Tankless Water Heaters: The Comprehensive Guide to Upgrading Your Home's Hot Water System

Rinnai RUR199 tankless water heaterRinnai RUR199 tankless water heater
(photo: amazon.com)

Are you tired of running out of hot water in the middle of a shower or waiting for the water to heat up?

If so, it might be time to upgrade to a tankless water heater. With their energy-efficient design, space-saving size, and endless supply of hot water, tankless water heaters have become an increasingly popular option for homeowners.

In this comprehensive guide, we'll explore the pros and cons of tankless water heaters, compare them to traditional tanks, provide tips on sizing and installation, and share our top picks and reviews to help you find the best model for your home.

There is a lot to learn about tankless water heaters, so if you're interested in exploring the best models and reading reviews, you're in the right place.

There is a lot to read about tankless... so if you would like to know about the best models and check the reviews - read this article. If you're looking to purchase top models, you can check out Rinnai, Takagi, Noritz, Rheem, Stiebel Eltron, Eemax, or other leading brands.

Tankless water heaters: Things to consider

Top reasons to buy a tankless

The main advantages of tankless water heaters are their tank-less design, providing hot water on-demand with a continuous flow and an endless supply. Tankless models are known for their energy efficiency, using up to 50% less energy than tank-type heaters, as well as their small and compact design, replaceable parts, and condensing technology.

One excellent example of a high-quality tankless water heater is this Rinnai model. It boasts superior efficiency, high performance, energy and emission reduction, and, most importantly, savings.

Compared to storage tanks, tankless technology is much more efficient. Traditional tanks heat water even if there is no demand, while tankless appliances work only when the hot water tap is open or on-demand.

Tankless water heaters can use either gas or electricity. The favorite type among homeowners is the gas-powered model with electronic ignition, but models with a continuously burning pilot light also exist, each with its pros and cons.

The size of the unit needed depends on the demand, house size, and family size, so be sure to check out the sizing guide. Some manufacturers offer multi-system setups that can link several units into one system to satisfy the high demand of large homes.

Most tankless water heaters are designed for whole-house use, providing a higher GPM flow rate for high hot water demand and multiple applications at once.

Some manufacturers even offer models for combined water and space heating, known as combi boilers, such as the Navien. These models provide even more options and savings for homeowners.

What are the available tankless options?

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

Electric tankless heaters use electric heating elements to heat the water, while gas-powered models use a gas burner to heat the water.

Within these two categories, there are also different subtypes, such as point-of-use tankless heaters, which are installed close to a single point of use, and whole-house tankless heaters, which are designed to provide hot water to an entire home.

There are also some tankless water heaters that can be used for both water and space heating, known as combi boilers.

Electric-powered tankless water heaters

Titan electric tankless water heaterTitan electric

Electric tankless hot water heaters have a compact and small design, allowing the wall mount and under the sink installation, saving you lots of space. They have a long service life as they are less prone to hard water and sediment deposits. There are two types to buy; point-of-use and whole-house.

Compared to the gas type, electric tankless water heaters do not require venting and do not produce greenhouse gases.

Top 3 selling brands on Amazon.com are:

  • EcoSmart ECO 27
  • Stiebel Eltron Tempra 24
  • Rheem RTE 13

Gas-powered tankless water heaters

Bosch gas tankless water heater - Therm seriesBosch gas

Gas tankless water heaters are not only energy-efficient but also environmentally friendly. They use advanced technology and meet strict emission standards, and can use natural gas or propane.

Compared to electric tankless heaters, gas models produce higher flow rates.

Tankless water heaters can be categorized into two types, those that only work as on/off (older models) and those that have modulation (utilizing a modulating gas valve).

Modulation heaters have heat output depending on water flow, which means that when the demand for hot water is higher, the modulating gas valve provides more gas resulting in more power.

The best gas tankless models utilize condensing technology, such as the Rinnai RUC98, which uses the "hidden" gas flue energy for preheating and superior efficiency with an ultra-high energy factor of 0.96 and low NOx emissions.

