Tankless water heaters heat water on demand eliminating standby energy loss and lasting up to 20 years. Traditional tank heaters store 40 to 80 gallons cost less upfront and provide reliable hot water for simultaneous uses. Tankless units save 20 to 30 percent on energy bills but cost 2 to 3 times more to install. Tank heaters work well for large families while tankless suits smaller households. Consider your hot water demand budget and available space.