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Tank vs. Tankless Water Heaters: What’s the Best Choice for Minneapolis Homes?

You’re replacing your water heater and you want to know which is better: tank or tankless water heaters.

Well, it depends on many different factors (which we’ll go into more detail below).

But, in general, here are our recommendations:

  • Choose a tank water heater if: You want something cheap and reliable and your current tank water heater has served you well.
  • Choose a tankless water heater if: You want an endless supply of hot water and/or you want something smaller that takes up less space.

Note: We do not recommend electric tankless water heaters for the Minneapolis-St. Paul area. They just can’t heat enough water quickly enough to be worth the cost.

Want more info on what makes these 2 types of water heaters different? Keep reading.

Traditional (tank) water heaters

The default water heater in the U.S. is the tank-style water heater. They work by heating water in a large storage tank so you have a supply of hot water ready when you need it.


  • Lower upfront cost. A traditional tank style water heater installed will usually run $700 to $2,000 while a tankless water heater is much more, usually coming in between $3,200 to $4,500. (What’s the Cost of a New Water Heater?)
  • Best option for “all electric” homes. Electric tankless water heaters don’t work well in Minneapolis. So if you don’t have natural gas, go with a tank-style water heater. And if you want a really efficient electric water heater, consider a hybrid heat pump water heater.
  • Simpler maintenance. Both types of water heaters need to be maintained, but a tank’s maintenance is much simpler and usually less expensive than tankless maintenance.


  • Runs out of hot water. Traditional water heaters can run out of hot water and then have to reheat a new batch of water (which can take some time).
  • Less energy efficient. Because they’re always on and always keeping the water in the tank warm, they use more energy than tankless water heaters.
  • Large (and getting larger). Tank water heaters won’t fit in tight spaces. And recent energy efficiency guidelines have made new water heaters even larger.
  • Don’t last as long. Traditional water heaters typically last 10-15 years where tankless versions can last up to 25 years.

Tankless water heaters

Tankless water heaters don’t have a storage tank for hot water. Instead, they only heat water when you need it.

That’s why they’re sometimes called “on-demand” or “instantaneous” water heaters.


  • Never runs out of hot water. Since tankless water heaters heat water when you need it, you’ll never run out. (However, that doesn’t mean you can run 5 showers at once. Tankless water heaters are limited by flow rate.)
  • More energy efficient. Tankless water heaters don’t have tanks, so they don’t waste energy keeping the tank warm all day long.
  • Takes up less space. Without a storage tank, you can fit them in tighter spaces.
  • Lasts longer. Tankless water heaters can last up to 25 years.


  • High upfront cost. This is the biggest knock on tankless water heaters. They usually cost $3,200 to $4,500 installed while a traditional tank style water heater runs $700 to $2,000. (See more: What’s the Cost of a New Water Heater?)
  • Won’t recoup costs. Tankless water heaters are more energy efficient. But they likely won’t recoup the additional upfront costs even over their longer lifespan. (For more info check this article by Green Building Advisor.)
  • Requires more maintenance. Manufacturers usually require you have your tankless water heater serviced every 6-12 months to maintain the warranty.

Schedule a water heater consultation

Want some prices on what it would cost to replace your water heater? Contact us online. Our plumbers serve the entire Minneapolis-St. Paul area.