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Thinking About Buying a Tankless Water Heater? We Can Help You!

all about tankless water heaters

People don’t generally think about their water heaters until they take a shower one day only to painstakingly discover that the water is cold because someone else has used up all the hot water.

And, the worse part? Waiting for the tank to fill back up so it can heat the water again.

That’s where tankless water heaters come in.

Tankless water heaters, also known as demand or point-of-use water heating, offer unlimited hot water.

Yes, endless hot water!

That’s because these heaters work by using heating elements that are activated by the flow of water ONLY when you need hot water, i.e., when you take a shower.

Tankless units don’t store hot water, that is why there is no storage tank – hence tankless. For this reason, tankless units’ heaters can reduce the standby money losses typically associated with hot water heating while minimizing physical space in your home.

Endless hot water, lower energy bills, and additional storage space are just a few of the wonderful advantages of switching to tankless. But, are there any downsides? And, do you really need to go tankless?

Keep reading to find out.

Tankless Water Heaters: How Do They Work?

Tankless water heaters are impressive pieces of technology. While they are increasing in popularity in the United States, the technology has been around for many years. Only recently, in the last decade or so, have they been technologically advanced enough that they provide an average home with an unlimited supply of hot water at a reduced cost (when compared to traditional hot water tanks).

When you to turn on the water, the water flow then turns on the heat exchanger. The water then heats up to the temperature you’ve pre-selected.

Simply put, cold water gets into the water heater through the cold-water pipe. Then it goes through several heating elements and gets out of the unit through the hot water pipe. The input and output temperature of the water is monitored within the unit by use of sensors.

After heating, the water then travels to your faucets and showers through water pipes. As hot water gets depleted from the water heater, the new cold water enters the tank. That means the water constantly passes through the unit and is not stored.

Tip: If you’re using a point-of-use system, you’ll get hot water right away. If, however, you are using a whole-house unit, there can be some delay because the hot water needs time to travel to the faucet. The U.S. Department of Energy’s website explains this further.

If you are looking to buy a tankless water heater system, then be sure to check out our reviews of the top tankless water heater systems for your home

Types of Tankless Water Heaters

Now that we have a general idea for how a tankless unit works, let’s talk about the different types. As you will learn in this article, not all these units are made the same. There are generally two specific fuel types associated with tankless heaters.

Here is what sets these 2 types apart:

Electric Tankless Hot Water Heaters

The heating elements in electric heaters convert electrical energy into heat. The elements are usually placed in direct contact with the water so that heat is directly transferred into the flow. The electric elements then heat up when the flow of water turns on and stops when the water flow turns off.

Readers who are looking to buy an electric tankless hot water heater should check out our list of the top models on the market in our electric tankless hot water buying guide

Gas Powered Tankless Hot Water Heaters

The heating elements in gas heaters are in the form of heat exchangers that transfer heat from the hot combustion of gases to the water. Because of this combustion process, a gas tankless water heater requires access to an exhaust vent.

Electric or Gas? Is There a 'Better' Option?

For most people, an electric tankless water heater is usually a preferred choice over a gas. Aside from them being cheaper to buy and much less expensive to install, latest advances in technology allow them to accomplish some really neat things such as, meeting high flow rate demands in most climates, have the ability to last longer, come with extended warranties, requiring less maintenance, and are overall better for the environment.

People have also found that the maintenance of an electric heater is usually easier than gas. With electric, the most you will have to do is ensure that the screen filter that prevents large debris from entering the system is free and clear of obstructions. With gas, you’ll need an annual inspection to ensure safe fuel combustion and operation.​

Choosing A Tankless Water Heater - What You Need To Know

These devices are extremely impressive, and while they may be much smaller than their traditional counterparts, don’t let size fool you, these units are sophisticated pieces of technology. 

When choose a tankless unit, you need to know three things:

What utility services are available for your home?

If your home is a hybrid between both gas and electrical service, you can choose whichever tankless heater best suits you and your family’s needs. If your home doesn’t have natural gas, you may need to consider if an electric heater will meet you and your family’s needs.

What are your households water flow requirements?

You will need to estimate how much water you think will be used at the concurrently. For example, if you have a one-person household, you are unlikely to have two showers running at the same time, but maybe you would like to be able to have the capacity to run your dishwasher, your washing machine, all while taking a shower at the same time.

