Propane Tankless vs. Electric Water Tank Heaters: Key Differences and How to Choose

When it comes to heating water for your home, the choice between propane tankless vs. electric tank water heaters can make a big difference.

In this article, we’ll dive into the details, comparing their advantages and disadvantages, key factors to consider, and costs.

Whether you’re looking for energy efficiency, endless hot water, or a budget-friendly option, we’ll help you decide which system is better suited for your home—and why.

How to Choose Between Propane and Electric Water Heaters: Key Factors

When researching tankless and tank-type water heaters—whether powered by propane or electric resistance—you’ll quickly realize that several factors can influence your decision.

Here are some of the most important ones to keep in mind:

Family Size

Do you have a large family with teenagers or little ones? Larger households often need water heaters that can keep up with high hot water demand. For example, high-recovery tank-type heaters or on-demand systems (like condensing models) are popular choices. Take a moment to assess your family’s water usage habits—this will help you pick the right fit.

Fuel Type

What fuel options are available to you, and which do you prefer? Electricity, propane, or natural gas? Natural gas is typically the most affordable and widely used, while electricity is common but can be costly. Propane, on the other hand, packs a lot of power but comes with the added hassle of delivery and storage.

Location

Where is your home located? Is it in a warm or cold climate? Rural or urban area? Rural homes often rely on electricity or propane, while urban areas usually have easy access to natural gas. Your location can significantly impact your options.

Price

Tankless water heaters generally have a higher upfront cost compared to tank-type models. However, their operating costs are often lower due to their high efficiency. It’s a trade-off between initial investment and long-term savings.

Features and Technology

Tankless models are more advanced, offering features like smartphone monitoring, voice control, and Wi-Fi connectivity. They also make troubleshooting easier with innovative diagnostic systems. If you love smart home tech, this might be a big selling point for you.

User Preference

Finally, your personal preferences matter. This could include safety concerns, desired features, installation flexibility, or even your comfort level with the system. After all, it’s your home—your needs and priorities should guide the decision.

Propane Tankless Water Heaters: What You Should Know

How Do They Work?

Tankless water heaters are innovative devices designed to heat water on demand, eliminating the need for a storage tank. They use compact heat exchangers to instantly warm water as it flows through the system.

When it comes to efficiency and cost-effectiveness, tankless water heaters powered by propane typically outperform electric models. In fact, many units are versatile and can be converted to use either natural gas or propane, though this requires proper adjustment of burner nozzles and gas pressure settings. If you’re using a propane heater, always ensure it’s configured correctly for this fuel type to avoid performance issues or safety risks.

Fun fact: Did you know over 50 million Americans rely on propane gas to power their water heaters, furnaces, ranges, BBQs, pool heaters, and more? This gas type is a popular choice for its efficiency and versatility in both residential and outdoor settings.

Advantages

Compact and Space-Saving Design

Propane tankless water heaters are small, lightweight, and don’t require bulky storage tanks. Their wall-mounted design frees up valuable floor space, making them ideal for homes with limited room.

Endless Hot Water Supply

As long as there’s a steady supply of propane, these heaters provide a continuous flow of hot water. This makes them perfect for large families or households with high hot water demands. Just ensure you have a reliable propane delivery service in place.

High Energy Efficiency

Unlike traditional water tank heaters, tankless models eliminate standby heat loss, making them significantly more energy-efficient. This translates to lower energy bills and reduced waste.

Environmentally Friendly

Propane burns cleaner than many other fuels, producing fewer greenhouse gas emissions. Condensing models are particularly eco-friendly, with ultra-low pollution levels and minimal energy waste. Plus, propane is non-toxic and safe for the environment.

Advanced Technology

Modern water heaters come equipped with advanced electronics for precise temperature control, enhanced diagnostics, and improved comfort. Many models even offer smart features like Wi-Fi connectivity and voice activation.

Fast Water Heating

Thanks to powerful gas burners and propane’s high energy value, these heaters deliver hot water quickly. Adding a recirculation pump can provide instant hot water at the tap, eliminating wait times.

No Rotten Egg Smell

Tankless systems avoid the sediment buildup and sulfur odors common in traditional tank heaters. Since their components are replaceable, they also generate less waste and reduce landfill impact.

Portability

Propane’s portability makes these heaters versatile. Small propane tanks allow you to use tankless water heaters outdoors or in remote locations, perfect for camping or outdoor events.

Flexible Installation Options

Propane tankless water heaters can be installed indoors or outdoors, offering flexibility to suit your home’s layout and needs.

Durability and Longevity

With a lifespan of 20 to 30 years, propane models outlast traditional tank models. They also come with extended warranties, often up to 15 years for advanced models.

Rebates and Incentives

Many propane heaters qualify for energy-efficient rebates and tax credits, helping offset the initial investment.

Disadvantages

High Operating Costs

Propane prices can be expensive, leading to higher ongoing fuel costs. While propane is efficient, fluctuating fuel prices can make budgeting unpredictable. Homeowners should compare long-term energy costs with other fuel types before committing.

Upfront Expense

The initial purchase price is higher compared to traditional tank heaters. However, the long-term energy savings and extended lifespan of tankless models can offset this initial investment over time.

Installation and Maintenance Costs

Professional installation, servicing, and maintenance can be costly. Tankless systems often require specialized technicians for installation, which adds to the overall expense. Regular maintenance is also essential to ensure optimal performance and longevity.

Minimum Flow Requirement

Tankless heaters require a minimal water flow to ignite, which can be an issue in low-flow situations. This means they may not activate for small tasks like handwashing, potentially limiting their convenience in some households.

