Tankless Water Heater Buying Guide

Published February 6,

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In recent years, tankless water heaters have become a popular alternative to traditional models. Also called on-demand or spontaneous water heaters, tankless designs heat water only when needed. They can reduce energy consumption and take up less storage space than water heaters with large tanks.

This guide explores how to choose between the different types to find the best tankless water heater for your home.

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Table of Contents

1. Benefits of Tankless Water Heaters

2. Choosing the Right Tankless Water Heater

3. Tankless Water Heater Installation and Maintenance

4. Gas vs. Electric Tankless Water Heaters

5. Non-Condensing vs. Condensing Tankless Water Heaters

6. Point-of-Use Tankless Water Heaters

Benefits of Tankless Water Heaters

Compared to those with tanks, tankless water heaters provide a wide array of valuable benefits. Tankless water heater advantages include:

• Energy efficiency – A key difference between tank and tankless units is the heating method. Tank heaters hold a set amount of hot water in their tanks that is constantly reheated to maintain temperature. But tankless models only heat water when necessary, reducing energy usage. The U.S. Department of Energy has found that tankless heaters are 24-34 percent more energy efficient than tank heaters.
• Hot water supply – With a steady water supply, tankless units can provide continuous hot water, even during peak usage times. But tanks can run out of hot water, especially if multiple people use them simultaneously.
• Space requirements – Generally, tankless water heater sizes are smaller. They can also be mounted on a wall, which is useful for apartments.
• Product durability and lifespan – If properly maintained, tankless water heaters can typically last up to 20 years or more, decreasing waste. Tankless models also don’t rupture or leak, reducing water damage risks.
• Environmentally friendly – With their advanced technology, tankless water heaters tend to consume less energy overall. These units reduce homes' greenhouse gas emissions and produce a smaller carbon footprint. They also promote water conservation, reducing waste and increasing sustainability. And they last longer, decreasing the environmental impact related to their manufacturing and disposal.
• Utility savings – The U.S. Department of Energy estimates that tankless water heaters can provide energy savings of up to 50 percent. Homeowners may qualify for significant rebates and incentives from government agencies and utility companies. These models may also boost your home’s value.

Note: Check with your local utility company or government websites to see if tankless water heater rebates are available in your area.

Choosing the Right Tankless Water Heater

When it comes to tankless water heaters, the most important thing is determining your home’s water usage. But you’ll also need to account for the incoming water’s temperature. And you need to calculate how much heat the unit must add. The following factors will help you to select a tankless model.

Water temperature – To identify how much incoming water must be heated, subtract the incoming water temperature from your desired temperature. For instance, to heat 60-degree Fahrenheit (F) water to 120 degrees, you'll need a heater that can add 60 degrees F. Ideally, you’ll need one that provides the needed combination flow rate and minimum temperature rise.

Flow rate - You must calculate the flow rate, which is the gallons per minute (GPM). This shows how much hot water is needed for appliances running at the same time.

• The flow rate should be at least 3.25 gallons (12.3 liters) per minute. Generally, a shower uses 1-2 GPM, while a dishwasher uses 1-2.5 GPM.
• To determine rising temperatures, subtract the incoming water temperature from the desired output temperature. Assume that the incoming water temperature is 50 degrees F (10 degrees Celsius).
• You can estimate the GPM by holding a pan or bucket under a faucet or shower head and measuring the flow for one minute. You can also estimate the temperature by holding a thermometer under a cold-water faucet. The water should heat to 120º F (49º C).
• To reduce flow rates, you may prefer to install low-flow water fixtures.

Groundwater temperature - Knowing your area’s groundwater temperature helps you know much to heat the water. For example, in the southernmost United States, the average groundwater temperature is 65-70 degrees F. But the most northernmost states often see an average of 40 degrees or less. So, in an area with 55-degree groundwater, to get 100-degree water, a unit with a minimum temperature rise of 45 degrees is needed.

Household numbers – The number of people in homes helps to determine tankless water heater sizes. In most cases, if you live alone, you’ll need a smaller heater. For two residents, a 6–8 GPM heater is effective, while a family of four might need an 8–10 GPM heater. You may also use these measurements:

• For a home with one bathroom and 1 or 2 residents, consider a water heater of 140,000 BTUs (British thermal units, the standard unit of measuring heat).
• For a home with two bathrooms and 2 or 3 residents, consider a water heater of 190,000 BTUs.
• For a home with three bathrooms and 3 to 5 residents, consider a water heater of 380,000 BTUs.