What is the groundwater temperature in your region?

Let us say the average person showers with 105˚F water that means if the water entering your home is 70˚F, your tankless heater will only need to heat the water an additional 35˚.

Tankless Water Heater Options For Your Home

tankless water heater for your home

For people who are considering going tankless in their home, you have 2 options:


A whole-house installation is when a single tankless water heater provides hot water for the entire home. The water heating capacity of electric is based on your home’s electrical system. Most homes in the U.S. typically have electric service in the range of 100-150 amps. Older homes tend to have only 100 amps or lower. Due to this condition, installing electric tankless water heaters will often require an upgrade in the home’s electrical system to 200 amps or more (depending on the capacity of the unit to be installed).


In point-of-use installations, electric heaters are more popular than gas heaters because the electric units’ smaller physical dimensions allow them to fit into small spaces such as the cabinets under your sink.

Also, electric tankless units do not require combustion air and an exhaust vent, and thus can be placed practically anywhere in the home! A homeowner choosing to install heaters at the point-of-use may have several small units located at different locations in the house. However, the total number of units that can be installed is still limited by the home’s electrical system capacity.

Tip: Larger homes may sometimes need more than one unit. Tankless units can be used for both residential and commercial purposes.

Tankless Options For Businesses

Tankless units can be utilized in any business that requires hot water. Hot water consumption patterns in most commercial buildings are identified by either very high hot water demand, or very low hot water demand.

For example, hotels and hospitals are cases of very high hot water demand, while small retail and offices are examples of very low hot water demand.

In situations where there is low demand for hot water, the economic benefits reducing and eliminating standby heat losses by using point-of-use tankless units make them even more favorable.

Cost & Lifespan

hile the startup cost is more than let’s say a conventional storage water heater, tankless will generally last way longer, have lower operating costs, and lower energy costs. These benefits outweigh its higher initial purchase price.

Generally, these units have a 20+ years life expectancy. The neat thing about them is that they have replaceable parts that easily extends their life by more years. When comparing this to storage water heaters, these conventional heaters last 10–15 years.

Small-capacity models are available at prices similar to conventional storage water heaters. It’s been found that small electric heaters (1-2 GPM) can go as low as $200 per unit, while larger units (3-4 GPM) are available for $625-$800.

Tip: GPM = gallons per minute of hot water the tankless water heater can provide.

Installation Costs

As we mentioned earlier, tankless heaters generally have a higher initial cost than conventional storage water heaters.

Cost is typically higher if you are installing more than one unit in your home/business. On the bright side, however, retail prices are run by the capacity of the unit and do cover a WIDE range, depending upon the brand.

To put this in perspective:

Installation costs for conventional storage water heaters are in the range of $300-$850. In contrast, installation costs for tankless units can fall in the range of $250-$450 for electric units and $350-$700 for gas-fired units.

Note: This doesn’t include any additional costs for electric or gas service upgrades.

Tankless Water Heaters: Advantages & Disadvantages

So now that we understand how these units work, plus the different types, let’s break down the advantages and disadvantages of installing a tankless water heater starting with the advantages:

Long-Term Energy Savings  

This advantage is probably the most significant advantage of all. Even though a tankless unit can cost more initially, it usually costs LESS to operate because of lower energy use.  

Unlimited Hot Water  

As we learned, flow rate determines the amount of hot water the heater can produce, however, it can deliver the hot water at that flow rate ENDLESSLY. While this is great, it can also be an environmental downside, as running out of hot water limits our use, but a tankless unit provides NO restrictions.  

Takes Up Less Physical Space  

Most if not all tankless units can be mounted on a wall or inside a building’s structure which means less physical space for heating water. Even systems that can’t be installed on walls take up less space than a tank-type water heater.  

Reduced Water Damage Risk  

No stored water means there are no risks of water damage from a tank failure or rupture.  


An added safety advantage derives from reduced exposure to dissolved toxic metals, which occurs at higher concentrations in hot water and resides in conventional water heater tanks for long periods.  

They Can Improve The Value of Your Home  

A tankless unit can add value to your property and help increase your asking price. Even if you don’t plan on selling your home any time soon, these tanks can last a very long time.  

