Gas vs Electric Tankless Water Heater: Which is Best?

Gas vs Electric Tankless Water Heater

Gas vs electric is often one of the first questions a potential buyer asks when choosing a new tankless water heater. However, the decision between which type of fuel you select for your new water heater may not be an option. Many areas are not fortunate enough to have both gas and electricity to choose from, and therefore must purchase the only option available. Although, if you are lucky enough to have the choice, there are a few things you should consider.

The 3 most common fuel sources for tankless water heaters are electricity, natural gas and propane. An electric tankless water heater is a completely different design  than gas models. However, a gas unit is designed to burn either natural gas OR propane. Other than the type of fuel used, natural gas or propane, the units operate much the same. Most manufactures offer both a natural gas and a propane model.

Gas vs Electric Tankless Water Heater: Which is the Better Choice

There really isn't a simple answer to the question of which is best. Both gas and electric water heaters are good choices and both have their own specific set of strengths. Each household has it's own unique circumstances, what is a perfect match for your neighbor, may not be a good fit in meeting your needs.

Selecting which type of tankless to purchase is a critical decision that should be based on your household hot water demands, budget, installation opportunities and personal preferences. We highly recommend consulting with a professional that can give you specific guidance for your individual situation.

Gas vs Electric Tankless Water Heater: What to Consider 

Initial Price

Gas Tankless Water Heater
  • A quality gas tankless water heater can easily run over $1,000. The more "bells and whistles" you select, the higher the price.
  • Non-condensing units are less expensive to purchase, however, they are also more expensive to install. This is largely because of the venting requirements.
  • Condensing units eliminate the need to vent altogether. These units have a more sophisticated design and therefore, are more expensive.
Electric Tankless Water Heater
  • An electric tankless water heater is significantly less expensive than gas units. A quality electric unit can be purchased for $500.

Installation

We highly recommend hiring a qualified professional to install your new water heater. It's critical that it's installed correctly, both from a safety and results standpoint. A tankless water heater is a major investment and spending the money to have it properly installed is a worthwhile expense.

Gas Tankless Water Heater
  • Gas tankless units are far more complicated and expensive to install.
  • Non-condensing gas tankless water heaters require a complex venting system that provides adequate air flow for combustion as well as expensive category III venting material made from stainless steel.
  • A home's existing venting ducts and gas lines are seldom compatible with a gas tankless water heater.
  • There often are costly home modifications necessary to accommodate for the venting and gas requirements.
Electric Tankless Water Heater
  • Electric tankless water heaters are much easier to install, and easier generally means less expensive as well.
  • Electric units are much smaller than gas water heaters. They are usually about a third the size.
  • Since there is no gas combustion, an electric unit doesn't require ventilation. Not only does this significantly reduce the installation costs, but it also provides flexibility as to where these units can be installed. 
  • Electric units are less complex, and because they are so much smaller than gas tankless water heaters they can be installed in closets and other out-of-the-way spaces. This is a particular advantage for new home construction where the unit's electrical requirements can be planned.
  • If upgrading your home's power is not necessary, an electric unit is very easy and inexpensive to install.

Operating Costs

​There are 2 main components that make up the overall operating costs of a tankless water heater, the cost of the fuel and how efficiently the unit uses the fuel.

Fuel Cost

  • Currently gas prices are lower than electricity in most area. This makes the overall operating costs less expensive for a gas tankless unit.
  • Fuel prices vary in different regions. In some areas the price of gas is much higher than electricity.
  • Gas prices are more volatile and fluctuate more dramatically than electricity prices.
  • Gas prices are expected to increase in the future. Most economists agree that electricity prices should remain relatively stable, while gas prices will likely increase significantly.

Efficiency

  • ​The efficiency rating of a water heater is based on the amount of hot water produced by a single unit of fuel.
  • The more efficient a particular tankless unit, the less fuel is wasted when producing hot water.
  • Electric tankless water heaters are far more efficient than gas tankless units which helps offset the higher price of electricity. 
Gas Tankless Water Heater
  • Gas tankless water heaters generally achieve 80-85% efficiency.
  • Currently the price of gas is lower than electricity, making gas units less expensive to operate. However, with fuel fluctuations and the improved efficiency of an electric tankless water heater this may not always be the case.
Electric Tankless Water Heater
  • Electric tankless heaters consistently achieve an efficiency score in the 98-99% range.
  • Many regions experience extremely high gas prices, making an electric tankless less expensive to operate over a gas unit.
  • Even with higher electricity costs the efficiency of an electric unit will offset the higher fuel prices.

Hot Water Needs

Tankless water heaters measure their output in terms of flow: How many gallons per minute (GPM) a unit can deliver.​ As a general rule, 8 GPM is enough hot water for the average family, but it's important to evaluate your specific household's hot water needs. There is nothing worse than running short of hot water . . . especially in the middle of a morning shower!

Colder regions will have a lower GPM flow rate than warmer regions. This is because the incoming water will be cooler and the tankless water heater will need to work harder in order to heat the water to the desired output temperature. In the gas vs electric debate, the gas unit often performs better, especially when larger amounts of water is needed. 

Gas Tankless Water Heater
  • Gas tankless water heaters are capable of delivering more hot water (over 8 GPM) than electric heaters.
  • A gas tankless unit may be a better fit for a household with a large family that has a high demand for hot water. 
Electric Tankless Water Heater
  • An electric tankless water heater is capable of delivering 8 GPM of hot water.
  • Both electric and gas units output GPM is affected by the incoming water temperature.

