This unit includes a large container (the tank) that is installed in the home. Its job is to heat and maintain the water and keep it at a constant temperature. The heaters are available in all sizes, starting at just 25 gallons. They can be fueled by electricity, propane, oil, and gas.

The system works by heating the cold water that comes into the home to the desired temperature and stores it until demanded. This system works 24/7, which means there is always hot water available.

A tankless heater is installed on the wall. These are smaller since they are not designed to store the water inside. Instead, the pipes that supply the water move through the unit, and it is heated on demand.

Usually, these units run on propane; however, some models use electricity. When no water moves through the unit, they are in standby mode, which means they are not using any fuel or heating up the water.

Since tank-style heaters will run continuously, they are using energy all the time. If someone goes out of town for a few days and does not use any hot water, the tank is still heating the water and using energy.

Some tank-style heaters have also been set to heat water to a higher temperature than what most people really need, which means they use even more energy. While the temperature can be reduced manually, water heaters use a constant energy supply.

A tankless heater only comes on when water moves through it, which means they use much less energy overall. These do not use a constant energy supply, but they require more energy when they are operating.

Of the two models, the tank-style unit is much easier to install. It takes just a few minutes to put the heater in the proper position and connect the fuel and water supply. Since the tank is typically found in a utility closet, basement, or another easy-to-reach area, the installation is not considered difficult or invasive.

A tankless heater has a much more complicated installation process. It is installed inside the walls; the pipes must be spliced and then connected on both sides.

A tank-style water heater is typically priced for its size. If the home has three to four people living there, a 50-gallon tank is needed, which can cost around $500 for a gas-powered option. A homeowner must also take into account the installation cost.

A tankless unit will usually cost more to install but has similar purchase prices. While the final cost of a standard tank unit may be upwards of $700 with installation, a tankless unit can cost up to $1,500, sometimes more.

The standard, tank-style unit will last for around 10 to 12 years. The main reason it does not last as long is because of poor water and sediment. As time passes, corrosion caused by mineral buildup and constant water wears away the valves and the tank's base.

With regular draining and cleaning the sediment at the bottom of the tank, it can help prolong the unit's lifespan.

A tankless unit lasts, on average, 20 to 30 years when it is properly maintained. Since they are not continually exposed to standing water, the tank will not corrode or experience the same sediment issues at the base that standard tanks do.

However, more mineral issues may arise. Hard water can cause severe problems for any tankless unit, which means that proper maintenance is essential.

A massive problem with a standard storage-style tank is that it will heat and then maintain the water inside, and once the water is used, a person must wait for it to fully refill and reheat the new water before more is available.

If a house has a 50-gallon heater and people in the house take several showers back-to-back, they will have to wait for the unit to refill and reheat before having more hot water. The best option for solving this is purchasing a bigger tank than what is usually used in one day.

A tankless unit will not run out of water because it will heat the water as it enters the system. As long as there is freshwater entering the system, the homeowner will have an ongoing hot water source.