Heat pump water heaters are, on average, significantly more efficient than tankless water heaters. However, they require quite a bit of room, generate quite an amount of noise, and do not provide rapid hot water. Tankless water heaters, on the other hand, consume significantly more energy but provide an instant, steady supply of hot water.
In naturally warmer climates, heat pump water heaters are more effective. The warmer the air, the more efficiently the heat pump can heat the water without the use of energy. While they can be effective in colder regions as well, they perform better in warmer climates.