Whether you're buying your first tankless water heater or replacing an older one, there's a lot to consider. You'll need to know if a gas or electric fueled system is best for your home; the amount of hot water you'll need during your peak hour; and whether your house can even accommodate a tankless water heater. Plus, you'll need to figure out how to get it installed.
Don't be overwhelmed. These are only a few of the questions we'll help you answer in our tankless water heater buyers guide. Doing the proper research goes beyond which make and model to purchase, and our tankless water heater buyers guide will help you gain the information you need to select the right appliance for your home. By the end, you may even know more than the salesman!
Tankless water heaters have become increasingly popular largely due to their energy efficiency and compact design. And since they heat and deliver hot water only when it's needed, you may hear them referred to as on-demand water heaters.
The ability to deliver hot water on-demand means, that unlike a traditional tank-style water heater, tankless systems aren't limited by the size of their tank.
In fact, this allows a tankless water heater to deliver a seemingly endless stream of hot water!
Consumer Favorite Gas Tankless Water Heaters
How Tankless Water Heaters Work
In the simplest of terms, when a hot water tap is opened, cold water runs into the tankless water heater.
As the water flows into the unit, an electric heating element (or gas burner) jumps into action and heats the water.
By the time the water exits the tankless water heater, it's hot and ready to be used.
When the hot water tap is closed, the cold water entering the system is shut off, and the electric heating element (or gas burner) shuts down. Leaving the appliance to idly wait until another hot water tap is opened.
Watch the Video
Tankless water heaters operate entirely differently than tank-style heaters.
The fundamental difference is that traditional tank-style water heaters store hot water in a tank which requires energy to keep the water hot until it's needed.
Where a tankless water heater operates only when there's a demand for hot water.
Let's take a closer look at each:
Tankless Water Heaters
Tank-Style Water Heaters
Heats water on-demand
Heats and stores water in a tank for later use
Large up-front investment / Modifications are often required for installation
Economical in both purchase price and installation
Eco-friendly and energy efficient
Energy is used even when there isn't a demand for hot water
Compact design / Mounted on wall
Floor space is required
Proper sizing is critical
Storage capacity typically ranges from 20 to 80 gallons
Service life can exceed 20-years if properly maintained
Service life is typically 8 to 12-years
Tankless Water Heater Advantages
There's a lot of advantages to owning a tankless water heater. Let's take a look at a few:
- Energy Savings / Operating Costs - Hot water is delivered on-demand which nearly eliminates standby heat loss. Tank-style water heaters hold the water within a tank where it is heated and re-heated until needed.
- Replaceable Parts - Service life is extended in part, because tankless water heaters are designed to be repaired. If a tank-style water heater begins to leak, there's a good chance the entire heater will need to be replaced. However, tankless water heaters are manufactured so that nearly every part can be swapped out with a new one.
- Endless Supply of Hot Water - The length of your shower is no longer determined by the size of your water heater's storage tank. When sized correctly, a tankless water heater will be able to provide your household with an unlimited supply of hot water.
- Fresh Water - Hot water is never sitting in a tank that may contain rust and mineral scale. When hot water is needed, it's heated on-the-spot and delivered immediately.
Tankless Water Heater Disadvantages
As you can see, tankless water heaters have a lot going for them. However they do have drawbacks too. Here are a few of the disadvantages of owning a tankless system:
- Initial Cost - Expect to spend more money upfront when purchasing a tankless water heater. It's not uncommon for these appliances to cost as much as 3x's more than a tank-style water heater by the time you add in installation costs.
- Power Upgrade - Electric tankless water heaters require a lot of electricity to deliver hot water. Many homes, especially older homes, may not be able to support a tankless water heater without upgrading their home's electrical supply.
- Expensive Venting - Non-condensing gas fueled tankless water heaters require expensive category III venting material.
- Output Limitations - If the household's hot water demands are higher than the system's capability, the appliance won't be able to deliver enough hot water. Without the benefit of a storage tank, a tankless water heater is only able to deliver as much hot water as it can heat at any one time. This is why properly sizing a new tankless system is critical.
