BUYER’S GUIDE: Tankless Water Heaters

What is a Tankless Water Heater?

Tankless Water Heaters, often referred to as Instantaneous or Demand Water Heaters, provide hot water only as it is needed. Traditional storage water heaters produce standby energy losses that cost you money. We do not leave our homes heated while vacationing. We only heat our homes when there is a demand for heat. In the same way, a tankless water heater is used only when there is a demand for hot water.

How do Tankless Water Heaters Work?

Tankless water heaters work by heating the water directly, without the use of a storage tank. Therefore, they avoid the standby heat losses associated with storage water heaters. When a hot water tap is turned on, cold water travels through a pipe into the unit.

Electric Demand Water Heater

In an electric tankless water heater an electric element heats the water. In a gas-fired tankless heater a gas burner heats the water. As a result, tankless water heaters deliver a constant supply of hot water. There’s absolutely no need to wait for a storage tank to fill up with enough hot water.

Typically, this type of water heater provides hot water at a rate of 2–5 gallons (7.6–15.2 liters) per minute. In most cases, gas-fired tankless water heaters will produce higher flow rates than their electric counterparts. Some smaller versions, however, cannot supply enough hot water for simultaneous, multiple uses in large households.

For example, taking a shower and running the dishwasher at the same time can stretch a tankless water heater to its limit. To overcome this problem, you can install a “whole house” type tankless water heater or install two or more tankless water heaters, connected in parallel for simultaneous demands of hot water.

You can also install separate tankless heaters for appliances – such as a clothes washer/dryer or dishwasher – that also use a lot of hot water in your home.

Other applications for tankless water heaters include:

  1. Remote BBQ or outdoor sink
  2. Poolhouse or pool shower
  3. Remote bathrooms or hot tubs
  4. To serve as a booster, eliminating long pipe runs, for solar water heating systems, dishwashers and sanitation.
Tankless Water Heater Diagram

Why is a Tankless Water Heater Better Than a traditional Tank Heater?

Just a few of the main benefits of a tankless water heater, over the traditional kind, is that this type can be installed in tight spaces. Because of this, here’s a few benefits you may receive from this type of water heater:

  • Saves Space
  • Delivers on Demand
  • Saves Energy
  • Last twice as long
Tankless Water Heater Comparison

How Much Money Can A Tankless Water Heater Save Me?

Your up-front costs to purchase and install a tankless water heater will range from about $2,100 to $3,800, depending on the size of your home and the model you choose. We are committed to giving you the most competitive price as well as helping you select the most appropriate equipment for your family’s lifestyle.

Our customers don’t consider those costs alone — the total cost of ownership is what really matters. With its energy efficiency and durability, you can expect your tankless water heater to pay for itself within two to three years. In fact, it should pay for itself at least ten times during its long life, depending on your usage habits.

For homes that use 41 gallons or less of hot water daily, tankless water heaters can be 24%—34% more energy efficient than conventional storage tank water heaters. They can be 8% – 14% more energy efficient for homes that use a lot of hot water, around 86 gallons per day. You can achieve an even greater energy savings of 27% – 50% if you install a tankless water heater at each hot water outlet.

Selecting a Tankless Water Heater

Before buying a Tankless Water Heater, it would be wise for you to consider the following:

  1. Fuel Type
  2. Location, Size and Demand
  3. Application

1. Fuel Type

The first thing that you’ll need to decide when selecting a tankless eater heater is the fuel type. You will need to select between an electric tankless water heater or a gas-fired tankless water heater.

Requirements for electric tankless water heaters:
If you plan to purchase an electric tankless water heater, consider these electrical requirements:

  • Voltage  —  Many retailers sell units that will accommodate 110V, 120V, 208V, 220V, 240V, and 277V.
  • Amperage  —  Different electric water heaters will have various requirements in amp draw. You will want to ensure that you can support the electrical demands of your Electric Tankless Water Heater.
  • Circuit Breaker  —  You must ensure that you have a circuit or circuits that will support your electric water heater. It may be necessary to put your electric tankless water heater on its own circuit or circuits.

If you have any questions or concerns, you should consult with a qualified, licensed electrician for more information.

Tankless Water Heater - Vertical Venting Diagram

Requirements for gas-fired tankless water heaters:
If you plan to purchase a gas-fired tankless water heater, consider these venting requirements:

You will first need to identify whether your gas type is natural gas or propane. It is imperative that you examine your current gas line to ensure that it will meet the requirements of your new gas-fired water heater. The requirements of your water heater may exceed that of your existing tank-style water heater.

Next, you will need to consider venting requirements for your specific installation scenario. There are a few important things to keep in mind when purchasing the gas venting accessories for your gas-fired tankless water heater. Be sure that you purchase Category III stainless steel (UL1738 certified) venting for your gas-fired tankless water heater. “Type B” venting accessories are not acceptable. Also, be sure to check local building code to ensure that your specific needs will be completely met.

Additionally, many tankless water heater manufacturers offer gas venting “kits”. It is recommended that customers evaluate the needs of their specific installation to ensure that they will be getting all of the necessary gas venting accessories. Depending on where you will be installing the tankless water heater, a pre-made kit will probably not meet your needs. Ensure that you measure out the vent route and consider where the discharge will go through the wall or ceiling, consider the necessary clearances, and consider ample access to air for combustion, then buy the appropriate gas venting pieces.

