Tankless Water Heaters: The Comprehensive Guide to Efficient Water Heating

Are you tired of running out of hot water in the middle of a shower or waiting for the water to heat up?

If so, it might be time to buy and upgrade to a tankless water heater. With their energy-efficient design, space-saving size, and endless supply of hot water, tankless water heaters have become an increasingly popular option for homeowners.

In this comprehensive guide, we’ll explore the pros and cons of tankless water heaters, compare them to traditional tanks, provide tips on sizing and installation, and share our top picks and reviews to help you find the best type and model for your home.

Tankless or on demand water heater
Rinnai RUR199 tankless water heater

What Is a Tankless Water Heater?

tankless water heater is an efficient, space-saving solution for providing hot water in residential and commercial settings.

Unlike its traditional counterpart-tank type that stores heated water in a large tank, the tankless variant does not hold water internally for heating purposes.

Instead, it heats water on demand, offering a continuous supply of hot water without the need for a bulky storage tank.

This sleek and compact design allows for greater flexibility in installation locations, including small spaces or walls, making it an ideal choice for those looking to maximize their use of space.

They are known for the high energy efficiency and the convenience of providing hot water exactly when it’s needed, catering to the modern lifestyle’s demands for efficiency and sustainability.

Types of Tankless Water Heaters

Tankless water heaters come in a variety of types, each catering to different needs and energy sources. The primary types include electric and gas-fired models.

Electric models use electrical resistance elements to heat water on demand. They are known for their compact size and efficiency, making them suitable for smaller homes or point-of-use applications, such as under sinks. Electric models require significant electrical power, which may necessitate an electrical system upgrade.

Gas-fired models utilize natural gas or propane to heat the water. They are more powerful than electric models and can handle a higher demand for hot water, making them ideal for larger households. Gas-powered units require venting to the outside to expel exhaust gases, which can add to the installation complexity.

Condensing tankless water heaters use a dual heat exchange system to maximize efficiency. They capture heat from the exhaust gases in addition to the heat generated directly for water heating. This process allows them to achieve higher efficiency ratings by utilizing almost all the heat generated, with some models reaching efficiencies of up to 98%.

Non-condensing types are the more traditional type, where the exhaust gases are vented outside without being used for additional heating. They typically have efficiency ratings around 80-85%, making them less efficient than their condensing counterparts but still more efficient than traditional tank heaters.

Non-condensing units are often less expensive and simpler to install, making them a viable option for many households.

How Does a Tankless Water Heater Work?

A tankless water heater, whether electric or gas-powered, operates on the principle of heating water on demand, eliminating the need for a bulky storage tank.

When a hot water tap is opened, cold water travels through a pipe and into the unit, where it is then heated by either an electric element or a gas burner, depending on the type of heater.

How Electric Models Work?

Electric tankless water heater (photo: ecosmart)

Electric tankless water heaters provide an efficient, on-demand hot water solution by heating water directly with electric elements as it flows through the unit.

Activated by a flow sensor when the hot water tap is turned on, these heaters quickly warm incoming cold water to a preset temperature, ensuring an endless supply without the need for a bulky storage tank.

The system’s innovative modulation capability allows it to adjust energy output to match water flow, optimizing efficiency and minimizing waste.

Additionally, many models feature user-friendly control panels for temperature adjustments, equipped with digital displays for monitoring and, in some cases, remote controls for convenience, making the management of hot water supply both efficient and adaptable to user needs.

How Gas Models Work?

How gas tankless works (photo: Takagi)

Modern gas-powered tankless water heaters, exemplified by brands like Rinnai, Noritz, Takagi, and Paloma, employ sophisticated technology to precisely manage temperature, flow, and safety features through electronic control boards.

These systems initiate heating when a flow sensor detects water movement, triggering a gas valve that allows fuel-either natural gas or propane-to ignite in a combustion chamber, heating water instantaneously via a heat exchanger to a preset temperature for an uninterrupted hot water supply.

Key to their efficiency, these heaters include features such as modulating gas valves, which adjust the fuel flow to match demand, enhancing energy conservation and ensuring consistent water temperature, even during peak usage.

Advanced models also boast condensing technology, capturing heat from exhaust gases for even greater efficiency, while adhering to safety regulations through necessary venting to expel gases outside. This integration of technology and design ensures a responsive, energy-efficient hot water system with reduced environmental impact.

Video: Tankless Basics

Pros And Cons Of Tankless Water Heaters

Tankless water heaters offer a modern approach to supplying hot water that comes with its own set of advantages and drawbacks. Understanding these can help homeowners make informed decisions based on their specific needs and circumstances.