Propane Delivery and Storage

Propane must be delivered by truck and stored in large tanks, which can be inconvenient and pose risks like leaks or spills. Homeowners in remote areas may face additional challenges with delivery schedules and storage space.

Freezing Risks

In cold climates, improper winterization can cause components like the heat exchanger to freeze and break. To avoid damage, it’s crucial to install freeze protection kits or ensure the unit is properly insulated.

Venting Requirements

Proper venting is necessary, which can complicate installation and increase costs. Venting systems must meet specific safety standards, and improper installation can lead to performance issues or safety hazards.

Safety Concerns

Gas burning can lead to potential gas, exhaust, or carbon monoxide leaks if not properly maintained. Installing carbon monoxide detectors and scheduling regular inspections can help mitigate these risks and ensure safe operation.

How Much Does It Cost to Install a Propane Tankless Water Heater?

According to HomeAdvisor, the cost of a propane tankless water heater ranges from $250 and $2500, while installation costs range from $400 and $1500. Professional installation typically takes 8 to 10 hours, with labor costs averaging $45 and $150.

Things to Consider When Buying a Propane Heater

• Gas Input (BTUs): Look for models with a high BTU rating (e.g., 199,000 BTU) for faster heating. Energy Star-compliant models often offer modulation, adjusting power output as needed.
• Efficiency Rating: Choose models with an efficiency rating above 0.87 to qualify for rebates and tax credits.
• Professional Installation: Ensure your heater is installed by a professional and connected to a reliable propane supply for consistent performance.
• Top Brands: Consider reputable brands like Rinnai, Noritz, or Takagi. These brands offer condensing, power-vented models with advanced features like Wi-Fi connectivity, recirculation pumps, and voice activation.

Important Details About Electric Water Tank Heaters

What Are They?

Tank-type water heaters are the most common domestic water heating systems in North America. These systems feature large storage tanks, typically holding 30 to 50 gallons of water, and use natural gas, propane, or electricity as their fuel source.

Electric tank-type water heaters use one or two heating elements to warm the water, with thermostats regulating the temperature. The system continuously maintains the water at the set temperature, ensuring hot water is always available—whether you need it or not.

Advantages

Proven Reliability

Electric water heaters are widely used and trusted. They feature simple, reliable technology and are supported by an extensive service network.

Affordable Upfront Costs

Compared to tankless models, electric tank-type water heaters are more affordable to purchase and install.

Easy to Maintain

These systems are straightforward to troubleshoot, service, and maintain, making them a hassle-free option for homeowners.

DIY-Friendly Installation

Electric models are easier to install, and with some DIY skills, you can save hundreds of dollars on installation costs.

No Venting Required

Unlike gas-powered heaters, electric models don’t produce exhaust gases, so no venting is needed. This makes them safer and quicker to install.

Hot Water Availability

Even during emergencies, electric tank-type heaters ensure you have access to hot water.

Disadvantages

Higher Operating Costs

Electric tank heaters constantly heat and reheat water to maintain the set temperature, leading to higher energy bills.

Shorter Lifespan

These systems typically last 10 to 15 years, shorter than tankless options. Warranties range from 6 to 12 years, depending on the model.

Environmental Impact

When they break, storage tanks often end up in landfills, contributing to environmental pollution.

Limited Hot Water Supply

Storage tanks have a finite capacity, so you may run out of hot water during peak usage. Proper sizing and understanding the recovery rate and first-hour rating are crucial.

Frequent Replacements

Electric tank-type heaters need to be replaced more often than tankless models.

Space Requirements

These heaters take up significant space, with tall models measuring around 60 inches in height and 20 inches in width. Larger tanks are needed for higher hot water demands.

Indoor Installation Only

Electric tank-type heaters can only be installed indoors, limiting placement options.

No Energy Star Compliance

Unfortunately, no electric tank-type water heaters are Energy Star compliant, except for hybrid models that combine heat pump technology with electric heating elements.

Things to Consider When Buying an Electric Tank-Type Water Heater

1. Power Input (Watts): Electric water heaters are rated by their power input, ranging from 1,440 watts for smaller models to 5,500 watts for larger ones. Higher wattage means faster heating.
2. Quality Components: Look for models with durable Incoloy heating elements, commercial-grade anode rods, and thick insulation for longevity and efficiency.
3. Additional Features: Some models come with digital displays and advanced protection features for better performance and ease of use.
4. Installation Costs: According to Home Advisor, the cost of a new electric tank-type water heater ranges from $400 and $1600, while the installation costs range from $150 and $600. Labor rates typically fall between $45 and $150 per hour.

Comparing Costs

According to PERC (Propane Education & Research Council), annual energy use for the propane tankless water heater is around $290 while for the electric tank-type water heater is approximately $645, which is more than double. In addition, the electric model has about 70% higher gas emissions (at the point where it is created). This study is based on a 2,400 sq. ft. home located in Iowa.

So, What’s the Best Water Heater Option for You?

When it comes to comparing propane tankless vs. electric tank water heaters, both options offer unique advantages, whether it’s affordability, energy efficiency, flexible installation, simplicity, or convenience.

If you’re looking for a cost-effective, long-lasting solution, you can’t go wrong with a propane tankless or an electric heat pump model. For top-quality options, consider brands like Rinnai, Takagi, and Noritz for tankless systems, and AO Smith, Rheem, and Bradford White for electric tank water heaters.

Finally, always consult with a professional to help you select the best fuel type and model for your home. Expert guidance ensures proper installation and reliable service for years to come.