Bottom Line: Tankless Can Be a Great Option

The best way to know whether a tankless system is right for your home is to let the experts take a look. George Salet Plumbing has been helping Bay Area residents choose the ideal water heating solutions for their homes since the 70s. Our team is more than happy to evaluate your space and make personalized recommendations for types, brands, models, and sizes to suit your needs and budget.

Expert Tankless Water Heater Installation & Repair in San Francisco, CA

At George Salet Plumbing, we’re your skilled, clean, and honest plumbers. We’ve been installing and repairing water heaters of every conceivable brand, make, and model for over 40 years, and we’re here to help you find superior solutions for your family. Get in touch with the Bay Area’s water heater specialists today by calling (415) 234-0733 in San Francisco or (650) 557-3883 in the Peninsula. Or, schedule an appointment online!

Schedule a service with us today!

Schedule a service with us today!

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