Tankless water heaters: energy-efficient hot water on demand

Have you ever run out of hot water during a shower? A tankless water heater can solve this problem. These devices heat water on demand instead of storing it in a tank, providing a steady flow of hot water whenever needed.

Tankless water heaters heat water instantly as it flows through the unit. When you turn on a hot water tap, cold water enters the heater, and a gas burner or electric element quickly heats the water to provide hot water immediately.

Tankless heaters are smaller than traditional water heaters since there’s no big tank. They also use less energy because they only heat water when you need it. However, they do cost more upfront to buy and install, so weigh the pros and cons before choosing one for your home.

In this guide, we’ll explain how tankless water heaters work, compare them to storage models, break down installation steps, explore maintenance tips, and help you decide if this upgrade is right for your home.

Here’s what you need to know:

Whether you’re renovating or simply looking to save on utility bills, understanding tankless systems will help you make a smarter, more efficient choice.

Understanding tankless water heaters

A tankless water heater provides hot water on demand without storing it in a tank. They offer energy savings and space efficiency compared to traditional water heaters.

How tankless water heaters deliver instant hot water

Tankless water heaters heat water as it flows through the unit, and the process is simple:

The hot water tap is turned on
Cold water enters the heater.
A gas burner or electric element quickly heats the water.

This gives a constant supply of hot water which is why these units are also called on-demand water heaters. They only use energy when hot water is needed, and this can lead to lower energy bills. Tankless heaters are smaller than storage tanks, too, so they can be mounted on walls to save floor space.

Comparing tankless to storage water heaters

Storage water heaters keep a large tank of hot water ready constantly, and this can waste energy heating water that isn’t used. Tankless units avoid this standby heat loss.

Tankless heaters provide endless hot water, while storage tanks can run out during high-demand times. However, tankless units may struggle to supply multiple outlets at once.

Upfront costs for tankless heaters are often higher, but they typically last longer than storage tanks. This can offset the initial price over time.

Installation can also be more complex for tankless units, as they may need upgrades to gas lines or electrical systems.

Gas vs. electric tankless water heaters: which is better for your home?

There are two main types of tankless water heaters: gas and electric.

Gas tankless heaters use natural gas or propane and can heat water faster than electric models. This makes them good for larger homes or high-demand situations.

Electric tankless heaters are often cheaper to buy and install. They work well in smaller homes or as point-of-use heaters for single fixtures.

Some units can be installed outdoors, saving indoor space and making venting easier for gas models. Condensing tankless heaters are a newer option. They capture exhaust heat to boost efficiency.

Installing and maintaining your tankless water heater

Installing a tankless water heater is a complex process that requires professional input, careful planning, and ongoing care.

How is a tankless water heater installed?

The first step is choosing a good spot for the unit and your installers need to ensure proper ventilation and there is access to gas and water lines.

Next, they’ll mount the heater on the wall securely and connect the gas line, water pipes, and electrical wiring. This part can be tricky and dangerous if not done right.

Finally, the venting system will be installed. This carries exhaust gases safely out of your home. The type of venting depends on the heater model and your home’s layout.

Why professional installation matters

While some handy homeowners might tackle installation, we strongly suggest hiring a professional. Licensed plumbers have the skills and tools to do the job safely and correctly.

Professional installation costs range from $1,000 to $2,000 on top of the unit price. This may seem high, but it’s worth it for safety and proper function.

Professionals will also handle permits and inspections, which are often required by local building codes. They’ll make sure everything meets safety standards to avoid potential issues.

Maintenance tips to extend lifespan and boost efficiency

Tankless water heaters need regular care to work well, and we recommend flushing the system once a year to remove mineral buildup. This helps prevent damage and keeps the heater efficient.

You’ll also want to clean the air intake filter every few months to keep dust and debris out of the unit. It’s an easy task you can do yourself.

For gas units, we suggest a yearly inspection by a professional plumber. They’ll check for gas leaks and ensure all parts are working correctly.

Tankless water heater performance and energy efficiency

Tankless water heaters offer impressive performance and efficiency gains over traditional tank models. They heat water on demand and eliminate standby energy losses.

Energy efficiency metrics

The Uniform Energy Factor (UEF) measures tankless water heater efficiency. Higher UEF ratings mean better efficiency and most tankless models have UEF ratings between 0.8-0.98, compared to 0.6-0.7 for standard tank heaters.

Tankless units can be 8-50% more energy efficient than tank models, but the exact savings depends on hot water usage. Homes that use 41 gallons or less of hot water daily can see 24-34% energy savings, according to the U.S. Department of Energy,

How heat exchangers improve tankless heater efficiency

The heat exchanger is key to tankless performance. It rapidly heats water as it flows through.