Top 3 selling brands on Amazon.com are:

  • Takagi T-KJr2
  • Rinnai RL75iN
  • Rheem RTGH-95DVLN

How electric tankless water heater works

electric tankless water heater - how it worksElectric tankless water heater
(photo: ecosmart)

An electric tankless water heater works by using electric heating elements to heat the water as it flows through the unit. When you turn on the hot water tap, cold water enters the heater and passes over the heating elements, which heat the water to the desired temperature. As a result, you get a constant supply of hot water without the need for a storage tank.

The heating elements are powered by electricity, and they are controlled by a flow sensor that detects when you turn on the hot water tap. Once the sensor detects water flow, it signals the heating elements to turn on and start heating the water.

As the water flows through the unit, it heats up quickly, and by the time it reaches the outlet, it is at the desired temperature. Because the water is heated on demand, you don't have to worry about running out of hot water, and you can enjoy a continuous supply of hot water for as long as you need it.

One important feature of electric tankless water heaters is modulation, which refers to the ability of the unit to adjust the power output based on the demand for hot water. With modulation, the heating elements can adjust their output up or down depending on the amount of water flowing through the unit. This helps to ensure that the water is heated to the desired temperature without using more energy than necessary.

In addition to modulation, electric tankless water heaters often come with a control panel that allows you to adjust the temperature and other settings. The control panel may also include a digital display that shows the current water temperature and other important information. Some models may even come with a remote control that lets you adjust the temperature from another room.

How gas tankless water heater works

How tankless worksHow gas tankless works
(photo: Takagi)

Modern gas-powered tankless water heaters use advanced technology to regulate and control output temperature, flow, safety, and other parameters via an electronic circuit board or control board. Some good examples of these models are Rinnai, Noritz, Takagi, or Paloma.

When the hot water tap is opened, a flow sensor inside the tankless water heater sends a signal to the electronic module. The signal then activates the gas valve, allowing natural gas or propane to flow into the burner located inside the combustion chamber. The gas is ignited either by a pilot flame (in older models) or spark from an electrode.

Burning gas heats the heat exchanger, where the incoming cold water is quickly heated to the desired temperature that has been pre-set. The heat exchanger transfers the heat from the burner to the water instantaneously, providing an endless supply of hot water.

Once the hot water demand has been met, the flow sensor in the unit detects that water is no longer flowing and sends a signal to the control board. The control board then shuts off the gas valve and the burner, stopping the heating process. If the hot water tap is turned off before the hot water demand is met, the flow sensor will also detect this and shut off the burner.

Because gas-powered tankless water heaters produce exhaust gases when the burner is on, they must be vented to the outside of the home. This is typically done using a dedicated vent pipe that is connected to the unit and runs through the roof or exterior wall of the home. The type of venting required depends the specific model of tankless water heater and the local building codes.

Some gas-powered tankless water heaters are "condensing" units, which means that they are designed to extract heat from the exhaust gases that are created when the burner heats the water. This is done by passing the exhaust gases through a secondary heat exchanger before they are vented out of the unit. By extracting heat from the exhaust gases, condensing tankless water heaters are able to achieve even greater energy efficiency than non-condensing models.

Gas-powered tankless water heaters often use a "modulating" gas valve, which allows the unit to adjust the gas flow rate to match the hot water demand. This means that the burner will only use as much gas as needed to heat the water, reducing energy waste and increasing efficiency. The modulating gas valve helps to maintain a consistent output temperature, even when the hot water demand fluctuates. This feature is particularly useful during periods of peak usage, when multiple appliances or fixtures may be using hot water at the same time. By adjusting the gas flow rate, the tankless water heater can provide a steady supply of hot water without any temperature fluctuations.

Video: Tankless basics

Tankless water heater manufacturers

Here is a list of popular residential tankless hot water heaters in the US and Canada. Many gas-type units are Energy Star qualified, and while some brands are affordable, others with more advanced features can be expensive.

