Tankless Vs Heat Pump Water Heater: A Detailed Comparison

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By Debarghya Roy

Are you researching the advantages and disadvantages of tankless water heaters versus heat pump water heaters? You’ve come to the right place. With space at a premium in most homes, choosing water heating options that require minimal real estate is important! 

In this blog post, we will explore energy efficiency, installation costs, operating costs and savings, and lifespan and durability comparison between tankless vs heat pump water heater technology.

How Does a Tankless Water Heater Work?

Working with a tankless water heater is very simple compared to a heat pump water heater. Tankless water heaters first heat up the water directly without using the storage tank. The tankless water heater works as follows, 

  • First turn on the hot water faucet.
  • After this, the heat exchanger allows the cold water to flow through it.
  • By using the burner or electric element the cold water gets heated up and as a result, the tankless water heater produces a continuous supply of hot water.

How Does A Heat Pump Water Heater Work?

Heat pumps directly make use of electricity to transfer heat from one component to another instead of using direct heat.

The heat pump water heater works as follows,

The heat pump water heater works similarly to the refrigerator in reverse. It captures heat from the surrounding and then moves it into the high temperature to heat to cold water and then finally it is transferred to the storage tank.

Energy Efficiency: Tankless Vs Heat Pump Water Heater

Energy efficiency is a critical factor to be considered when comparing tankless and heat pump water heaters. 

Energy Factor (EF) ratings are used to measure the efficiency of these appliances, indicating how effectively they convert energy into heat.

Water Heater TypeTankless Water HeaterHeat Pump Water Heater
Energy Factor (EF) RatingMinimum 0.82Varies, typically higher than tankless
Energy Efficiency30-50% more efficient than conventional gas heaters.80% more efficient than conventional gas heaters.
Energy Efficiency Rating0.55 – 0.933 -5 
Electricity Consumption198 – 288kWh/month112kWh/month
Estimated Annual Energy Cost SavingsVaries depending on usage and energy costs. 
Example: $100/year with a 0.95 EF tankless water heater compared to a 0.60 EF conventional gas heater.
Varies depending on usage, climate, and energy costs.
Example: $300/year with a 3.0 EF heat pump water heater compared to a 0.90 EF conventional electric heater.

Installation Costs: Tankless Vs Heat Pump Water Heater

When deciding on a water heating system for your home or business, it’s essential to consider the installation costs. 

Image Credit: Rinnai Tankless Water Heater by Jesus Rodriguez is licensed under (CC BY 2.0)

Here we will compare the installation costs of tankless water heaters and heat pump water heaters, as well as the long-term cost savings associated with choosing one system over the other.

Water Heater TypeTankless Water Heater (Gas-powered)Tankless Water Heater (Electric-powered)Heat Pump Water Heater
Initial Cost$200 – $2300$195 – $800$2500 – $10000
Maintenance Cost$16 – $110$45 – $200$100 – $200
Average Installation Cost$1,250$1,150$2,800
Long-term Cost SavingsEnergy-efficientResults in lower utility billsEnergy-efficientResults in lower utility billsEnergy-efficient Potential rebates from energy companies
Government Incentives and RebatesEligible and will get up to $175Eligible and will get up to $350Eligible and will get up to $200

Operating Costs And Energy Savings: Tankless Vs Heat Pump Water Heater

Operating costs and energy savings are key factors to consider when choosing between tankless and heat pump water heaters. 

Various factors such as usage patterns, climate, and installation location play a crucial role in determining the efficiency of both types of water heaters.

FactorTankless Water HeatersHeat Pump Water Heaters
Usage PatternsTankless water heaters are 22% more energy-efficient than storage tank water heaters and only use energy when hot water is needed, reducing operating costs.Heat pump water heaters perform similarly or better than conventional electric models, resulting in significant energy savings and reduced operating costs.
ClimateTankless water heaters perform well in most climates, but their efficiency may decrease in colder climates due to higher energy consumption to heat the water.Heat pump water heaters rely on warm ambient air for efficient operation and may perform poorly in colder climates, leading to higher operating costs.
Installation LocationTankless water heaters require proper ventilation and gas line installation, which could increase installation costs depending on the location.Heat pump water heaters require sufficient space for air circulation, which may limit installation options and potentially increase costs.
Proper SizingProperly sizing a tankless water heater ensures that it can provide enough hot water for the household’s needs, maximizing energy efficiency and reducing operating costs.Heat pump water heaters must be sized correctly as well to optimize performance and energy savings.
MaintenanceRegular maintenance on tankless water heaters, such as flushing and cleaning, helps maintain optimal efficiency and prolongs the lifespan of the unit.Heat pump water heaters require regular maintenance, including cleaning the air filter and checking the evaporator coil, to maintain efficiency and extend the unit life.

