The conventional tank water heater has been around for well over 100 years, and while the technology has changed, it still functions pretty well the same. Tankless (or on-demand) water heaters don’t store any water and only heat up the water when a hot water tap is turned on. Because they’re so small they can be installed almost anywhere in the home.
Installing a tankless heater in a new house construction or during a major upgrade is the most cost effective. If you’re looking to replace an existing tanked system, then you’ll definitely want to evaluate the initial purchase price and installation cost against the long-term savings you can expect to achieve, and the forecasted rate increase for the type of power you use.