Longer Warranties  

Tankless unit typically have an extended warranty. Larry Murdock, a water heater specialist with Caffi Contracting Service in Alexandria, Virginia, says the warranty is usually 15 years for a tankless and a six-year warranty for traditional water heaters.  

Kind To The Environment

Switching to a tankless is great for the environment. However, in most regions, especially those that generate electricity from sources that do not increase greenhouse gases (hydro-electric generators, nuclear, wind) switching to an electric unit is a far better choice. Since electric tankless water heater are much smaller, the impact on landfill space decades down the road will not be as significant.  

Here are some disadvantages:

Startup costs

Installing a tankless unit comes at a raised cost, particularly in retrofit applications. They are particularly expensive in areas such as the US where they are not dominant, compared to the traditional tank design.

Some Delay

There is a short delay when the water flow begins and when the heater’s flow detector activates the heating elements or gas burner.

Power Performance

Tankless units rely on the water pressure that is delivered to the property. If a tankless unit is used to provide water to a shower, then the pressure is the same as the water pressure being delivered to the property.

Time-of-Use & Electrical Peaks

For households using time-of-use metering, a tankless electric unit may increase operating costs if the hot water is used during peak times.

Power Outages

During a power outage, electrical units cannot supply hot water, unlike tank based heaters which can provide the hot water stored in the tank.

Tankless Water Heater: Cold VS Warm Climates

Depending on where you reside in the world, you’re probably wondering if climate makes an impact on whether you can have a tankless unit. It’s true that when it’s colder outside, it’s much more challenging for these units to provide the hot water you need.

It’s important to take into consideration your geographical area as that will affect the temperature of your source water

In cold climate areas, you may need to have a 200 AMP electrical service to run an electric tankless water heater. In warmer climates, you may only need 100, 125, or 150 AMP electrical service.

However, gas units can work well, even in colder climates, as long as the unit has been sized accurately to meet the hot water needs of your household.

In warmer climates, your water temperature will likely be much higher. In this example, you’d need a demand water heater that produces a temperature rise of 55°.

9 Tips For Tankless Units In Cold Climates

1. There are two factors when determining whether your tankless unit can keep up in a cold climate:

  • Fuel type (electric/gas)
  • Size

When the groundwater gets colder in winter, the electric tankless water heater may not give you the “endless” hot water you’re expecting.

So, if you do live in a cold climate like Massachusetts and are looking for a tankless water heater, the best thing to do is go gas!

Many manufacturers build the tankless gas units to provide freeze protection to accommodate sub-zero temperatures.

2. The next step is to get a professional plumber to measure the tankless water heater size you’ll need to keep your family comfortable in cold weather.

A professional with experience with tankless water heaters can address the size of the system you need to accommodate your usage to ensure the unit provides enough hot water for you and your family.

A professional will typically look at these two factors to find the size you need:

Flow Rate: the flow rate you need depends on how much hot water you use as well as the ground water’s temperature in cold weather.

Temperature rise: the temperature rise is how much the tankless water heater needs in order to heat the groundwater so that it can get to the temperature you want.

3. In cold-weather areas, it’s crucial that the person doing the installation insulates the pipes feeding the unit.

4. Choose a size for the cold weather.

For colder climates, the first thing you need to do is size your tankless unit properly. A unit that can produce around 8.5 gallons per minute in the summer might only produce 5.5-6 gallons per minute in winter.

5. Propane and gas tankless water heaters are protected from freezing weather through an electric ceramic heater that surrounds the heat exchanger.

6. Proper venting is critical in making sure that your tankless water heater is not vented into oncoming freezing winds while the vent run is long enough to keep the heater working properly. 6 feet is the recommended minimum for cold areas.

7. Some models take in air from the outer pipe, and if the model happens to be blocked by snow, the unit with turn itself off. You’ll need a couple of feet of clearance around the vent for the unit to function correctly.

8. Consider the condensation when installing a condensing unit, be sure to run the condensate drain in a conditioned space. If the condensate drains freezes, an error code will stop the unit from creating hot water.

9. Have a backup power option. A propane standby generator or battery backup system ensures you’ll keep the hot water flowing even during a power outage.

3 Tips For Choosing The Right Size Tankless Water Heater

When determining whether you’ll need a whole house or a remote application, such as just a bathroom in your home, you should never, under any circumstance, try and save money by under-sizing your tankless water heater.