Tankless water heaters run on either natural gas, propane, or electricity. For this article, we won't differentiate between natural gas and propane fuel sources, as they are basically the same. In fact, most manufacturers offer the same model in both a natural gas and propane version.
However, if you are fortunate enough have both natural gas and propane in your area, you may want to go with the latter. Propane can achieve higher BTU capabilities than natural gas because it's a cleaner and more efficient fuel.
It's fair to say that the bigger question is deciding between gas and electric. We'll hit some highlight differences here, but we recommend reading our in depth article on the topic.
How your tankless water heater is fueled is a critical decision, since it'll impact the appliance's maximum flow rate, energy efficiency, and ultimately determine your annual operating expenses.
Consumer Favorite Electric Tankless Water Heaters
Two of the top price considerations are: the cost of the tankless water heater itself, and the cost of installation.
Gas Tankless Water Heaters
As a general rule of thumb, you can expect to spend more money for a high-quality gas tankless water heater. Quality gas tankless systems start at around $800 to $1,000 and can run significantly higher if you want all the bells-and-whistles.
Although, it's possible to purchase less expensive quality systems, you should always factor in the installation cost before making a buying decision.
We'll dig deeper into the different types of gas tankless systems later, but it is something we need to address in regards to price.
There are 3 different types of gas tankless water heaters available, and how they handle their exhaust will play a large role in the amount of money you spend in installation.
You can expect the following in regards to installation expenses:
Electric Tankless Water Heaters
Electric tankless water heaters tend to be less expensive to purchase and install than gas systems. Most high-quality, high-capacity electric tankless systems fall into the $500 to $700 price range.
In addition, they're less expensive to install. Depending on where you live, you can expect to pay another $1,000 for installation, give or take a few hundred dollars.
Keep in mind that because electric tankless water heaters require a great deal of energy to operate, older homes may need to upgrade their household's electrical system. Which can increase the installation cost significantly.
Energy Savings and Efficiency
One of the main benefits of installing a tankless water heater is the energy savings they offer. However, it's important to note that the efficiency and savings of a tankless water heater decrease as the household's hot water demands increase.
Even so, you can still expect a tankless hot water heater to out-perform a tank-style water heater when it comes to energy savings.
Water heaters, among other appliances, use an Energy Factor (EF) rating to measure the appliance's efficiency.
EF Ratings and Gas Tankless Water Heaters
The EF rating for tankless systems doesn't tell the whole story when it comes to operating costs.
Electric tankless water heaters have a higher EF rating than gas systems, but because gas is currently a less expensive fuel source than electricity, gas tankless heaters tend to deliver a lower annual operating cost.
So in other words, an electric tankless system is more energy efficient, but because electricity is more expensive than gas, a gas tankless water heater is less expensive to operate.
This is why energy savings is just one factor you should consider when buying a tankless water heater.
Gas and electric tankless water heaters both heat and deliver hot water. But that's where the similarities end. Since they each use a different fuel source to operate, it makes sense that they operate and perform entirely differently.
We'll dive into how each operates later, but for now let's take a look their performance.
As we discussed above, a gas tankless water heater is less energy efficient, but are more economical to operate due to the current cost of fuel. But you can also expect a higher output of hot water, which is measured in gallons per minute (GPM) from gas tankless systems.
In a head-to-head comparison, where both a gas and electric tankless water heater heats the water 70°F (temperature rise), a gas system can deliver roughly 5 gallons of hot water each minute (GPM). Where an electric tankless heater will deliver about 2 GPM.
As a general rule, you can expect a gas tankless system to deliver over 2x's the amount of hot water, making them an excellent choice for large family's and households with a high demand for hot water.
All water heaters require maintenance . . . whether we choose to perform the maintenance tasks is another matter.
