Both kinds of water heater do the same job well — the right pick depends on your home and your priorities. Here's how to think about it.
How a tank water heater works
A tank stores 40–75 gallons hot and ready to go. It's lower cost up front, simple, and proven. The trade-offs: it can run out during heavy use, it loses some heat just sitting there, it takes up floor space, and it typically lasts 10–12 years.
How a tankless (on-demand) heater works
A tankless unit heats water only as it flows, so hot water is effectively endless. It mounts on the wall (you get the floor space back), wastes less standby energy, and can last 20+ years. The trade-offs: higher up-front cost, it may need a larger gas line or new venting, and its output is limited by flow rate (how many fixtures run at once).
The Chicago wrinkle: cold water + hard water
Two local factors matter more than the brochure suggests:
- Cold incoming water. Our winter groundwater is near 40°F, so a tankless unit has to work much harder to reach a hot shower. It must be sized for that "temperature rise" — an undersized unit is the most common reason people are unhappy with tankless.
- Hard water. Chicago's hard water scales up a tankless heat exchanger over time. Periodic descaling (or a water softener) keeps it running efficiently and protects that long lifespan.
We size and recommend for our climate — not a generic spec sheet.
What they cost (installed)
- Tank water heater: $1,800–$3,500
- Tankless water heater: $4,500–$8,000
Add for any gas-line, venting, or electrical upgrades the install requires. Your exact, flat-rate price is confirmed before work begins.
Which should you choose?
- Tank — if you want the lowest up-front cost, a simple like-for-like replacement, or your demand is modest.
- Tankless — if you want endless hot water, want the floor space back, plan to stay 10+ years, or have high simultaneous demand (a big family or multiple bathrooms).
The real answer comes from a quick look at your home's hot-water demand, gas/venting, and space. That's where we start.