If your current water heater is aging or struggling to keep up with your household’s needs, you may be wondering whether it’s time for an upgrade—and whether a tank or tankless hot water heater is the better option.

With energy efficiency top of mind for many homeowners, tankless systems are becoming increasingly popular across Ontario.

In this guide, the team at Comfort Zone Services will break down what a tankless water heater is, how it works, and the biggest advantages of choosing tankless hot water versus tank systems.

We’ll also cover costs, installation considerations, and whether you can replace a traditional hot water heater with a tankless unit in your home.

What is a Tankless Hot Water Heater?

A tankless water heater, also known as an on-demand water heater, heats water only when you need it. Unlike traditional tank-style units that store 30–80 gallons of hot water, tankless systems heat water instantly as it flows through the unit.

Because there’s no storage tank, you don’t run out of hot water, and you don’t waste energy keeping water hot when it’s not being used.

How Does a Tankless Hot Water Heater Work?

So, how does a tankless hot water heater work?

When you turn on a hot water tap, cold water flows through the unit. Powerful heating elements (electric or gas-powered) heat the water instantly before delivering it to your faucet or appliance. Once the tap is turned off, the system shuts down. This means no standby heating and no wasted energy.

This on-demand process is what makes tankless systems more efficient than traditional tanks.

The Benefits of a Tankless Water Heater

1. Endless Hot Water

One of the biggest advantages of a tankless water heater is continuous hot water. With a tank system, once the stored hot water is used up, you’re stuck waiting for it to reheat.

Tankless systems don’t have this limitation. As long as the system is properly sized and you don’t exceed its flow-rate capacity (typically 2 to 5 gallons per minute, though some Rheem tankless units go up to 9.5 gallons per minute), you can take back-to-back showers, run the dishwasher, and do laundry without running out of hot water.

2. Improved Energy Efficiency

Tank-style heaters constantly reheat stored water, even when no one is home. Tankless systems eliminate this standby heat loss.

According to Natural Resources Canada, ENERGY STAR® tankless water heaters are 30% more energy efficient than traditional tank water heaters, on average.

Over time, this can result in significant savings on your energy bills, especially for households with moderate hot water usage.

3. Longer Lifespan

Traditional hot water heaters typically last 10 to 15 years. Tankless units often last 20 years or more with proper maintenance.

Because they don’t store water, tankless systems experience less corrosion and internal wear. This makes them a smart long-term investment for Ontario homeowners.

4. Space-Saving Design

Because tankless units are, well, tankless, they’re compact. They’re usually about the size of a small suitcase and mounted on the wall. This makes them ideal for smaller homes, condos, and properties where space is limited.

If you’re considering hot water heater replacement in London, keep in mind that tankless options can free up valuable storage space in basements or utility rooms.

5. Lower Risk of Water Damage

A failing tank water heater can leak dozens of gallons of water into your home. Tankless systems don’t store water, which significantly reduces the risk of major leaks and water damage.

This is especially important for finished basements and multi-level homes.

6. Flexible Fuel Options: Gas or Electric

Homeowners in Ontario can choose between:

Gas tankless water heaters (faster heating, higher output)
Electric tankless water heaters (lower upfront cost, ideal for smaller homes)

Gas units generally provide higher flow rates, while electric models work well for condos or point-of-use applications.

7. Lower Long-Term Costs

Many homeowners ask:

How much is a tankless hot water heater?
How much is a hot water heater compared to tankless?

Here’s a general comparison:

Traditional tank heater:
$900–$1,500 installed
Tankless water heater:
$3,000–$5,000+ installed (depending on complexity and upgrades)

While the upfront cost is higher, tankless systems often save money over time through:

Lower energy bills
Fewer replacements
Longer warranties

Over 15–20 years, tankless systems can be more cost-effective.

8.Ideal for Modern Homes & Energy-Conscious Homeowners

Tankless systems pair well with modern, energy-efficient homes. They’re beneficial if you:

Want lower monthly energy costs
Plan to stay in your home long-term
Are upgrading multiple systems at once
Value sustainability

Tankless Hot Water Versus Tank: Which Is Better?

The answer depends on your home and lifestyle.

Choose a tank water heater if:

You need the lowest upfront cost
You have an older home that can’t support electrical or gas upgrades
You use large volumes of hot water at once

Choose a tankless water heater if:

You want endless hot water
Energy efficiency matters
You want a longer-lasting system
Space is limited

Can You Replace a Hot Water Heater With a Tankless System?

Yes, you can replace a hot water heater with a tankless system, but installation requirements vary.

Some homes may need upgrades to pipes, water lines, electrical systems, and/or gas lines to support a tankless water heater.

A professional assessment ensures a tankless system is the right choice for your home and that your system is sized correctly and installed safely.

Hot Water Heaters in Ontario: What to Know

Ontario homes vary widely in size, water usage, and infrastructure. That’s why choosing the right system and installer matters.

At Comfort Zone Services, we assess:

Household size and water usage
Electrical capacity or gas availability
Water quality (hard water considerations)
Budget and long-term goals

Final Thoughts: Is a Tankless Hot Water Heater Worth It?

Tankless water heaters offer:

Endless hot water
Energy savings
Longer lifespan
Space efficiency
Reduced water damage risk

While they cost more upfront, many Ontario homeowners find the long-term benefits outweigh the initial investment.

Need Hot Water Heater Replacement in London, ON?

Comfort Zone Services installs and services all types of hot water heaters in London, Ontario and the surrounding areas.

Our licensed technicians will help you determine whether a tank or tankless hot water heater system makes the most sense for your home.

If you’re ready to explore hot water heater replacement in London, contact Comfort Zone Services today to schedule a free in-home estimate!

8 Advantages of a Tankless Water Heater