Updated October 2026. How tankless boilers and tankless water heaters work, what they save according to ENERGY STAR, how to size one, and what they mean when you buy or sell a home. Sources were read on October 28, 2026.
A tankless unit heats water only when you open a tap, so there’s no tank to keep hot all day. As of October 2026, ENERGY STAR says a certified gas tankless water heater saves a family of four about $95 a year, or $1,800 over its life, compared with a standard gas storage tank. It also lists a life expectancy of 20 years. The catch is a higher upfront price.
Jump to: 🏠 How it works · 💲 Savings · 📸 Sizing · ⏱️ Downsides · 🤝 Buying and selling · ❓ FAQ
Key takeaways
- ENERGY STAR: about $95 a year in gas savings for a family of four versus a standard gas tank, or $1,800 over the unit’s life.
- Versus a non-certified gas tankless model, a certified one saves about $20 a year, or $300 over its life.
- ENERGY STAR gives tankless heaters a 20-year life expectancy, longer than any conventional tank model.
- In NAR’s 2025 remodeling report, 19% of homeowners said energy efficiency was their main reason to remodel.
Older homes often still have a big storage tank in a closet or garage. It keeps 40 or 50 gallons hot around the clock, whether anyone’s home or not. Tankless systems skip that. The words get mixed up, though, so let’s sort out the terms before we talk about money.
What is a tankless boiler, and how is it different from a tankless water heater?
A tankless water heater makes hot water for your taps, showers and appliances. Cold water runs through a heat exchanger, a gas burner or electric element heats it on the spot, and it comes out hot. When you shut the tap, the unit shuts off. That’s the “on demand” part.
A boiler heats water to warm the house, through radiators or floor tubing. A combination or “combi” boiler does both jobs in one wall-mounted box: space heat and on-demand hot water, with no separate tank. In the UK and much of Europe, “boiler” usually means a combi. In most US homes, you’ll hear “tankless water heater” instead, and heating comes from a furnace or heat pump.
So which one do you need? If your home has radiators or radiant floors, a combi boiler can replace both the old boiler and the water tank. If you have forced-air heat, you only need a tankless water heater. For a closer look at the technology, Clear Flow Water Solutions explains how Tankless heaters work and why they cost more upfront.
How much can a tankless water heater save?
The honest answer is less than some ads suggest, but real. ENERGY STAR’s figures for certified gas tankless models are the most useful benchmark we found:
| Compared with | Yearly gas savings, family of four | Savings over the unit’s life |
|---|---|---|
| Standard gas storage water heater | About $95 | About $1,800 |
| Conventional (non-certified) gas tankless | About $20 | About $300 |
Savings come from not keeping a tank hot all day. That waste is called standby loss. ENERGY STAR also notes the space you get back: tankless units are small and hang on a wall, and outdoor models free up even more room in a garage or utility closet. You lose the risk of a tank leak, too, which matters a lot in a second-floor laundry or a finished basement.
Your own number depends on how much hot water you use and what you pay for gas or power. A couple in a small condo will save less than a family of five with teenagers. For more ways to cut heating bills, HuffPost’s older contributor piece lists habits that can save you a lot of money on energy bills, and our guide to keeping your house warm during cold weather covers the rest of the house.
How do you size a tankless water heater?
Tankless units are sized by flow, not by gallons stored. You add up the fixtures that might run at the same time, then pick a unit that can heat that much water fast enough. Your installer will also look at how cold your incoming water is. In Miami, groundwater is warm most of the year. In Chicago or Detroit, winter water comes in much colder, so the same unit delivers less hot water per minute.
A simple way to think about it: picture your busiest five minutes. Two showers and the dishwasher on a school morning? That’s your target. If the unit is too small, the water turns lukewarm when a second shower starts. Some homes use two smaller units, one near the bathrooms and one near the kitchen, so hot water arrives faster too.
Gas units need proper venting and often a larger gas line. Electric units may need a bigger electrical panel. Both can add real money to the install, so get two or three written quotes. If you’re comparing against a new tank, read 4 Facts You Should Know Before Buying A Water Heater and our side-by-side, Tank vs. Tankless: Which Water Heater Saves More in the Long Run?.