There's no way to get around it, gas tankless water heaters require more maintenance than electric systems. Let's take a closer look at each:
Gas Tankless Maintenance Requirements
Tankless gas systems are particularly prone to mineral scale build-up. All water contains minerals such as calcium and magnesium, and the higher the concentration of these minerals, the "harder" the water.
As a general rule of thumb, the more minerals within the water, the more rapidly the mineral scale (also called lime scale or scale) will build within your tankless water system.
As the scale builds inside the tankless appliance, the heat exchanger is required to work harder than necessary. Eventually, this could lead to the system overheating and shutting down.
Even if the tankless system doesn't shut down, the scale build-up puts unnecessary stress on the appliance, lowers the energy efficiency, and shortens the service life!
Hard water/mineral scale build-up is the number one enemy of gas fueled tankless water heaters.
So, if you live in an area with hard water, you should flush your tankless heater more frequently. Your owner's manual is always your best resource for maintenance requirements for your specific tankless model.
In addition to regular flushing of scale build-up, a gas fueled tankless water heater should be inspected annually by a trained professional to verify safe fuel combustion and to ensure the system is performing as it should.
Electric Tankless Maintenance Requirements
Electric tankless water heaters require minimal maintenance.
Other than simply cleaning the water inlet screen on a regular basis, and an occasional lime scale flush, these systems generally don't require any additional attention to operate in peak form.
Rheem manufacturers both electric and gas tankless water heaters. This electric tankless system is an outstanding performer and can deliver a flow rate up to 5.9 GPM.
In order to be effective, a tankless water heater requires a quick response time and a high heat output. Gas fueled tankless water heaters can easily deliver both of these requirements.
It goes without saying that a gas fueled tankless water heater requires gas in order to heat water. But the fuel line that supplies the gas must be large enough to provide a sufficient amount of fuel for the larger burners necessary to deliver instantaneous hot water.
Burners on a gas tankless system can have outputs between 150,000 to 200,000 Btu/h. This is considerably higher than traditional tank-style water heaters that have outputs closer to 75,000 Btu/h.
In the case of new home construction, this shouldn't be much of a concern since the higher gas requirement can be taken into account during the planning and building phase.
However, it may be necessary to increase the size of your gas fuel line if you're transitioning from a tank-style water heater to a tankless system. This shouldn't be a deal breaker, but it will increase your installation costs.
Once your tankless system has gas, it needs to ignite the burner to the heat water. As a general rule, the more complex the ignition system, the more expensive the tankless water heater.
However, on the other side, the more simplistic the ignition system, the less energy savings the appliance will be capable of reclaiming.
AO Smith ATO-310-P
AO Smith manufacturers both gas and electric; condensing and non-condensing; and indoor and outdoor tankless water heaters.
The AO Smith ATO-310-P is an outdoor, non-condensing gas tankless system that can deliver up to 8.0 GPM.
Non-Condensing vs. Condensing
There are two types of gas tankless water heaters. What sets the two apart is how they handle their exhaust.
One of the primary concerns with gas on-demand systems is how the combustion exhaust is vented outside. Let's take a closer look at each type:
Non-Condensing Tankless Water Heaters
Non-condensing tankless water heaters are less expensive to purchase, but more expensive to install.
This is because they require a more complex and costly venting system.
Highly acidic condensation is vented from the appliance and builds within the exhaust venting as it passes outside. Standard, less expensive venting material would quickly be eaten away, but category III, stainless steel venting is corrosive-resistant. Although, it's also expensive.
However, there's also more flexibility when venting a tankless water heating system than a tank-style heater. Vents can run through the roof or horizontally through a side wall. But keep in mind this only makes the venting installation more complex.
We highly recommend purchasing a condensing tankless system, if you choose to buy a non-condensing model you'll want to consider the design of the appliances venting. Manufacturers have two different venting design options:
Rinnai is arguably the best of the best when it comes to tankless water heaters. They manufacture both indoor and outdoor gas tankless systems.
The Rinnai RUCS75iN is a condensing indoor tankless water heater capable of delivering up to 7.5 GPM.