Note: Safety experts generally recommended setting your water heater to 120 degrees F. Higher water temperatures, particularly 140-degree F, can significantly increase scalding risks.

Tankless Water Heater Installation and Maintenance

Whether used indoors or outdoors, the biggest consideration when installing a tankless water heater is its flow rate. The main differences between these models are the installation location and weather considerations.

• Indoor tankless water heaters are designed for controlled environments, like inside homes. They require sufficient space, ideally near a wall or in a utility closet. This provides easier access to plumbing lines, for improved maintenance and servicing. Depending on local building codes and the type of fuel source, more complex venting systems may be needed for tankless models.
• Outdoor tankless water heaters can be simpler to install in existing homes than indoor units. They may be slightly larger, but can be placed on exterior walls, saving interior space. Outdoor tankless water heaters may require fewer plumbing modifications. They're also made to withstand harsher elements, like heat or freezing temperatures. But weather-related issues can impact their efficiency.

To ensure your tankless water heater works properly, regular maintenance is crucial. Regardless of indoor or outdoor use:

• Clean the water inlet filter every few months to remove sediment.
• Descale the unit every 12-18 months to remove mineral deposits. If you have hard water, more frequent descaling is necessary, as mineral buildup can greatly reduce efficiency.
• Perform annual servicing to remove mineral buildup and ensure optimal performance. You may want to have this done by a professional service.

Gas vs. Electric Tankless Water Heaters

Once you’ve decided to install a tankless water heater, you must choose either a gas or electric model. Regarding the “electric vs gas tankless water heater” debate, know that both types have their own advantages and disadvantages.

Electric tankless water heaters utilize an electric element to heat the water. When making the electric vs gas tankless water heater decision, know the following:

• Electric units usually have higher efficiency ratings, around 98 percent, than gas models.
• They have lifespans comparable to traditional water heaters.
• Regarding tankless water heater sizes, electric models are more compact.
• Electric models are widely available.
• When considering an electric vs gas tankless water heater, electric units are easier to install than gas units. You will only requiring electrical wiring.
• Less maintenance is required for electric heaters than gas units.
• Electric tankless water heaters typically have smaller upfront costs than gas models, especially when local electricity prices are low.
• Household electrical systems may need to be upgraded. This may increase upfront costs, unlike that with gas water heaters.
• In most cases, electric models have lower flow rates than gas models. They’re ideal for smaller households with lower hot water demands.

Gas tankless water heaters use a gas burner to heat the water. They employ two types of fuel, natural gas or propane.

• They usually have longer lifespans than traditional (tank) or electric tankless water heaters.
• Gas models can produce a larger temperature rise per gpm than electric. This makes them the best choice for large households with higher heating demands.
• They are less (80-85 percent) energy efficient than electric units.
• Regarding the electric vs gas tankless water heater choice, gas models have a higher upfront cost. That's because they require additional venting systems and gas lines. But their operating costs are lower, especially if local natural gas is less expensive.
• Gas units typically require more maintenance than electric units.

Non-Condensing vs. Condensing Tankless Water Heaters

The two primary types of tankless water heaters are non-condensing and condensing.

• Non-condensing tankless water heaters originated first. They use heat exchangers to create hot water and vent the exhaust outdoors. These units require stainless steel flue pipes to withstand the heat of the exhaust, which can be more expensive than condensing heaters. They also tend to have lower installation costs and, with simpler technology, fewer opportunities to malfunction.
• Condensing tankless water heaters, developed more recently, use the high-temperature exhaust as an additional means of heating the water. These units tend to be more heat-efficient than other water heaters. They can also use less expensive PVC in the venting pipes but be more expensive overall.

Point-of-Use Tankless Water Heaters

Point of use tankless water heaters provide an alternative or supplement to models designed to supply a whole house. Relatively small, they can often fit inside a closet or cabinet. They tend to be dedicated-use devices, heating water for a single shower, washing machine or more. These models can be significantly less expensive than water heaters designed to heat a whole house. They may be more efficient as a supplement to a traditional water heater than as a replacement for one.

