Hybrid And Tankless Water Heaters: Which One Is For You?

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Energy efficiency add-ons like hybrid and tankless water heaters are both becoming more  common in the 21st century home. Here are some questions to ask.


When Norwegian Edwin Ruud invented the storage-style model of the water heater after emigrating to Philadelphia, he couldn’t have imagined the impact his invention would have on the world. Today, water heaters are the number-one energy draining device in the modern home, but we can’t live without them.

It wasn’t until 2008 that Energy Star began rating water heaters for energy efficiency. That was eye-opening, and today we’re seeing drastic advances in technology coming quickly.

Most efficient water heaters: questions to ask

Today, it’s arguable the two most energy-efficient, affordable water heaters are the tankless water heater, also known as continuous flow, inline or flash water heater, and on-demand water heater, and the “hybrid” or “heat pump water heater.”

Let’s talk about some points to consider when you’re choosing between these most energy-efficient water heaters.

Are you in a drought area?

Tankless heaters are great for energy efficiency but most take 3 to 8 seconds to reach the right heat level, and this can cause some water waste. Any waste at all is an issue in places like California, though.

Hybrids, however, have water storage and are at a constant temperature, just like old-school tank-style electrical water heaters. It’s simply in how that water is heated that the energy savings come.

Are you in a small space?

If you’re building a tiny home or you’re dedicating a water heater to a small apartment, the tankless on-demand water heater is likely your best bet. With no tank, there’s no floor space loss. It’s a small, wall-mounted unit that doesn’t take up any space at all, making it your best choice, space-wise.

Are you installing it yourself?

If you don’t want expensive plumbing installation projects, and you’re in the right area for them, it might be best to go with a hybrid, since it’s an easier installation as it’s a self-contained heater device, as opposed to the tankless, which needs to be wired into the system and could need new grid or electrical upgrades, which sometimes makes its initial costs a little higher.

Do you live in the sunbelt?

This is the right area for hybrids, then. A heat pump water heater would be great for you. These need to be installed in regions that are between 40 to 90 degrees, at least, year-round, as they work on the principle of sucking warm air out of the atmosphere and converting that to heat for the water. They expel cold air, which is awesome when you’re living in a warm place, but it’s exactly what you don’t want in colder environments. Between sucking the warm air in and expelling the cold, this is a recipe for failure in colder climates, like a Boston winter or Canada.

Do you have a natural gas or propane line?

Tankless hot water heaters can be run on gas, too, and this takes out the worry that, if the power fails, the unit won’t work. Even if you have a larger home, you can get more than one unit for the on-demand water heater and it can be installed where it’s needed making for less travel for the water and again increasing the energy efficiency. One could be dedicated to just the kitchen and installed under the kitchen sink quite easily – maybe not cheaply, but easily.

Do you have a large family?

The tankless water heater allows for an energy-efficient but constant source of hot water once it’s turned on and running, and you won’t ever need to worry about the tank running out. This means it’ll be hot for a sixth consecutive shower and you can still do a load of hot laundry.

A larger family may also mean you’ll need to install more than one unit for the home’s use, but that’ll pay off in convenience and sanity in no time at all. The hybrid, however, is so-called because its design means that, once the tank has been consumed, the incoming water will need to be heated from scratch, just like with old electrical water heaters.

Pros and cons for both, but more pros!

In the end, both of these approaches are made of win. Money aside, there’ll be savings a-plenty, and if you choose wisely, they could both be paid off in direct savings from your energy bill in less than two years.

Climate factors into the viability of the hybrid heater, making at least 60% of this continent ill-suited to their use, but who knows what tomorrow’s energy advances will bring? With smaller homes and smarter designers, I think the tankless heater is a more appealing solution to the continent as a whole, and I’d like to see a future with more of them in use.

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Steffani Cameron

Steffani Cameron is a Victoria BC-based writer on a variety of topics. Here on the BuildDirect blog, she specializes in writing about smaller, urban spaces. How do you make the most of your smaller space? How do you decorate it to suit you? And how do you wage the war against clutter and win? This is Steff’s specialty.