Here are a few tips to guide you along in choosing the right size tankless water heater:

1. When determining the number of devices, you want to run and their total flow rate, you’ll need to add up their flow rates (gallons per minute). This number is the desired flow rate you’ll want.

2. Determine the required temperature rise. To do this, subtract the incoming water temperature from the desired output temperature. If you’re still not sure, you can guesstimate that the incoming water temperature is 50°F. By using a low-temperature assumption, you ensure that you won’t under-size your tankless unit.

3. You’ll want to size your unit so that it meets or exceeds how much hot water you’ll need at the same time. For example, an average shower will be between 104–106° and uses 2.6 gallons of water.

Assuming that the water that is coming into your home is 40°, you’ll want enough hot water to run two showers. Therefore, you’ll need a tankless water heater that can produce at least a 60° rise in temperature at 5.2 gallons per minute.

If you happened to be running a shower and the washing machine at the concurrently, then you would need roughly 4.5 gallons per minute from the water heater.

So, Do You Really Need A Tankless Water Heater?

Well, that all depends on you!

As we’ve mentioned, there are several benefits to going tankless.

To help you determine if going tankless is the right thing for you, here are some things to consider:

  • Do you want a unit only in one particular room in the home or the entire house?
  • What type do you feel is best for you?
  • Keep in mind that electric models will need the proper voltage, amperage and circuit breaker.
  • Gas-fired models need to be vented.
  • Tankless water heaters need to be within 50 feet from a power source and can be mounted on an interior or exterior wall.
  • You will need to hire a credible plumber or A/C contractor to install it. Usually, the installation is included when you purchase a unit from a dealer.

The Tankless Water Heater Buying Guide

Before you set out to buy your new water heater, always conduct thorough research about the available options and the specifications of each type. It’s imperative that you don’t skip this step as this will help you in later on when choosing the right one for you and your family.

There are several essential points to note before setting out in the markets, such as:


Almost all water heaters are priced and sold based on their capacity. They are classified for family sizes according to their holding capabilities too.

For instance, a smaller family may not have much needs, whereas a larger family may require more water for showers, dishwashing, and clothes washing. Larger families will therefore need a larger tank to get more hot water to last them through the day.

You’ll also need to consider the GPM to know the amount of water they can heat and provide in the first one hour.

If you are a large family and require hot water at different places at the same time, you may install two or three units of the same to keep the water going warm to meet your requirement.

Anti-scaling and Warranty

Many models are available with the benefit that they do not let any minerals settle at the bottom. This benefit increases the lifespan of a unit. As mentioned earlier, tankless water heaters come with dependable warranties – anything over ten years is a good sign.

Drain Valves

Drain valves are made for drainage purposes. There are usually two types: plastic and brass. It is best to go for the brass ones for more excellent durability.


New models come with digital displays. These help you with customizing and conserving energy while the hot water is not in use.


Your home may have either electric, gas or a hybrid fuel source. You need to consider the source you have in place, for ease of installation of a new water heater. The electric type involves the use of a single or dual element for heating the water, whereas the gas types use a burner for heating.

Temperature Control

The latest models allow greater temperature control and other features to operate it as per your requirements. This further increases their efficiency in energy as well as operational costs.

Take Away

As we’ve learned, tankless water heaters, or on-demand water heaters, operate differently than traditional water heaters. There are various benefits to switching to a tankless, while initial costs are higher than conventional models, tankless water heaters save money in the long run. Whether you choose gas or electric, these units are a fantastic investment. They provide you with hot water whenever needed while also keeping energy bills down. Moreover, since they are slimmer than their traditional counterparts, your water heater will require only a tiny bit of storage space. We’re sure that once you go through these essential tips on tankless water heaters, it will be much easier for you to decide which one is right for you.

Here at the iWaterPurification, it’s our goal to educate the public on water safety, treatment and purification. We achieve our goal by providing the highest quality publication related to the treatment of water in the home, in the office or in the outdoors.

We are proud to support a number of charities dedicated to providing access to clean water to people in need all over the world. We also proudly award one $1,000 scholarship every year with our iWP Clean Water Scholarship, in support of research and development into clean water technology. If you’d like to get in touch with us to partner or get involved in our clean water initiatives, please contact us.

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