The best tankless water heaters for your home may be more expensive than traditional water heaters. However, tankless water heater installation offers energy efficiency that can save you money in the long run. Use The Home Depot Mobile App to see our selection of tankless water heaters and have it delivered to your doorstep.

So, you’re thinking about buying a tankless water heater for your home – but you have no idea where to start? Well, no worries because you’ve come to the right page! Tankless water heaters can help you save money and space – This is going to be your essential guide to choosing a tankless water heater for your home.

Let’s go over the top 9 tips you need to know!

1. The Benefits of Tankless Water Heaters

Here are a couple of the benefits of having a tankless water heater in your home. These are things you should keep in mind while searching for your perfect water heart.

Taking Up Less Space

The way tankless water heaters produce instant how water for anything in your home. Instead of having a huge bulky tank that holds water for you, you have a small compact device that heats water as it flows through it.

Unlimited Hot Water

With this type of water heaters, there is no limit on your water storage. You can run the hot water as long as you want. You never have to worry about the person before you in the shower taking up all the hot water!

Long-Lasting

Tankless water heaters have double the lifespan compared to a normal water heater. The most standard can last you up to around 20 years.

Energy Bill

Having a quality tankless water heater installed in your home could potentially cut your energy bill in half! These units are super-efficient and can save you a ton of money.

2. Find Out What Size Will You Need

One of the first things you should do is find out exactly what size tankless water heater you will need. According to the U.S. Energy Information Administration, the average household in the United States typically uses 64 gallons of water every single day. Needless to say, that is a ton of water! So how do you figure out what size of a tankless water heater you’ll need?

There are quite a few different types and sizes of tankless water heaters. Instead of looking at capacity, aka there are 60 gallons in your normal water tank, you want to look at gallons per minute (GPM).

Tankless water heaters also use the Britsh Thermal Unit input to help determine efficiency ratings to go along with GPM.

So you will need to look at your household’s GPM, BTU’s, and your home’s temperature rise. Here is how to find that out –

Looking At BTU’s

A single BTU is equal to the same amount of energy that is required to increase the temperature of one pound of water by one degree f. Thus the higher the BTU’s on your water heater, the higher your water flow will be.

When comparing your BTU’s and GPM’s, it typically will show that 31k BTUs can produce 1.2 GPM or 190k BTU’s can produce 5.7 GPM.

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Calculating GPM

Look and see the number of devices in your home that will need to have hot water from the tankless water heater. Then determine how many of them you might use at any one time. Then simply add the GPM of all those devices.

For Example,

Flow rates for tankless water heaters will range from 1.2 to 6 GPM. Generally, a simple sink would be rated at 1.2 and a shower at 2.6 GPMs. So a tankless water heater at 4 GPMs could handle both a shower and sink at the same time.

Calculating Temperature

Find the temperature of the water that is entering your home and then subtract that from your desired hot water temp.

Once you’ve calculated this out and found the flow rate for a potential new tankless water heater, then you’ll know whether it will be able to handle the hot water demand in your household.

3. Take a Look at Warranties

You want to make sure you look over any warranties that may come with a new tankless water heater. Good quality heaters will come with an extended warranty that will keep you covered if it ever brakes down.

Keep in mind the type of water that flows into your home as well – If it’s hard water, it may cause wear and tear on your new device faster. If your water is hard, then you will want to find a tankless water heater that has a longer warranty.

Remember that this is a device that is essential to everyday life and you’ll be using every single day – so find a quality warranty that covers you for your new device!

4. Water Heater Efficiency

Tankless Water heaters can save you money with how efficient they are – they will always outperform normal water heaters. When looking at a tankless water heater, they use an energy rating (EF – Energy Factor) to master how efficient the device is.

EF Rating

The higher the EF rating, the best and more efficient the device will be. EF is determined by the amount of energy that is from your water heater and then divided by the energy that goes into the device.

5. Gas-Fueled Heaters

If you can use natural gas or propane, then having a gas tankless water heater is a great idea! These units give you the fastest response time and heat output.

Although you have instant heat at a quick response time, using a gas unit will typically take up more gas than your traditional water heaters. So remember to keep this in mind in case you choose one of these, you may need to bring in more gas to your home.

