Homeowners everywhere are making the switch from traditional storage tanks to tankless water heaters. Why? Because these modern systems heat water only when you need it, cutting down on wasted energy, saving space, and providing a nearly endless supply of hot water.
But choosing the best tankless water heater isn’t always simple. Should you go for electric or gas? Is a condensing model worth the investment? How do you pick the right size for your home? You May Also Like: Slow Draining Tub.
In this guide, we’ll cover everything you need to know about tankless water heaters—how they work, their pros and cons, installation tips, and which brands are leading the market in 2024. By the end, you’ll have all the information needed to decide if a tankless system is right for you.
What Is a Tankless Water Heater?
A tankless water heater (also called “on-demand” or “instant hot water heater”) heats water directly without using a storage tank. Instead of keeping 40–80 gallons hot at all times like traditional tanks, tankless units activate only when you turn on the faucet.
How it works in simple steps:
- Cold water enters the unit through a pipe.
- A flow sensor triggers the heating elements (electric coils or a gas burner).
- Water passes through a heat exchanger, where it warms up instantly.
- Hot water flows directly to your tap or appliance.
This process means:
- No standby heat loss (saving energy).
- Unlimited hot water (as long as the unit matches your household demand).
- Compact design that frees up space.
Tankless Water Heaters vs. Traditional Water Heaters
| Feature | Tankless Water Heater | Traditional Tank Water Heater |
|---|---|---|
| Lifespan | 15–20 years | 8–12 years |
| Hot Water Supply | Endless (flow-based) | Limited (tank size) |
| Energy Efficiency | High (on-demand heating) | Moderate (standby losses) |
| Size | Compact, wall-mounted | Large, bulky tank |
| Upfront Cost | Higher ($1,500–$3,000) | Lower ($800–$1,500) |
| Operating Cost | Lower (saves $80–$100/year) | Higher |
👉 If you want a long-term solution and lower utility bills, tankless is the better choice.
Types of Tankless Water Heaters
1. Electric Tankless Water Heaters
- Use powerful heating elements to warm water.
- Pros: Lower upfront cost, compact, easy to install.
- Cons: May struggle with whole-house demand; could require an electrical panel upgrade.
2. Gas Tankless Water Heaters
- Powered by natural gas or propane.
- Pros: Heat water quickly, handle multiple fixtures, great for large households.
- Cons: Higher cost, require venting, and professional installation.
👉 If you’re looking for the best tankless gas water heater, you’ll likely want a condensing model for maximum efficiency.
Condensing vs. Non-Condensing Technology
- Condensing Tankless Heaters:
Capture heat from exhaust gases, making them 90–98% efficient. Exhaust is cooler, so cheaper PVC venting can be used. - Non-Condensing Tankless Heaters:
Use a single heat exchanger. Hot gases vent directly outside, requiring costly metal venting. Lower efficiency (80–85%).
For long-term savings, condensing is usually the smarter pick.
How to Choose the Best Tankless Water Heater
1. Calculate Household Demand
Tankless units are rated by flow rate (GPM) and temperature rise.
- Shower: 1.5–2.5 GPM
- Kitchen faucet: 1.5 GPM
- Dishwasher: 1–2 GPM
- Washing machine: 2–3 GPM
Add up simultaneous usage to determine the right size.
Example: 1 shower (2 GPM) + dishwasher (1.5 GPM) = 3.5 GPM minimum needed.
2. Check Your Fuel Source
- If you already have a gas line, a tankless gas water heater may be best.
- If your home is all-electric, upgrading your panel may be necessary for electric models.
3. Efficiency Rating (UEF)
Higher UEF = lower utility bills. Look for Energy Star-certified models.
4. Indoor vs. Outdoor Installation
- Indoor: Protected from elements, requires venting.
- Outdoor: Built-in venting, easier install, but must be winterized in cold climates.
Pros and Cons of Tankless Water Heaters
Pros:
✅ Endless hot water supply
✅ Compact and space-saving
✅ Longer lifespan than tanks
✅ Lower operating costs
✅ Energy efficient
Cons:
❌ Higher upfront cost
❌ Installation may require gas/electrical upgrades
❌ Limited flow rate (may need multiple units in large households)
❌ Small delay before hot water reaches faucet
Cost of Tankless Water Heaters
- Unit Price: $500–$2,500 (depending on size and brand).
- Installation: $1,000–$3,000 (gas line, venting, or electrical upgrades can add more).
- Operating Costs: About $75–$150 less per year than traditional tanks.
Over 15–20 years, savings can add up to $1,000–$2,000.
Best Tankless Water Heater Brands
When searching for the best tankless water heaters, these brands stand out:
1. Rinnai
- Specializes in gas-powered and propane tankless systems.
- Models with WiFi and smart scheduling.
- Industry leader for best tankless gas water heater category.
2. Noritz
- High-efficiency condensing units.
- Indoor and outdoor options.
- Strong warranty (12 years on heat exchangers).
3. Rheem
- Wide range of affordable gas and electric models.
- Offers WiFi-enabled units for convenience.
4. Bosch
- Compact, eco-friendly models.
- Reliable for both small households and point-of-use systems.
5. Takagi
- Commercial-grade durability.
- Best for large homes or multi-unit properties.
Installation: DIY vs. Professional
While some homeowners try DIY installation, here’s why hiring a pro is safer:
- Proper venting required for gas models.
- Electrical upgrades may be needed.
- Warranty often requires professional installation.
👉 To find a trusted installer near you, visit Plumber Near Me.
Maintenance Tips for Tankless Water Heaters
- Flush annually with vinegar solution to remove mineral buildup.
- Clean air filters every few months.
- Inspect venting for blockages.
- Descale more often if you have hard water.
Proper care = 20+ years of reliable performance.
Is a Tankless Water Heater Worth It?
If you value:
- Endless hot water
- Long lifespan
- Energy savings
- Modern, compact design
…then yes, tankless water heaters are worth the investment.
The upfront cost is higher, but over time, the efficiency and longevity pay off.
FAQs About Tankless Water Heaters
Q: What’s the downside of tankless water heaters?
Higher upfront cost and possible need for gas/electrical upgrades.
Q: Which is the best tankless gas water heater?
Rinnai and Noritz models are often rated highest for performance and reliability.
Q: How long do tankless water heaters last?
15–20 years with regular maintenance.
Q: Can they handle large families?
Yes, but you may need a higher GPM model or multiple units.
Q: Do they really save money?
Yes—energy savings of $75–$150 per year compared to traditional tanks.
Conclusion
Tankless water heaters are transforming how we heat water at home. With their on-demand technology, compact design, and energy savings, they’re quickly becoming the standard choice.
If you’re considering upgrading, research your household’s hot water demand, fuel availability, and budget. For most families, a tankless gas water heater provides the best mix of performance and efficiency.
👉 Ready to make the switch? Get expert installation help at Plumber Near Me.