Lifespan: Tankless Vs Heat Pump Water Heater

Both tankless and heat pump water heaters have longer expected lifespans, with the potential for even greater lengths of time depending on specific maintenance requirements. 

Tankless water heaters typically have an average lifespan of 20 years or more while heat pump water systems tend to last 10 to 12 years on average, providing a significant advantage in terms of longevity. 

The lifespan of either type of system can also depend on certain environmental factors too. For instance, moisture levels near an HPWH can impact its effectiveness since it relies heavily on air quality for efficient performance. 

In addition to lengthier lifespans that are largely determined by long-term upkeep practices to ensure efficiency throughout its life cycle usage is

  • Requires users to properly determine and maintain both the water heaters.
  • Exact details regarding which model is served are essential during replacement.

Durability: Tankless Vs Heat Pump Water Heater

In the case of HPWHs, they offer additional energy savings but may not be as durable as TWHs because they rely on electricity or gas and must include fans within their system.

The durability of the Heat pump water heater

If well maintained then a heat pump water heater can last up to 10-15 years making them more durable and making them a reliable steady source of heat. 

The cost-effectiveness of this system is based on how well their components are taken care of through continual upkeep such as condenser coils inspections plus fan replacement every two to three years for HPWHs.

The durability of Tankless water heater

They are more durable than heat pump water heaters and their cost effectiveness will upkeep the continual care of the components such as annual filter cleaning that increases the reliability of TWHs.

Blockages or corrosive build-ups are not seen within TWHs as they don’t contain tanks and give less chance for them to break apart increasing their durability.

Environmental Impact: Tankless Vs Heat Pump Water Heater

When it comes to the environmental impacts of tankless and heat pump water heaters, energy efficiency is key. 

In terms of emissions, both tankless and heat pumps cause very minimal air pollution in comparison to most other models due to their advanced technology.

Heat pump water heater includes a component that reduces the levels of pollutants like carbon dioxide and nitrous oxide that contribute directly to global warming. 

Although tankless water heaters effectively reduce the levels of pollutants.

Additionally, while both demand hot-water systems generate some noise during operation with any noise being considered low relative to traditional units, anyone who values complete silence would prefer a tankless system due to our lower operating sound level compared with a unit fitted with a fan.

Space and Size: Tankless Vs Heat Pump Water Heater

Tankless water heaters are much smaller than storage tank water heaters and can be typically installed above fixtures or in other tucked-away locations. This makes them ideal for homeowners looking to save space, as they only require the footprint of their bodies without an accompanying storage tank. 

Heat pump water heaters, on the other hand, take up more space since they are almost three times larger than regular electric storage tank models due to their insulated hot air delivery system and compressor. 

Generally speaking, the size of a conventional heat pump electric unit is 15-20% bigger than that of most propane or natural gas-powered units because it needs additional space for venting combustion gasses outside. 

Capacity: Tankless Vs Heat Pump Water Heater

Both types have standard capacities ranging from about 2-8 gallons per minute GPM respectively.

The capacity of traditional heat pump water heater can produce around 151 to 302 liters of hot water each minute.

For Example, A heat pump water heater will be able to increase the temperature of the water up to 130 degrees Fahrenheit at 30 gallons flow rate each minute.

The capacity of a tankless water heater is about 7.6 to 15.2 liters of hot water each minute.

For Example, A tankless water heater of any type will be capable of raising the temperature of the incoming water source up to 60 degrees Fahrenheit at 3 gallon of flow rate each minute.

Maintenance: Tankless Vs Heat Pump Water Heater

Both tankless and heat pump water heaters require regular maintenance for them to continue running efficiently.

Maintenance of tankless water heater

Tankless water heaters with propane tankless units have the highest frequency of annual checkups and electric tanks require less attention. 

On average, a tank-type heater requires one inspection every two years while greater attention is recommended if it’s particularly old or has seen frequent use.