Advantages and Benefits

  • Endless hot water supply: Unlike traditional heaters, tankless water heaters provide a continuous supply of hot water, ensuring that you never run out of hot water.
  • Durability: They are built to last, with a lifespan of 20 years or more for some models.
  • Energy and cost savings: By heating water on demand, tankless heaters can save you up to 50% on energy and heating costs compared to traditional heaters. Additionally, high-efficiency models are available that are marked as Energy Star, ensuring that you save money and energy.
  • Lower greenhouse gas emissions: Tankless produce lower greenhouse gas emissions compared to traditional heaters, making them a more environmentally friendly option.
  • No leaking problems: Since there is no tank, the risk of leaking is reduced.
  • Smart technology: Some models use smart technology with self-diagnostic programs for troubleshooting and repairs, as well as precise temperature control for enhanced safety and comfort.

This article provides a more extensive list of benefits associated with tankless water heaters.


  • Tankless systems can have high upfront costs, up to three times more than tank-type heaters.
  • Upgrades like venting or gas lines can be expensive.
  • Inconsistent water temperature or “cold-water sandwich” is one of the frequent problems that can occur with economy-type units, as the hot water output is split among all household fixtures.
  • Venting gas and propane units require costly stainless steel tubing, and some brands may use other materials.
  • Electric instant water heaters may require an additional circuit and use a lot of energy.
  • Gas water heaters require annual servicing, which adds additional expenses.
  • Instant water heaters require a minimum flow rate to activate the heat exchanger.
  • Tankless water heaters rely on the pressure delivered to the home, making a good plumbing system necessary.

What To Consider When Buying a Tankless Water Heater?

When considering the purchase of a tankless water heater, several key factors should be evaluated to ensure that the selected model meets your hot water needs, budget, and installation constraints.

Here are essential considerations to guide your decision:

Fuel type: Determine if an electric, natural gas, or propane model of tankless water heater is most suitable for your home, and consider whether it can also be integrated with solar panels for enhanced energy efficiency. This decision will depend on the availability of each fuel type in your area, the cost of fuel, and any necessary modifications to your home (such as gas lines or electrical upgrades).

Size and flow rate: Evaluate the size of the unit in terms of its ability to handle your household’s hot water demand. Tankless water heaters are rated by the maximum temperature rise possible at a given flow rate, so you’ll need to know how much hot water you use during peak times. Consider the number of fixtures (showers, faucets, appliances) that may require hot water simultaneously and select a model that can accommodate this demand.

Energy efficiency: Look for units with high energy efficiency ratings to maximize your energy and cost savings over time. Energy-efficient models may qualify for rebates or tax credits, which can offset the higher initial cost.

Installation and ventilation requirements: Understand the installation requirements, including any necessary venting (for gas models) and whether your current electrical system (for electric models) can support the unit. Installation can significantly affect the overall cost, especially if upgrades to your home’s infrastructure are required.

Costs: Consider both the upfront cost of purchasing the unit and the long-term operating costs. While tankless water heaters are more expensive initially, they can offer lower operating costs by using less energy. Calculate the potential energy savings to determine if the investment makes sense for your budget.

Brand and warranty: Research different brands and read reviews to assess reliability and customer satisfaction. Additionally, compare warranty periods and what they cover. A longer, more comprehensive warranty can provide peace of mind and protect your investment.

Local regulations and rebates: Check local building codes and regulations regarding tankless water heater installation. Some areas may have specific requirements or offer rebates for installing energy-efficient models.

Sizing a Tankless Water Heater

When considering a tankless water heater for your home, selecting the right size is crucial to ensure it meets your hot water demands efficiently.

This involves calculating your peak hot water demand by summing the flow rates of all fixtures that might be used simultaneously and determining the necessary temperature rise based on your incoming water temperature and desired hot water temperature.

Proper sizing affects not only the heater’s ability to deliver hot water but also its energy efficiency and longevity.

For a comprehensive guide on how to accurately to size your unit, including detailed calculations for flow rates and temperature rise, visit this detailed article on sizing tankless water heaters.

How Much Does a Tankless Water Heater Cost?

The cost of a tankless water heater varies widely based on the type (gas or electric), brand, capacity, and efficiency.

On average, electric models range from $500 to $1,500, while gas-powered units can cost between $1,000 and $2,000, excluding installation fees.

Installation costs can significantly increase the overall price, ranging from $500 to $2,000, depending on the complexity of the installation, necessary upgrades to electrical or gas lines, and whether venting is required for gas models.

For example, a high-efficiency gas model like the Rinnai RU199iN offers a 11 GPM flow rate suitable for larger homes and can cost around $1,800 for the unit alone.

On the other hand, an electric model like the Stiebel Eltron Tempra 24 Plus, known for its self-modulating technology and energy efficiency, may be priced around $700.

It’s important to consider both the upfront purchase and installation costs along with the long-term savings on utility bills when evaluating the overall value of a tankless water heater.

