Tankless water heaters present a few notable downsides despite their high energy efficiency and space-saving wall-mounted design. The most significant drawback is the substantially higher upfront equipment and professional installation cost compared to traditional storage tanks, often requiring complex gas line or heavy electrical service upgrades. Additionally, tankless units require strict annual maintenance to prevent hard water mineral scale buildup, can suffer from minor temperature fluctuations during intermittent use, and have strict maximum flow rate capacities.
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