Indoor vs. Outdoor Tankless Water Heater Installation: Pros and Cons

In this article we will compare indoor vs. outdoor tankless water heater installation and see which is better.

We will try to explain the following:

Can an outdoor tankless water heater be installed indoors?

Can you install an indoor tankless water heater outside?

What are the differences and installation requirements for both models?

If looking to buy a tankless water heater for on-demand potable water heating, you have probably noticed that almost all the manufacturers offer indoor and outdoor gas models.

And no matter which type you choose, note that only proper installation followed by the best location selection will ensure safe and reliable on-demand water heating.

Indoor vs. Outdoor Tankless Water Heater Installation

Indoor tankless water heaters are mainly designed for indoor use. I said mainly because some models use the conversion vent kit, so the heater can be installed outdoor (VCK-NRCP from Noritz, for example).

Indoor models must use the venting system to transfer the by-product of gas combustion, while the air for combustion can be taken from inside the home or from the outside atmosphere and in a sufficient amount.

If the unit has to be installed in a confined space, such as a closet, the fresh air can be delivered from the connected room by using the additional air inlets on the door.

On the other side, outdoor models do not require any vent pipes – they are ventless, so they are ideal for those homeowners who do not have a solution for venting or want to eliminate any risk with the installation of the gas-powered units inside the house.

When choosing a tankless, the important factors during the selection are the installation requirements and where the unit will be located and installed.

Either you are building a brand-new home, making changes to an existing system – known as retrofits, or replacing the old water heater, follow the tips that are described here for reliable and cos-effective tankless water heating.

Careful planning will save you time and money. You might have to consult the manufacturer, city, or town where you live, obtain a permit, and check out the building codes.

As the installation requires some knowledge about gas, electricity, and plumbing, and as the local codes and manufacturer requirements have to be met, contact a professional for the proper and safe work.

Things to Consider

  • Vent pipe installation.
  • Location of the gas, electric, and water supply line.
  • Location of the most used hot water fixture. The proximity of the hot water fixture eliminates the long pipe runs.
  • Available space (closet, bathroom, outside wall).
  • Required tools: power drill, hacksaw, level, screwdriver, pipe cutter, pipe wrenches, stud finder, high-heat silicone sealant…

Installing an Indoor Tankless Water Heater

Rinnai indoor water heater (photo:

Mounting Tips

An exterior wall is the best place for tankless water heater installation, making the venting and unit installation easier and cheaper. Mounting the heater and securing it to the wall is very simple, and it requires just a few screws at the top and a few at the bottom.

Tips: A crossbeam behind the drywall is ideal for mounting the heater, as it is strong, provides excellent support, and vent can be easily directed above and through the wall.

Another option is to install a piece of plywood between two vertical studs and mount the heater to the plywood.

Proper Clearances

For the normal operation of the venting system, proper clearances should be maintained from any doors, windows, plants, or air intakes and exhaust from other appliances. The installer should consult the manufacturer’s instructions and local codes.

The clearances are vital, so the heater can get sufficient air supply and at the same time move the flue gases safely out. This information can be found in the user manual, but in general, it is one foot from the front and bottom and half an inch on a side.

Power-Vent vs. Direct-Vent

Tankless models with the power-vent (PV) systems provide much more flexibility than direct-vent (DV) models as its vent pipe can be very long, 50 ft., for example, or even longer. Keep in mind that it is recommended to have the pipes as short as possible for the proper venting, which should not exceed the recommended number of vent pipe fittings (elbows).

Vent Kit

Tankless water heaters usually come with the installation vent kit, which makes the installation easier. Based on the tankless venting configuration, additional venting components may need to be purchased, and all the joints must be secured and sealed correctly.

Using the vent kit, some models can be converted from power vent to direct vent type.

Horizontal vs. Vertical Termination

The unit can be vented horizontally through the sidewall or vertically through the roof, depending on the location. Most of the tankless water heaters have either 3″ or 4″ vents. Vertical vent pipes should terminate with the roof flashing and rain protection.

Condensing vs. Non-Condensing

If the heater is non-condensing, a stainless steel vent is required due to the acidic condensate and high temperature of the flue gases. If the vent pipe is long, the condensate trap might be necessary.

Condensing models usually do not require this type of pipe; these can use PVC, ABS, or similar, but according to the manufacturer manual.

Installing an Outdoor Tankless Water Heater

Rinnai outdoor tankless water heater (photo:

Outdoor tankless water heater installation is another option, which might be a better solution for avoiding any potential water or gas leak.

Outdoor models do not use the vent system – they are ventless. The exhaust opening is at the front of the heater, but there are no expensive pipes and additional vent components. And this is what makes the installation easier, faster and cheaper.

The junction box can also be installed outside, which is connected to the unit by the weather-proof electric cable. You can control the heater’s operation and monitor the water heating process from the comfort of your home and by using the remote controller.

As the heater is installed outside, the heat loss will be increased during the cold winter time, so insulating the incoming and outgoing pipes will be beneficial. As a safety device and to prevent freezing, outdoor tankless water heaters utilize freeze protection, usually protecting it to – 4 F for some models. If the unit will not be used for some time during the cold weather or exposed to long-term freezing conditions, always drain the unit.

The outdoor models have another advantage; they do not occupy an indoor space. They are either mounted on the exterior wall or in a recessed box, which is an optional feature.

Outdoor models are recommended for the locations such as beauty shops or places with corrosive or flammable products or where the air for combustion can be contaminated with chemicals.

Gas and Plumbing Installation Tips

For any gas work, the best is to contact a licensed technician.

The work usually includes the pipe (large diameter gas supply line), shut-off valve, and drip leg installation, including the unions to disconnect the unit – if there is a need for repair, service, or replacement.

Of course, correct gas pressure has to be supplied for normal tankless operation.

Plumbing work includes hot and cold water pipes connection and installation of the check valve, pressure relief valve, shut off valve, expansion tank, and service valves. All the work has to be done per code.

The above connections can use either rigid lines or flexible. Every connection is then checked for leaks.

Either type of tankless water heater you have chosen, always keep in mind to consult the manufacturer’s guide and local codes.

Related Articles

Similar Posts