Compare Tankless vs. Tank

When comparing tankless water heaters to traditional tank models, the choice involves weighing the benefits of energy efficiency and unlimited hot water supply against initial costs and installation requirements.

Tankless water heaters, though more expensive upfront, offer long-term savings on energy bills due to their on-demand heating capability, which eliminates the standby energy losses associated with tank heaters.

On the other hand, tank water heaters have a lower initial purchase and installation cost but may lead to higher operating expenses over time due to their continuous heating process.

The decision also hinges on household water usage, space considerations, and the existing infrastructure of your home.

Tankless Water Heater Brands

When exploring the market for tankless water heaters, certain brands consistently rise to the top for their efficiency, reliability, and range of options for both electric and gas models.

EcoSmart and Stiebel Eltron lead the pack in electric tankless water heaters, offering innovative and energy-saving features tailored to various household sizes.

Rheem and Bosch also excel with their compact, efficient electric models designed for longevity and performance.

For those considering gas-powered options, Rinnai and Navien stand out for their cutting-edge technology and user-friendly features, while Noritz is renowned for its eco-friendly and high-efficiency models.

These brands are celebrated not only for their product quality but also for exceptional features, quality, and warranties.

How To Install a Tankless Water Heater

Installing a tankless water heater, whether electric or gas, is a complex process that requires careful planning and precision.

The basic steps include evaluating your home’s power and water infrastructure to ensure compatibility, choosing the appropriate location for installation that complies with building codes, and making necessary adjustments to electrical panels or gas lines.

It’s crucial to follow the manufacturer’s instructions for mounting the unit, connecting it to the water supply, and, for gas models, ensuring proper venting to safely expel exhaust gases.

Due to the technical expertise required, especially in handling gas lines or electrical upgrades, hiring a professional installer is highly recommended.

For a step-by-step guide, including detailed instructions on each phase of the installation and safety tips, we have an article for you.

Tankless Water Heater Maintenance

Maintaining a tankless water heater is essential for ensuring its efficiency, longevity, and safe operation, including the crucial step of winterizing to prevent damage in colder climates.

Regular maintenance tasks include descaling to remove mineral buildup from the heat exchanger, checking and cleaning the air and water filters, and inspecting the venting system for gas models to ensure it remains clear and functional.

It’s also important to periodically check for any signs of wear and tear or leaks and to test the system’s water pressure to avoid strain on the heater. While some basic maintenance can be performed by the homeowner, such as cleaning filters, more complex tasks like descaling often require professional service.

Professional maintenance is recommended at least once a year to address any potential issues and keep the system running smoothly.

How Long Do Tankless Water Heaters Last?

Tankless water heaters boast an impressive lifespan, typically exceeding 20 years, significantly outlasting traditional tank-based models. This durability is attributed to their design, which minimizes the wear and tear associated with heating and storing water continuously.

To ensure optimal performance and longevity, it’s essential to adhere to a regular maintenance schedule, including tasks like descaling to remove mineral deposits.

Moreover, these units often come with substantial warranties, sometimes covering up to 15 years, providing additional peace of mind and protection for your investment.

While the initial cost may be higher, the extended lifespan and energy efficiency of tankless water heaters can offer greater long-term savings, making them a cost-effective choice for many homeowners.

Are Tankless Water Heater Worth It?

In conclusion, tankless water heaters are an excellent alternative to traditional tank-style heaters due to their energy efficiency, long lifespan, and continuous supply of hot water.

Homeowners who are looking to save money on their energy bills, reduce their environmental impact, and enjoy a reliable source of hot water should consider investing in a tankless water heater.

Although they may require a higher initial investment, the long-term savings and benefits make it a worthwhile investment for homeowners.


Do Tankless Water Heaters Need To Be Flushed?

Yes, tankless water heaters need to be flushed regularly to remove mineral buildup and sediment that can accumulate inside the unit. Flushing involves running a solution of vinegar or another descaling agent through the unit to dissolve buildup. It’s recommended to flush at least once a year to maintain optimal performance and extend the unit’s lifespan.

Can Tankless Water Heaters Explode?

Tankless water heaters are unlikely to explode since they do not store hot water under pressure like traditional tank-style heaters. However, improper installation or maintenance could cause malfunctions or safety hazards. Regular maintenance and inspections by licensed professionals, along with familiarity with the manufacturer’s recommended safety precautions, can help ensure safe operation.

What Are The Possible Installation Locations For Tankless Water Heaters?

Tankless water heaters can be installed in various locations in a home, depending on the unit’s size, power source, and plumbing requirements. Popular locations include utility rooms, garages, and basements, while smaller units can be installed in closets or under sinks for point-of-use applications. It’s important to ensure proper clearance, ventilation, and access for maintenance and repair, follow local building codes, and have the unit installed by a licensed professional for safe and efficient operation.

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