*Please Note: Gas-fired tankless water heaters may still require a minimal electrical connection. Be sure to review installation requirements for the units you are considering for purchase.

2. Location, Size, and Demand

When deciding which tankless water heater to purchase, you will also need to consider where you will need hot water. Are you looking for a unit that will heat the water at one bathroom sink (single point application), an entire bathroom (multipoint application), or an entire house, apartment, or condo (whole house application)? It is important to recognize the number of fixtures that will require hot water. Each fixture will have its own demands. The chart below illustrates the typical flow rates (demand) for some standard fixtures:

Typical Flow Rates in Gallons per Minute (GPM)
  Lavatory Bathtub Shower Kitchen Sink Pastry Sink Laundry Sink Dishwasher
Flow Rates: 0.5 2.0–4.0 1.5–3.0 1.0–1.5 1.5–2.5 2.5–3.0 1.0–3.0

The flow rate is especially important, as tankless water heaters are commonly known to generate a temperature rise based on the flow rate demanded.

For example, a Stiebel Eltron Tempra 12, running on 240 Volt power, will raise the water temperature by 54°F at 1.5 gpm, 36°F at 2.25 gpm, and 27°F at 3.0 gpm, above the ambient incoming water temperature, up to 125°F.

A larger unit, like the Stiebel Eltron Tempra 36, running on 240 Volt power, will raise the water temperature by 92°F at 1.5 gpm, 92°F at 2.25 gpm, and 82°F at 3.0 gpm, above the ambient incoming water temperature, up to 125°F.

Temperature Rise Based on Flow Rate, Up to 125°F
Flow Rate 1.5 GPM 2.25 GPM 3.0 GPM
Tempra 12 54°F 36°F 27°F
Tempra 36 92°F 92°F 82°F

This means that if you are using a 1.5 gpm shower and a 1.5 gpm kitchen sink simultaneously, a total demand of 3.0 gpm, the Stiebel Eltron Tempra 12 will raise the temperature 27°F, whereas the Stiebel Eltron Tempra 36 will raise the temperature 82°F.

United States Climate Map

Cool (Northern) Climate, Warm (Southern) Climate Next, you should look at your ambient incoming water temperature. If you live in a cold climate, like New York, your incoming water temperature will likely be much lower than if you live in a warm climate, like Florida. Your best bet is to find out how much temperature rise you will need in order for your hot water to reach the desired heat. If the ambient incoming water temperature for your shower is 65°F, you are using a 2.0 gpm shower, and you want to raise that temperature to 115°F, you will want to look for a tankless water heater that will provide at least a 50°F temperature rise at 2.0 gpm (115°F – 65°F = 50°F). However, if you anticipate additional simultaneous demand, such as the hot water from a sink being used while someone is showering, you will need to add the sink’s gpm to the shower’s gpm in order to determine your overall GPM demand and then find the temperature rise necessary to meet your overall needs.

Incoming Water plus 2gpm shower plus Desired Output Water Temperature arrow You will need a tankless water heater that produces a 50°F temperature rise at 2 GPM.
Incoming Water
Desired Output Water Temperature

3. Application

You may have a specific application in mind for your Tankless Water Heater. Here are a few examples of the different models and their functionality for a specific application:

  1. Single Point Application:
    A single point application is one where only one fixture will require an Electric Tankless Water Heater.
  2. Thermostatic:
    The Thermostatic Tankless Water Heater serves as a booster for temperature loss from long pipe runs, dishwashers and sanitation. Thermostatic units are good for applications where precise temperature control is essential; such as schools, hospitals and laboratories.
  3. Whole House Indoor Use:
    Larger Whole House units are designed to serve an entire house, apartment, condo, or cabin, where multiple points of use will exist.
  4. Whole House Outdoor Use:
    Larger whole house units are designed to serve an entire house, apartment, condo, or cabin, where multiple points of use will exist.

Tankless Water Heater Installation and Maintenance

Now that you have selected the best tankless water heater for you, the time has to come to install it in your home or office. Proper installation and maintenance of your water heater can optimize its energy efficiency.

Proper installation of a tankless water heater depends on many factors. These factors include climate and local building code requirements. You should have a qualified, licensed plumbing and heating contractor install your water heater.

Do the following when selecting a contractor:

  • Request cost estimates in writing
  • Ask for references
  • Check the company with your local Better Business Bureau
  • Confirm the company will obtain a local permit, if necessary, and understands local building codes

Be sure you contractor first consults the manufacturer’s installation and instruction materials. Manufacturers usually provide the necessary installation and instruction manuals with the product. Your contractor should also contact your municipality for information about obtaining a permit, if necessary, and about local water heater installation codes.

Many tankless water heaters have a life expectancy of more than 20 years. They also have easily replaceable parts that extend their life by many more years. In contrast, storage water heaters only last 10 – 15 years.

You should consult the manufacturer’s website or literature, such as the manual, for detailed warranty information. Periodic water heater maintenance can significantly extend your water heater’s life and minimize loss of efficiency. Read your owner’s manual for specific maintenance recommendations.

Jeff Flowers

About Author

Jeff Flowers has been a self-described beer geek for over a decade now. When he's not chasing his daughter around, you can usually find him drinking a fresh brew and wasting too much of his time on both Google+ & Twitter.


  1. Tony Savage says

    This is some really great, in-depth info for consumers considering going tankless. Thank you for detailed explanation. I feel that going tankless is not the best and only decision for many homeowners. This is a great article I can share with my customers!

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