Maintenance of heat pump water heater

In most cases, maintenance work related to conventional heaters involves simple calibrations like adjusting thermostat settings or replacing defective parts such as heating elements or insulation material.

Heat pump longevity varies largely upon how well maintained it is too, where yearly inspections/preventative measures must be done to maximize its service life span.

Repair Costs: Tankless Vs Heat Pump Water Heater

Tankless water boilers can cost double the price of standard hot water systems since they involve more complicated installations. 

Repairing the tankless water heater models will depend on several factors such as the type of unit, the severity of the damage, and the complexity of the repair process usually starts at around $250 and go up to over a thousand dollars depending on the details involved.

Meanwhile, repairing problems with a traditional hot water system typically doesn’t cost more than $200.

Upkeep for air source heat pumps tends to be costly due to their intricate electrical components that can be expensive when needing replacement parts in addition labor associated with repairs are often higher compared to other types of water heating technologies thus making overall costs much harder to bear.

Performance And User Satisfaction: Tankless Vs Heat Pump Water Heater

The performance and satisfaction of both types of water heater are dependent upon proper installation and sizing, maintenance, water quality, climate, and individual usage habits.

CriteriaTankless Water HeaterHeat Pump Water Heater
Proper InstallationsInstallations of tankless water heaters should be done by a certified professional following the manufacturer’s recommended specifications for a better performance rate of  18%.Installations of the heat pump water heater and its components should be done by a certified specialist according to the given specifications for a better performance rate of  20%.
MaintenanceProper maintenance of tankless water heaters is critical to ensure optimal performance.It includes flushing out the system annually, which will prolong the lifespan of the system and prevent any unexpected malfunctions.Visual inspection, anode-rod inspection, inspecting TPR function, drain, flush, and refill should be done regularly to get the user satisfaction by increasing its performance.
Water QualityPoor or hard water deteriorates the tankless water heater system over time to avoid this and to increase its performance water softener must be used. Using a salt-based water softener with a heat pump system to avoid breakage of components due to hard  water is essential for maintaining its optimal performance for longer.
ClimateThe tankless water heater is the best performer in all climates as it makes use of both gas-powered and electric-powered sources to heat the water.Insulation near the tankless unit makes a big difference during climate changes when it comes to efficiency.The heat pump water heater gives the best performance with an outdoor temperature above 40 degrees. During colder weather, more insulation is required to protect against freezing temperatures which can damage the system.

The Future Of Water Heating Technology For Tankless And Heat Pump Water Heaters

The future of water heating technology lies in hybrid systems which combine the best aspects of tankless and heat pump water Heaters. 

Hybrid Systems 

Hybrid systems are designed to save energy by utilizing air from outside, or an already existing source for heating hot water as opposed to generating its own heat.

Image Credit: New Hot Hybrid Heat Pump Water Heater by Jeff Robbins is licensed under (CC by 2.0)

As such, they offer several advantages over conventional tankless or Heat Pump Water Heater technologies including improved efficiency, temperature control, and capacity, space-saving convenience, and increased lifespan.

When compared with traditional Tankless options alone, hybrids tend to be much more efficient thanks to their use of pre-existing sources for generating hot water instead of relying solely on electricity or gas as fuel.

This helps reduce overall energy costs while also lessening environmental impact due to fewer emissions released into the atmosphere. 

Additionally, some hybrids have additional features that allow users better control when it comes both to output temperature settings and volume levels while also requiring much less maintenance than standard systems.

Most hybrid models require significantly less space when installed than typical Tankless units.

They can fit almost anywhere within a home where there is access either indoors/outdoors for gathering air naturally; making them convenient options for those who may lack room for larger appliances such as full-sized tanks or pumps.

Key Takeaways

  • Tankless water heaters offer 30-50% more energy efficient than conventional gas units, while heat pump water heaters boast even higher EF ratings and have the potential for rebates.
  • Installation costs of tankless (both gas and electric) are approximately $1,150 – $1,250; Heat pump systems cost an average of $2,800.
  • Proper sizing and maintenance can impact the efficiency of either system in both usage patterns, climate, and installation location.
  • Both systems offer longer expected lifespans than traditional tank models at 20+ years–the length depends on environmental factors like air quality for HPWHs versus routine filter cleaning for TWHs.


There are both advantages and disadvantages of tankless and heat pump water heaters. It is best to choose a beneficial heating system based on region, cost, quality, and features that gives a great return to the household.

Heat Pump