With gas units, you will also have an ignition, which will play a role in a few differences for these units. There are 3 different types to look at when purchasing one of these devices.

Power Ignition

These require no batteries or a connection to your electric system. They are activated when water starts to flow through your new device and a turbine.

Direct Ignition

With direct ignition, you will need to connect it to your electrical system or with batteries. This type is simply ignited as soon as the water starts to flow through the device.

Standard

Just like with traditional water heaters, a pilot light will continuously burn – This not needing to be connected to electric or detected any water flow.

6. Electric Water Heaters

Purchasing an electric tankless water heater can be much cheaper than a gas unit. Your typical electric heater can be found from 300 to 500 dollars cheaper than gas units.

They also tend to be more efficient and are environmentally friendly. However, the downfall here is that electric water heaters tend to take up more energy.

The electric ones also have a more simple design. So, when it comes to repair or maintenance, working with electric rather than gas can be easier and cheaper.

Another great thing about these types of units is that they release no exhaust gases. Since they don’t produce any exhaust they also require no venting.

Now that we’ve looked at the electric heaters, let’s take a look at the gas units.

7. Your Climate

Another thing to look at when choosing a tankless water heater for your home is the climate you live in. This can help you determine the right unit that is perfect for your household.

Depending on your climate, it can play a big effect on your GPM rating. As we discussed earlier, when determining the GPM rating, you look at how cold the water coming into your house is. The colder it is outside, the harder it will be to heat your water, which will then bring down your GPM.

This will also be different during each season, so you should look at the coldest month of the year for your specific climate and use that as your base for determining GPM.

Likewise, if you are in a warmer climate most of the year than having a higher GPM rating may not be your first priority. Instead, consider looking at an outdoor unit that can heat your water in that climate.

8. Venting a Tankless Water Heater

Another thing to consider when looking to buy a new tankless water heater is venting. Will you need to vent your unit?

Indoor Units

Not all units will need to be vented – In fact, only indoor gas-fueled tankless water heaters will need to vent. Because electric units don’t emit any exhaust fumes, you won’t have to worry about this.

Venting a gas unit isn’t like venting a traditional water heater. You should always consider hiring a trained professional to assist you with the water heater installation.

Just remember, if your unit will be outdoors than venting will not be required. Venting is only important when it is in a confined space and inside a building with people.

Outdoor Units

These types of units are designed to be outdoors and can handle the elements. Instead of trying to figure out how to vent an indoor into the outside, you no longer have too.

Although these are built to withstand the outdoor elements, they have their limitations. If you are in an area that regularly sees extremely low temperatures, it may be a better idea to find a different option.

A great benefit to this type of device is that they are much cheaper than your indoor devices and are easier to install.

9. Tankless Water Heater Maintenance

When it comes to maintenance with tankless water heaters, this can vary depending on the type of unit that you went with. Let’s look at each one and the differences.

Maintenance For Electric Units

These tend to have very little maintenance. All you can do for these units is a simple cleaning of the water inlet. You should do this on a regular basis – Other than that, electric tankless water heaters require no maintenance.

Maintenance for Gas Fueled Units

Gas units require a bit more maintenance than electric units do. Rather than simple cleaning, these units will need to be inspected regularly. This should also be done by a reputable company that has trained professionals.

Ultimately when looking at tankless water heaters, determine whether you will want to deal with having to do maintenance and whether you would have to hire a professional to handle preventative maintenance for the unit. If you can perform the maintenance, then consider getting a gas-fueled unit, otherwise, it might be better to stick with an electric unit.

Wrapping Up Tankless Water Heaters

When you’re looking to buy a tankless water heater, there is a bunch to keep in mind and remember. This is a big decision, so take your time and make sure you do you’re researching on the unit before you purchase it.

• Think about why you’re purchasing a new one
• Find out the exact size you’ll need
• Check out the warranty for the unit
• Look at the efficiency rating for the unit
• Determine whether an electric or gas heating right for you
• Will you need to vent the unit
• Take into consideration the climate you live in
• Will the unit needs maintenance
• Can you perform the maintenance or will you need to hire a trained professional near you

After you’ve considered all of this, you’ll know the exact unit that is right for you home. Now all you have to do is purchase and install!

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