Popular brands of gas-type heaters

Popular brands of electric tankless water heaters

Tankless advantages and benefits

Tankless water heaters offer numerous advantages and benefits over traditional tank-style heaters. Here are some key advantages in more detail:

  • Endless hot water supply: Unlike traditional heaters, tankless water heaters provide a continuous supply of hot water, ensuring that you never run out of hot water.
  • Durability: They are built to last, with a lifespan of 20 years or more for some models.
  • Energy and cost savings: By heating water on demand, tankless heaters can save you up to 50% on energy and heating costs compared to traditional heaters. Additionally, high-efficiency models are available that are marked as Energy Star, ensuring that you save money and energy.
  • Flexible installation options: They can be installed anywhere, inside or outside the house, providing flexible installation options for homeowners.
  • Lower greenhouse gas emissions: Tankless produce lower greenhouse gas emissions compared to traditional heaters, making them a more environmentally friendly option.
  • Reliability: With the reliability rating of 99% they are highly dependable and unlikely to break down. 
  • Safety: These models are designed with safety in mind, and there is no risk of scalding injuries.
  • Clean and fresh hot water: Tankless heating systems provide clean and fresh hot water, as there is no buildup of sediment or rust inside the unit.
  • No leaking problems: Since there is no tank, there is no risk of leaking problems that can occur with traditional heaters.
  • Smart technology: Some models use smart technology with self-diagnostic programs for troubleshooting and repairs, as well as precise temperature control for enhanced safety and comfort.
  • Government incentives: Homeowners with advanced and high-efficiency tankless models are eligible for government tax credits, rebates, and other incentives.
  • Powered by natural gas or propane: They are powered by natural gas or propane (LP), providing flexibility in fuel options.
  • Replaceable parts: All parts are replaceable, making maintenance and repairs easier and more affordable.
  • Small size: Compact size saves space compared to traditional tank-style heaters.


  • Tankless systems can have high upfront costs, up to three times more than tank-type heaters.
  • Upgrades like venting or gas lines can be expensive.
  • Inconsistent water temperature or "cold-water sandwich" can occur with economy-type units, as the hot water output is split among all household fixtures.
  • Venting gas and propane units require costly stainless steel tubing, and some brands may use other materials.
  • Electric instant water heaters may require an additional circuit and use a lot of energy.
  • Gas water heaters require annual servicing, which adds additional expenses.
  • Instant water heaters require a minimum flow rate to activate the heat exchanger.
  • Tankless water heaters rely on the pressure delivered to the home, making a good plumbing system necessary.


In conclusion, tankless water heaters are an excellent alternative to traditional tank-style heaters due to their energy efficiency, long lifespan, and continuous supply of hot water.

Homeowners who are looking to save money on their energy bills, reduce their environmental impact, and enjoy a reliable source of hot water should consider investing in a tankless water heater.

Although they may require a higher initial investment, the long-term savings and benefits make it a worthwhile investment for homeowners.


Do tankless water heaters need to be flushed?

Yes, tankless water heaters need to be flushed regularly to remove mineral buildup and sediment that can accumulate inside the unit. Flushing involves running a solution of vinegar or another descaling agent through the unit to dissolve buildup. It's recommended to flush at least once a year to maintain optimal performance and extend the unit's lifespan.

Can tankless water heaters explode?

Tankless water heaters are unlikely to explode since they do not store hot water under pressure like traditional tank-style heaters. However, improper installation or maintenance could cause malfunctions or safety hazards. Regular maintenance and inspections by licensed professionals, along with familiarity with the manufacturer's recommended safety precautions, can help ensure safe operation.

What are the possible installation locations for tankless water heaters?

Tankless water heaters can be installed in various locations in a home, depending on the unit's size, power source, and plumbing requirements. Popular locations include utility rooms, garages, and basements, while smaller units can be installed in closets or under sinks for point-of-use applications. It's important to ensure proper clearance, ventilation, and access for maintenance and repair, follow local building codes, and have the unit installed by a licensed professional for safe and efficient operation.

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