There are two main types of heat exchangers:

Non-condensing: Uses a single heat exchanger. They’re simpler and cheaper but less efficient.
Condensing: Has a second heat exchanger to capture exhaust heat. They’re more efficient but costlier.

Condensing models can reach 98% efficiency as they extract more heat from combustion gases before venting. This boosts performance and lowers energy use.

Flow rate and hot water demand

Flow rate measures how much hot water a tankless unit can provide and is given in gallons per minute (GPM). Most residential models offer 2-5 GPM. Larger homes or high-demand applications may need multiple units, as one unit may struggle to meet peak demand from multiple fixtures.

We recommend:

2-3 GPM for apartments or small homes
3-5 GPM for medium homes
5+ GPM for large homes

The flow rate limits how many fixtures can run at once with a tankless heater, and proper sizing is crucial for meeting a home’s hot water needs.

Are tankless water heaters worth it? Cost vs. benefits

Tankless water heaters come with both advantages and drawbacks in terms of costs and benefits.

Analyzing initial and long-term costs

The upfront cost of a tankless water heater is higher than a traditional tank model. You can expect to pay $1,000 to $1,500 for a gas unit and $500 to $1,500 for an electric one. Installation costs are also higher, often ranging from $1,000 to $3,000.

But tankless heaters last longer – up to 20 years compared to 10-15 for tank models, meaning you may save money in the long run by avoiding an earlier replacement. Tankless units are also more energy efficient and can lower your energy bills by 20-30% in many cases.

Space-saving design and extended lifespan

Tankless water heaters take up much less space than bulky storage tanks. A typical unit is about the size of a small suitcase and can be mounted on a wall. This frees up valuable floor space in your home. The compact size also makes tankless heaters easier to access for maintenance.

With fewer parts that can corrode or leak, tankless heaters tend to need less upkeep over time. Their longer lifespan also means less waste in landfills too, as you won’t need to replace a tankless unit as often as a traditional tank.

Evaluating cost savings and environmental impact

While the upfront cost is higher, tankless water heaters can save you money over time. The energy savings from only heating water on demand add up. For a typical family, this can mean $100 or more in lower energy bills each year.

Tankless units also waste less water as there’s no stored water to cool down, so you don’t need to run the tap waiting for hot water. This saves both water and the energy used to heat it.

The improved efficiency and longevity of tankless heaters make them a more eco-friendly choice. They use less energy and resources over their lifetime compared to traditional tanks.

Assessing if a tankless water heater is right for your home

Before switching to a tankless model, it’s important to assess your home’s infrastructure, hot water habits, and household size.

A tankless unit isn’t a one-size-fits-all solution, let’s explore what you need to evaluate.

Evaluating household water demand and usage patterns

Tankless heaters provide continuous hot water, but only within their flow rate limits. to determine if one unit is enough, list the maximum number of fixtures used at the same time (e.g., shower, dishwasher, and washing machine). calculate the combined gpm and compare it to the capacity of your desired model.

For example, if you often run two showers and a washing machine at once, you’ll need at least 6–7 gpm. homes with frequent simultaneous usage might need multiple units or a hybrid solution.

Comparing leading brands of tankless water heaters

With so many options on the market, it helps to know how top brands differ in performance, warranty, and customer satisfaction. Let’s look at what sets the most trusted names apart.

top manufacturers and standout features

Rinnai: known for premium gas models with high flow rates and reliability. Rinnai offers wifi monitoring and a 12-year heat exchanger warranty.
Navien: specializes in condensing models with industry-leading energy efficiency. Navien units are praised for quiet operation and compact design.
Ecosmart: offers affordable electric tankless heaters with digital temperature control. Ecosmart is ideal for small homes or point-of-use setups.
Noritz: offers commercial-grade durability and strong warranties. Noritz is great for large homes or high-demand applications.

When choosing a brand, consider your energy source (gas vs. electric), available space, and whether smart features or ultra-efficiency matter most for your needs.

Conclusion

Switching to a tankless water heater isn’t just about upgrading your plumbing, it’s about choosing a smarter, more sustainable way to live. These systems provide hot water exactly when you need it, reduce energy waste, save space, and last longer than traditional water heaters.

While the upfront cost can be higher, the long-term benefits, lower utility bills, fewer repairs, and reduced environmental impact, often outweigh the investment. Plus, with proper maintenance, your system can run efficiently for decades.

If you’re tired of cold showers and rising energy bills, it may be time to consider going tankless. contact our team to learn more about installation options and discover how a tankless water heater can transform your home’s comfort and efficiency.

Meet the Author

Service Scalers

What is a Tankless Water Heater: Efficient on-demand hot water solution