Condensing Tankless Water Heaters
Condensing tankless water heaters are more expensive to purchase, but less expensive to install.
These systems extract the heat from the exhaust before releasing it into the venting system. Thus, eliminating the need for expensive venting material and complex configurations.
Most condensing tankless systems achieve energy efficiency ratings (EF) in the mid-to-high 90's, which is much higher than non-condensing tankless water heaters.
Even though condensing tankless water heaters are more expensive to purchase than non-condensing heaters, the higher energy efficiency and lower installation expenses help offset the increased upfront cost. Plus, in the end, you'll almost always have a higher quality water heater.
The video below shows how a condensing tankless water heater works.
Watch the Video
Outdoor Gas Tankless Water Heaters
Outdoor tankless systems are designed to be installed on the exterior of a house. They utilize the free air flow of the outdoors to vent their combustion exhausts.
Because they do not require additional venting, an outdoor tankless system may be the ideal choice if you're transitioning from a tank-style water heater, since installation is frequently easier and less expensive in homes that are already built.
This Rinnai outdoor tankless water heater can deliver 7.5 GPM. It is also available in both propane and natural gas models.
Many outdoor tankless water heaters are designed with self-warming components to help them operate in low temperatures.
However, if you live in a climate that experiences freezing temperatures regularly, an outdoor tankless system may not be your best option. This article will provide you information on how to protect a tankless water heater from freezing.
If you are considering an outdoor tankless water heater, and are unsure if it would be a good match for your area, we recommend speaking with a professional plumber or contacting the manufacturer.
Stiebel Eltron 24 Plus
Stiebel Eltron manufacturers electric tankless water heaters in a variety of sizes. Their sleek good looks, and German engineering makes Stiebel Eltron tankless systems very popular. The 24 Plus can deliver up to 5 GPM.
Although, it's true that gas tankless water heaters can out-perform electric systems when it comes to how many gallons or hot water they can produce per minute (GPM). Electric tankless water heaters have models that can deliver a respectable 8 GPM, which is more than enough to satisfy most households.
So, in other words, don't rule out electric tankless water heaters unless your household has a very high demand for hot water.
Especially since electric tankless water heaters have many advantages over gas systems. They are strong performers when it comes to maintenance, installation, and overall price.
With a more simplistic design, electric tankless systems are easier to troubleshoot, diagnose and repair. This also means they typically have a longer service life.
And, when it comes to installation, an electric tankless water heater is easier and less expensive to install. This is largely because there isn't a need for the venting of exhaust.
In fact, since venting isn't necessary, and electric tankless systems are significantly smaller (about a third the size of gas heaters), they can be installed in locations where a tank-style or gas tankless heater simply wouldn't be feasible.
In addition, since there isn't exhaust/greenhouse gases produced, electric systems are an excellent environmentally-friendly option.
It should also be noted, that as a general rule, electricity prices are far more stable than gas prices, and it's generally agreed that the price of electricity will likely rise at a much slower pace.
EcoSmart ECO 27
The EcoSmart ECO 27 is a very popular, reasonably priced electric tankless water heater. It can deliver a flow rate up to 6.5 GPM
In addition, electric tankless systems can achieve higher energy efficiency ratings. In fact, over 98% of the incoming electricity to the system is used to heat water!
However, a substantial amount of electricity is required to operate an electric tankless system.
Many homes are not built to provide the electrical requirements these appliances demand. If your home falls into this category, you may need to upgrade your home's electrical supply.
Still with that said, electric fueled tankless water heaters are seriously worth considering and may be the right choice for your household. The video below shows how an electric tankless water heater works.
Watch the Video
Finding the right size tankless water heater for your home isn't as difficult as it may sound. But it is a critical decision since there's less room for error.
Tank-style water heaters hold a reserve of hot water in a storage tank, but a tankless system doesn't have this buffer to fall back on to cover shortages during peak periods. If you require more hot water than your tankless heater is capable of heating, the water will be lukewarm.
