Why does a tankless water heater cost more than a tank water heater?

A traditional tank water heater is the most common type in the United States and Canada. These tank heaters use older, less efficient technology to gradually heat cold water at the bottom of the large tank. That means that the water in the tank is constantly being heated, waiting for the moment when you need it. Rather than storing water, tankless water heaters use heating coils to heat on demand as you need it. Tankless water heaters are more energy efficient, use less physical space and provide technology not typically available with tank water systems.   

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