What are the downsides of a tankless system?
We’d weigh four before buying.
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Buy a home →- Upfront cost. The unit and install usually cost more than a tank, and venting or gas-line work adds to it.
- Flow limits. A unit sized too small can’t keep up when several taps run at once.
- Maintenance. In hard-water areas, the heat exchanger needs a periodic flush to clear scale.
- A short delay. Hot water still has to travel through the pipes, so the first few seconds at a far tap are cold, as with a tank.
None of these is a deal-breaker for most homes. They’re just why the payback can take years. With a 20-year life, as ENERGY STAR lists, a unit has time to earn back its premium, especially if your old tank needs replacing anyway. Upgrading at the moment the old tank fails is usually the cheapest time to switch.
For other upgrades that cut bills, Energy Efficiency 101: 4 Things To Start Replacing At Home is a good next read.
Does a tankless water heater help when you buy or sell a home?
It’s a selling point, not a price jump. Buyers like hearing “tankless, installed 2023, serviced yearly.” It tells them one big-ticket item won’t need replacing soon. Energy matters to owners too: in NAR and NARI’s 2025 Remodeling Impact Report, 19% of homeowners named improving energy efficiency as their main reason to remodel.
If you’re selling, put the unit’s age, brand and fuel type in the listing and keep the install permit and service records handy. A home inspector will check the venting and the date on the label. Our list of 6 Ways You Can Increase The Value Of Your Home shows where an upgrade like this fits. When you’re ready, Beycome lists on the MLS in 17 states and DC for a flat fee: Basic $99 or Enhanced $399, $0 at closing. Concierge brings experts for full support while you stay in control, at $1,399. Basic is $129 in California and Illinois.
If you’re buying, ask the age of the water heater and whether it’s tank or tankless. Our guide to inspecting pre-installed appliances when buying a house has the checklist. Buying a home listed by an agent? The Beycome buyer program is open to every buyer on homes listed by other agents (the commission credit can’t apply where no buyer-agent commission is offered, like most FSBO homes, or on homes listed by Beycome sellers). There’s no upfront fee; Beycome keeps 1% of the price, minimum $1,499, and credits the rest at closing, with lender approval.
Tankless boiler and water heater questions
How much does a tankless water heater save per year?
ENERGY STAR says a certified gas tankless model saves a family of four about $95 a year versus a standard gas storage tank.
How long does a tankless water heater last?
ENERGY STAR lists a life expectancy of 20 years, longer than any conventional tank water heater.
What is the difference between a combi boiler and a tankless water heater?
A combi boiler heats your home through radiators or floor tubing and also makes on-demand hot water. A tankless water heater only makes hot water.
Can a tankless water heater run out of hot water?
It won’t run out the way a tank does, but a unit sized too small can’t keep up when several fixtures run at once, so the water turns lukewarm.
Do tankless water heaters need maintenance?
Yes. In hard-water areas the heat exchanger should be flushed periodically to clear scale. Follow the maker’s schedule.
Does a tankless water heater add value to a home?
It’s a selling point more than a price increase. List its age and service records so buyers know it won’t need replacing soon.
Savings and life expectancy per ENERGY STAR, Save More with ENERGY STAR Gas Tankless Water Heaters. Remodeling figures per NAR and NARI’s 2025 Remodeling Impact Report news release (April 9, 2025). Both read October 28, 2026. Sizing and maintenance notes are common practice; ask a licensed installer for your home. General information only.
Beycome prices as of October 2026. “$0 at closing” means no Beycome fee at closing; other closing costs still apply. Buyer credit: minimum $1,499, lender approval, not on FSBO homes or homes listed by Beycome sellers.
Sources
- ENERGY STAR, Gas Tankless Water Heaters: Benefits and Savings, read October 28, 2026.
- NAR, 2025 Remodeling Impact Report news release, read October 28, 2026.
- HuffPost, Top Tips to Save on Gas Heating Bills (linked above), read October 28, 2026.
- Clear Flow Water Solutions on Medium, Tankless Water Heaters (linked above), read October 28, 2026.
- Beycome, listing package features, October 2026.
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