Compare Hybrid Water Heaters Vs. Tankless To Find The Best For Your Home

Buying a new water heater shouldn’t be hard.

But it is.

With a multitude of options available, it can be overwhelming to choose the right one. To simplify the process, we will focus on comparing hybrid water heaters vs. tankless water heaters, two of the most efficient and popular heating devices.

By exploring their features and benefits, we aim to help you make an informed decision and find the best water heater for your needs.

Why is it important to carefully consider your options when buying a new water heater?

Well, water heating happens to be the second-largest energy consumer in most North American households, responsible for a significant portion of utility bills (14-18% according to the US Department of Energy).

With such a substantial impact on both energy consumption and costs, it becomes crucial to select a water heater that is not only energy-efficient but also durable, reliable, and cost-effective.

Hybrid Water Heaters Vs. Tankless: How They Work

Tankless and hybrids are different. 

Tankless are small and tank-less, heating water on demand, while hybrids, which look like regular water heaters, use large water storage tanks to store, heat, and reheat the water.

How Hybrid Water Heaters Work

Hybrid water heater
Rheem Prestige heat pump (photo:

Hybrid water heaters, also known as heat pump water heaters, utilize two methods to heat water; electric heating elements and a heat pump. They share similarities with regular electric units that have storage tanks, but they have a taller and wider design, requiring more floor space.

The heat pump, comprising the compressor, evaporator/condenser coils, fan, and refrigerant, is installed on top of the electric unit. Instead of generating heat, it transfers heat energy from the surrounding air to heat the water. Essentially, it functions in reverse as a refrigerator does.

Hybrid water heaters operate on electricity, utilizing either a heat pump, heating elements, or both, which enhances their power and performance.

Furthermore, hybrids often offer multiple heating modes, allowing the unit to heat water in the most efficient manner or with the highest recovery rate. The selection of the mode depends on the specific needs of the household.

Related: Hybrids vs. gas water heaters

How Tankless Water Heaters Work

Tankless water heater (photo:

Tankless water heaters are designed to heat water only when needed, providing an endless supply of hot water. They can operate on natural gas, propane, and electricity. If you have access to natural gas, installing a tankless is more cost-effective due to the lower fuel expenses.

Gas tankless water heaters utilize a modulating gas burner to heat water as it passes through the heat exchanger, using precisely the amount of heat energy required.

Modern tankless units incorporate numerous sensors and controllers, including a computer chip, for precise, safe, and advanced control, resulting in improved comfort and energy savings.

Related: Benefits of tankless water heaters

Hybrid Water Heaters Vs. Tankless – Comparing Costs

When compared to regular water heaters, both hybrids and tankless water heaters have higher initial costs and lower operating costs.


According to, Rheem hybrid waters can cost you from $1600 for the 40-gal model to approximately $2800 for the 80-gal model.

The prices of Stiebel Eltron hybrid water heaters fall within the range of $2500 to $2600 for the 60-gallon and 80-gallon models, respectively.

Furthermore, in addition to the purchase price, hybrid water heater installation can incur labor and materials costs ranging from $1500 to $4400.


Proofread version: The purchase price of a gas-powered tankless water heater ranges from $600 to $2400, excluding installation costs. The price can vary based on the brand, type, and model.

For instance, if you opt for a Rinnai model, the price will range from $600 to $2400. Rheem models range from $800 to $1500, and Noritz models range from $1400 to $2200.

According to, the average cost for professional installation is around $2300, with labor rates that can reach up to $150 per hour.

Selecting A Water Heater – Things To Consider

Determining the size of your water heater is crucial. An undersized unit will not provide sufficient hot water for your needs, while an excessively large unit can result in unnecessary costs and premature malfunctions.


Before purchasing a hybrid water heater, it is essential to consider the following factors:

  • First-hour rating
  • Energy factor
  • Warranty
  • Price


To ensure your tankless water heater meets your household’s needs, it is important to select the appropriate size. Consider the following factors:

  • Determine the number of devices that will require hot water simultaneously.
  • Calculate the total flow rate by adding up the individual flow rates of all appliances and fixtures that will use hot water during peak demand. This is closely related to the number of devices mentioned above.
  • Take into account the temperature rise required. You can refer to a regional groundwater temperature map to determine the temperature in your area.

Comparing Hybrid Water Heaters Vs. Tankless: Benefits

Hybrid Water Heaters

  • Hybrids can heat water with remarkable efficiency, often exceeding three to four times the efficiency of electric or gas tank-type water heaters.
  • In addition to water heating, hybrids can also cool and dehumidify the surrounding air.
  • Since they look almost the same as electric type and have similar connections, they are also easy to install, service, and maintain.
  • Cheaper to install.
  • They perform very well in warmer climates, reducing the amount of energy and money you spend to heat water.
  • Fast return on the investment, which can go as little as three years.
  • Hybrids come with tax incentives and rebates.

Tankless Water Heaters

  • Tankless heat water on demand saving homeowners a lot of energy and water.
  • Due to their powerful gas burners, tankless heat water very fast.
  • They deliver hot water continuously and in an endless supply.
  • Some models utilize recirculation systems for instantaneous hot water delivery.
  • They are small, making them easy to handle and install.
  • Advanced electronics and diagnostics provide better comfort, accuracy, and control.
  • Tankless can be installed indoors or outdoors.
  • Every component can be replaced.
  • They often come with long warranties of 15 years.
  • Tankless can operate for over 20 years.
  • Tax incentives and rebates are available for the energy-efficient models.

Hybrid Water Heaters vs. Tankless: Disadvantages


  • Since hybrids utilize storage tanks with limited capacities, they can always run out of hot water.
  • Hybrids are big, requiring a dedicated room and floor space.
  • If they develop a tank leak, the whole unit must be replaced.
  • Hybrids are still subjected to sediment build-up and rotten egg smell as any regular water heater.
  • Not performing well in cold climates.
  • Hybrids require a certain amount of surrounding air to operate correctly.


  • Expensive to buy and install.
  • Tankless costs more to install than hybrids.
  • Safety issues due to potential gas and exhaust leak.
  • Tankless are prone to hot water temperature fluctuation or “cold water sandwich.”
  • Due to their powerful gas burners and electric blower, tankless can be noisy.

So, Should I Buy A Hybrid Water Heater Or Tankless?

If your household has a high demand for hot water, consider purchasing a tankless water heater. With its on-demand heating and endless supply of hot water, you can be assured that you won’t run out of hot water, unlike tank-type heaters such as hybrids.

As mentioned earlier, hybrids use heat from the surrounding air to heat water, resulting in lower operating costs and increased savings. They perform exceptionally well in warmer climates and consume minimal energy. If you only have access to electricity, reside in a warmer region, and have sufficient space for installation and air circulation, a hybrid water heater is a suitable choice.

Both hybrids and tankless water heaters are environmentally friendly since they heat water with high efficiency and produce fewer exhaust gases. Additionally, their efficiency may qualify you for rebates and grants, resulting in additional savings.

If safety is a top priority, it’s worth noting that a gas tankless water heater may not be the best option due to potential risks such as carbon monoxide and gas leaks.

To determine the best water heater for your specific needs, it is advisable to contact a water heater expert.

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