Tankless water heaters are typically more efficient than tank type heaters, although new tank heaters have made improvements in the efficiency department in comparison to models of years past. Exactly how much more efficient a tankless water heater is than a tank type heater depends on the amount of hot water you use in your home. According to Energy.gov, “for homes that use 41 gallons or less of hot water daily, demand (or tankless) water heaters can be 24% to 34% more energy efficient than conventional storage tank water heaters.”