Leaving you with a less than pleasant shower!
When sizing a tank-style water heater, we think in terms of capacity (50-gallon tank), but with a tankless system, we think in terms of flow rate (5 GPM - gallons per minute).
In order to select the right size tankless water heater, you'll need to determine the following:
- Temperature rise for your geographical area.
- Household's peak demand flow rate.
This Rinnai condensing indoor tankless water heater is designed for high-hot water demand households. It can deliver up to 10 GPM of hot water and can service up to 6 fixtures.
The Rinnai RU180iN is available in both natural gas and propane models.
How to Calculate Flow Rate
Determining your household flow rate is very easy. The first thing you need to do is determine when the demand for hot water is the greatest. This is usually in the morning when your family is taking showers and getting ready for work or school.
This is called your peak hour flow rate.
Next consider what hot water outlets are being used during this time. How many showers are running at the same time? Are you running a dishwasher? What about a load of laundry?
For each, you'll need to determine the required GPM (gallons per minute) needed. Use the chart below as a guide:
Average Flow Rate
1.5 to 2.5 GPM
2 to 4 GPM
3 to 5 GPM
Then, simply add the GPM of each device and the total will be your household's peak hour flow rate.
As an example, if you'll be running 1 shower with a flow rate of 2.0 GPM, and 1 bathroom faucet with a flow rate of 1.5 GPM during your peak hot water hour, then your peak flow rate will be 3.5 GPM (2.0 + 1.5 = 3.5).
Keep in mind, not all faucet heads have the same flow rate. It's always best to check with the manufacturer to determine the exact flow rate for your specific faucet.
This video shows how to properly size a tankless water heater.
Watch the Video
Warranties vary from manufacturer-to-manufacturer and from model-to-model. Many manufacturers require that you register your tankless water heater in addition to having it professionally installed to be eligible for warranty coverage.
Comparing warranties is an important part of selecting a tankless system.
When a manufacturer stands behind their product with reasonable warranty time frames and procedures, it's a good indication that they believe in the quality and reliability of the appliance they're selling.
Buying a tankless water heater is a big decision, and as you can see, there's a lot of things to consider. Here are a few of the more common questions people ask:
Will Tankless Water Heaters Replace Tank-Style Heaters?
Tankless water heating systems are very common in Europe and Japan, and over the last decade they've also gained popularity in the United States. This is largely because they are environmentally friendly, use less space, and are economical to operate.
Many see on-demand water heaters as the future. The technology will undoubtedly improve, and as it does these systems will likely gain in popularity and drive prices lower.
New home construction will also adapt by building homes with the necessary electrical (or gas line) requirements. Enabling homeowners to either install an on-demand system during the construction of the home, or easily transition to one at a later time.
Choosing to install a tankless system may not be the right move for everybody, but for those who can take advantage of the benefits, it's a clear win!
Why Do I Need to Replace My Tank-Style Water Heater's Venting System?
This is only a concern if you purchase a non-condensing gas tankless water heater because they release highly corrosive exhaust into the venting system. These tankless units require Category III venting, which is made from stainless steel. It's corrosive-resistant and expensive.
Plus, the venting requirements are different from tank-style water heaters. There's more flexibility when venting a tankless system since the venting can run through the roof or horizontally through a side wall.
Why Do You Recommend Purchasing a Condensing Gas Tankless System?
If you've decided to fuel your new tankless water heater with gas, then yes, we do recommend paying the extra money to buy a condensing system.
All gas tankless water heaters emit exhaust from the combustion process that occurs to generate heat. But how the appliances deal with the exhaust tells the whole story.
Non-Condensing systems vent the exhaust through expensive stainless steel venting pipes to the outdoors.
Where a condensing system uses a more sophisticated design that processes the exhaust internally, and what is left to exhaust, can be vented outdoors using PVC piping.
When selecting a gas tankless water heater you should always factor in the price to have it installed. As a general rule non-condensing tankless systems are less expensive to purchase and more expensive to install, where the reverse is true with a condensing system.