Maintenance

Gas Tankless Water Heater
  • Gas tankless water heaters require more maintenance than electric units.
  • A gas unit should be inspected annually by a licensed technician who will make sure that the fuel is combusting safely and the unit is performing properly.
  • Because gas units are prone to mineral scale build-up, they need to be flushed on a regular basis. 
  • The water inlet screen should be cleaned on a regular basis to remove any debris.
  • General maintenance tasks can be completed by the homeowner, but many choose to hire a professional.
Electric Tankless Water Heater
  • Electric tankless water heaters require nearly no maintenance other than cleaning the inlet screen filter occasionally.

Warranty & Service Life

 A traditional water heater will eventually begin leaking and need to be replaced, but a tankless unit is built to last. Because they are designed to be repaired, the unit's parts can be replaced as needed. A typical tankless water heater service life is about 20 years regardless if it's gas vs electric.

Service Life Factors:

These Factors Can Impact Your Tankless Water Heater's Service Life

  • Acidic Water - When water is too acidic it will break down the heat exchanger and plumbing within the water heater. It is also unhealthy and hard on your home's plumbing and other appliances. In most cases, acidic water is already treated prior to installing a tankless, but in the case of new home construction​ it is an important issue to address.
  • Hard Water - Water that contains high levels of minerals will cause a gas tankless to build scale within the unit at a faster rate. A whole house water softener can be installed or simply performing more frequent flushings will resolve the problem. Keep in mind that is will still be necessary to complete the annual maintenance tasks.
  • Installation - Correct installation is key to getting the most from your new tankless water heater. A qualified professional will help you determine the best type of heater to purchase, correctly size the unit, and ensure that the gas pipes or electrical requirements and venting match the units needs.
  • Maintenance - Performing annual maintenance is critical to extending the service life of a tankless water heater. Gas units need to be flushed to remove the scale build-up. If scale is not removed the efficiency of the unit will drastically decrease and the system's life expectancy will drop considerably.
Gas Tankless Water Heater
  • Gas tankless water heaters are designed to last 20 years.
  • Gas units are more difficult to service because they have a complex heat exchanger.
  • Warranties vary, but it's common to see a 10 year warranty for a heat exchanger, 5 years for other parts, and 1 year for labor.
  • Service life can be negatively impacted if the unit is not serviced on a regular basis.
Electric Tankless Water Heater
  • Electric tankless water heaters often exceed a 20 year lifespan because of the simplicity of their design.
  • Warranties vary, but parts are typically covered for 5 years and labor for 1 year.
  • When problems occur, an electric unit is easier to troubleshoot, diagnose and repair.

Homeowners Preference

Gas Tankless Water Heater
  • A gas fueled tankless water heater can be a good choice for homeowners who want to improve the energy efficiency of their traditional water heaters.
  • There are models that offer larger GPM options to meet a household with high hot water needs.
Electric Tankless Water Heater
  • From a safety standpoint, some homeowners are more comfortable with an electric tankless water heater.
  • Many are uncomfortable using natural gas or propane for home appliances in the event of a natural disaster.
  • Homeowners are frequently interested in electric units for environmental reasons. Since these units are extremely energy efficient, do not use fossil fuels or release greenhouse gas emissions.

Fuel Source Options

Gas Tankless Water Heater
  • Currently gas prices are lower than electricity prices. However, fuel prices fluctuate from region-to-region.
  • There is no guarantee that gas prices will stay lower than electricity prices. In fact, most economists agree that gas prices will likely increase in the future.
Electric Tankless Water Heater
  • Electricity prices fluctuate less than gas prices.
  • An electric tankless water heater uses a substantial amount of electricity to heat water. They are a high power appliance and it's not uncommon for homes, particularly older homes not to have the necessary electrical power available. In most cases a power upgrade can be done, but this will significantly add to the installation costs.

Environmental Impact

Gas Tankless Water Heater
  • A gas fueled tankless water heater is more energy efficient than a traditional water heater. They often reach the mid-80% range in efficiency.
  • Gas units emit greenhouse gases into the atmosphere.
Electric Tankless Water Heater
  • Electric tankless water heaters are extremely energy efficient, usually reaching 98-99%.
  • Electric units do not burn fossil fuels or release greenhouse gases into the environment. 

Conclusion 

Gas or Electric Tankless Water Heater

In the end, there's not a one-size-fits-all in the gas vs electric debate. Each homeowner has specific needs and therefore should draw their own conclusions. Many professional technicians feel that the electric tankless water heater is an excellent choice. They are less expensive, easier to install, and require minimal maintenance. Due to their simplistic design, there isn't a need for an annual inspection by a qualified professional, which will not only save you money but also contribute to a longer service life!

Gas tankless water heaters are also an excellent choice, especially if your household's hot water needs are higher than average. However, they are more difficult to troubleshoot and service in the field, largely because they have a complex heat exchanger. 

​We do not recommend switching fuel sources. If your home is currently using an electric water heater the expense of retrofitting your house for a gas-fueled tankless may be prohibited. But it's important to note that even staying within your current fuel source may require costly power upgrades and modifications.

Tankless water heaters are gaining in popularity and are an excellent choice that will serve your home for several decades. The expense of transitioning to tankless can be costly, so it's a good idea to speak with a professional who can help you make the best decision for your individual situation.



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