Why Choose a Tankless Water Heater?
Tankless water heaters, also known as on-demand water heaters, provide hot water only when needed, making them more energy-efficient and space-saving than traditional tank water heaters. They reduce standby heat loss, lower electricity bills, and have a longer lifespan. If you’re considering upgrading your water heating system, this guide will help you make the best choice.
1. How Does a Tankless Water Heater Work?
Unlike traditional water heaters that store and continuously heat a large volume of water, a tankless water heater heats water only when a tap is turned on. Cold water travels through a heat exchanger and is instantly heated by either gas or electricity, providing hot water on demand.
Pros & Cons of Tankless Water Heaters
✅ Energy efficient – No standby heat loss, saving up to 30% on energy bills.
✅ Space-saving – Compact design fits in smaller areas.
✅ Endless hot water – No need to worry about running out.
✅ Longer lifespan – Lasts 20+ years with proper maintenance.
❌ Higher upfront cost – More expensive than traditional tanks.
❌ Limited flow rate – May struggle with multiple simultaneous uses.
❌ Installation complexity – Often requires professional installation.
2. Gas vs. Electric: Which One is Right for You?
Gas Tankless Water Heaters
✔ Best for large households with high hot water demand.
✔ Works efficiently even in cold climates.
✔ Higher upfront cost but cheaper long-term energy costs (for homes with gas access).
❌ Requires venting for gas exhaust.
❌ Professional installation is a must.
Electric Tankless Water Heaters
✔ Ideal for small homes, apartments, or warmer climates.
✔ Lower upfront cost and easier installation.
✔ More energy-efficient than gas models.
❌ Not ideal for large households due to lower flow rates.
❌ Higher electricity costs in some areas.
👉 Key Takeaway: If you have a large household and access to natural gas, a gas-powered heater is a better option. If you want a budget-friendly, eco-friendly, and easy-to-install option, go for electric.
3. Factors to Consider Before Buying
1. Flow Rate (Gallons Per Minute – GPM)
Tankless heaters are rated by their flow rate, which determines how much hot water they can provide at once.
- 1-2 people: 3-5 GPM
- 3-4 people: 6-8 GPM
- 5+ people: 9+ GPM
2. Temperature Rise
If you live in colder regions, your incoming water temperature will be lower, meaning your heater needs to work harder. Choose a unit with a higher BTU rating for efficient heating in such areas.
3. Energy Efficiency & Certifications
Look for Energy Star certified models that offer high thermal efficiency (above 80% for gas and 98% for electric units).
4. Installation & Maintenance
- Gas heaters require venting and professional installation.
- Electric units are easier to install but may require electrical upgrades.
- Regular descaling and flushing can extend the unit’s lifespan.
4. Top-Rated Tankless Water Heaters in the USA (2025)
Here are the best models based on performance, reliability, and user reviews:
Rank | Model | Type | Flow Rate (GPM) | Energy Factor | Best For |
---|---|---|---|---|---|
1 | Rinnai RU199iN | Gas | 11 GPM | 0.96 | Large homes, high demand |
2 | Stiebel Eltron Tempra 24 Plus | Electric | 5 GPM | 0.99 | Small homes, eco-friendly |
3 | EcoSmart ECO 27 | Electric | 6.5 GPM | 0.98 | Budget-friendly, apartments |
4 | Rheem RTGH-95DVLN | Gas | 9.5 GPM | 0.96 | Cold climate, high efficiency |
5 | Takagi T-H3-DV-N | Gas | 10 GPM | 0.95 | Commercial & residential |
📌 Pro Tip: Choose a model based on your household size, climate, and hot water demand.
5. Installation Guide & Cost Breakdown
Installation Costs
Type | DIY Cost | Professional Installation |
Electric | $500 – $800 | $1,000 – $2,000 |
Gas | $1,000 – $2,500 | $2,000 – $4,000 |
DIY vs. Professional Installation
- Electric heaters can be DIY-installed if you have basic electrical knowledge.
- Gas heaters must be installed by a professional due to venting and gas line work.
6. Common Mistakes to Avoid
🚫 Undersizing your unit – Ensure you get a unit with the correct GPM for your home.
🚫 Ignoring maintenance – Descale every 6-12 months to prevent buildup.
🚫 Skipping professional installation – Especially for gas models, improper setup can be dangerous.
7. FAQs About Tankless Water Heaters
Q: Can a tankless water heater run out of hot water?
A: No, as long as it meets your flow rate needs, you get endless hot water.
Q: How long do tankless water heaters last?
A: 20+ years, nearly double the lifespan of traditional water heaters.
Q: Is a gas or electric tankless heater better?
A: Gas is better for large homes; electric is ideal for small households & apartments.
Q: Do tankless water heaters save money?
A: Yes! They reduce energy bills by up to 30% compared to tank models.
Final Thoughts: Is a Tankless Water Heater Right for You?
If you want energy efficiency, endless hot water, and a long-lasting solution, a tankless water heater is a great investment. Choose based on your home size, climate, and budget to get the best model for your needs.