In the end, wouldn't you rather spend more money on a higher quality tankless appliance? and less money on installation? A better tankless water heater will provide far more advantages than expensive venting!
I'm Still Not Sure if I Should Purchase a Gas or Electric Tankless System?
If you're lucky enough to have both fuel supplies available where you live, then this is a big decision and one you should spend some time considering. If you haven't already, we recommend reading our Gas vs. Electric article which does a head-to-head comparison on each main category.
This is an especially importance decision during new home construction, but if you have an existing home, the best choice is typically to stay with the current fuel type of your tank-style water heater. If you choose to transition from an electric to gas (or vise versa), you'll have additional installation expenses.
But, with that said, you may have that anyway if you need to upgrade your electrical system, or add a larger gas supply line in order to accommodate the additional power demands.
It would be money well spent to consult with a professional plumber to assess your individual situation. He can run the numbers for you, help you purchase the right size appliance, and take all the headache and unpleasant surprises off your plate.
Here's a simple rule of thumb: Gas tankless water heaters are generally more expensive than electric systems and they should be professionally serviced every year. However, they tend to perform better than electric systems from an energy savings/operating costs standpoint.
Since the average service life of a tankless water heater can be 20+ years, the decisions you make today will be with you for a very long time.
I Live in a Cold Climate in the Winter and a Hot Climate in the Summer. Is this a Problem?
Yes and no. For the most part, this is taken into account when looking at the temperature rise for your geographic location. But, it's still a good idea to consider the seasonal impact.
Incoming water temperature varies from season-to-season, so it's a good idea to select a more powerful water heater that can keep up with your hot water demand in Winter. Smaller systems may be adequate during Summer, but they may struggle during the Winter months.
Consulting with a local professional plumber is always a good idea. He'll be able to provide hands-on experience to properly size a tankless for your unique climate.
Are There Code Requirements and Safety Issues I Should Worry About?
Yes. Tankless water heaters are complicated appliances and although most manufacturers provide detailed instructions to install them yourself, we strongly recommend having a professional install your new water heater. It's a worthwhile investment.
Hiring a local professional plumber will ensure you're meeting all of the necessary requirements with local building codes. Plus, many manufacturers require professional installation in order activate the warranty.
Why is Flushing a Tankless Water Heater So Important?
Both gas and electric tankless water heaters need to be flushed. However, as general rule, electric systems do not need to be flushed as frequently, and the process is less complicated.
Gas fueled systems should be flushed regularly to keep mineral build-up from impacting the appliance's performance. Even a small amount of mineral scale build-up can make a large negative impact on performance.
Overtime, the mineral build-up increases and longer burner cycles are necessary to compensate for the lower efficiency. If regular flushing doesn't occur, the system will need to work harder and the service life will be shorter than expected.
We highly recommend consulting with a local plumbing professional for their recommendation regarding the frequency of flushing. Most manufacturer manuals will recommend a minimum of once a year, but by speaking with a local pro you can take into account the water hardness for your area.
Why is Purchasing the Right Size Tankless So Important? It Seems Complicated.
It really isn't as difficult as it sounds, but it is critically important. Just take a look at a few reviews, you'll find plenty of unhappy new tankless owners that say their new tankless system doesn't deliver enough hot water.
On-demand systems are capable of delivering a constant supply of hot water, however, they're limited by the appliance's flow rate. The flow rate is the amount of water the tankless unit is capable of heating at any given time.
If your tankless system has too low of a flow rate, it won't be capable of delivering enough hot water to meet your household needs. Selecting a large enough unit will prevent your household from running out of hot water during your peak hour of usage.
Take the time to do a few quick and easy calculations or hire a professional plumber to help you. Installing a new tankless water heater is a big investment and buying a unit too small or too large is a simple mistake you can easily avoid.
Last update on 2022-09-23 / Affiliate links / Images from Amazon Product Advertising API