Tankless Water Heater Buying Guide

How to buy the best whole-house tankless water heater, including selecting the right size, choosing between gas and electric on-demand water heaters, and more.

A whole-house tankless water heater can reduce your water-heating bill by 5 percent to 50 percent or more. As mentioned in How a Tankless Water Heater Works, a whole-house tankless water heater heats water moving through the system instead of heating (and keeping hot) a large tank filled with water the way a storage water heater does.

whole house tankless water heaterRinnai

A whole-house tankless water heater never runs out of hot water.

Water Heater Flow

With a tankless water heater, the supply of hot water can be endless. You don’t empty the water heater with a tall bath because there isn’t a tank to empty. With this type of water heater, the issue isn’t capacity, it’s flow.

A tankless water heater won’t “run out” of hot water unless the flow surpasses the water heater’s ability to heat it.

Think of it this way: If two showers and the washing machine are all running at the same time, a tankless water heater won’t be able to keep up with the flow. It simply cannot heat the large volume of water that is passing so quickly through it. So, it will deliver lukewarm water. Then again, if you buy a unit that puts out a lot of heat and you stagger showers and washing machine usage by a couple of minutes, you won’t have a problem.

You can fill an oversized bathtub when you have this type of water heater but not when another appliance or fixture is using hot water—and, if the tub has a supply designed to deliver a very high flow rate, you may have to slow down the water a little. (If you have a tankless water heater and you’re in the market for a new dishwasher, consider a dishwasher that heats its own water.) Aside from staggering usage, the key is to size a tankless water heater properly for your needs.

HA2016 Water-Heaters---Install

Tankless Water Heater Types

You can buy gas tankless water heaters or electric tankless water heaters. Gas is much faster and more efficient at heating water. Because of the heat output and response time required, most whole-house tankless water heaters have burners that are gas-fired (including propane or kerosene).

Gas-fired tankless water heaters require venting—in fact, their flues generally must be larger than those required for gas storage water heaters. Some “low-nox” tankless water heaters have power vents that allow you to exhaust gases out a side wall; these are ideal for situations where running a new vent out the roof would be impractical if not impossible. Rinnai, Bosch, and other companies also make “outdoor” tankless water heaters that can be installed outside the home and therefore do not require venting (these may not be practical in extremely cold climates).

tankless water heaterBosch

Bosch natural gas whole house tankless water heater delivers 80% efficiency.

Some gas models have pilot lights; others have electronic ignition that may require electrical hookup. One Bosch gas tankless water heater utilizes “hydro ignition,” a tiny water-powered turbine that sparks the burner. Models that don’t require a pilot light are more expensive but also more energy efficient than pilot-light models.

If you need to fit the unit into a tight space, such as an attic, look for a “sealed combustion” compact tankless water heater. Rinnai tankless water heaters utilize a cool-to-the-touch vent system for just such situations.

Tankless Water Heater Warranties

Be sure to check out the product’s warranty. Unlike conventional water heaters with tanks that deteriorate after years of storing mineral-laden water, tankless water heaters offer long-term reliability. The critical component is the heat exchanger. Warranties on this part run from five to twelve years.  You can shop for tankless water heaters online at Amazon.com.

Sizing a Tankless Water Heater


A tankless water heater will provide an endless stream of hot water.

When sizing a tankless water heater, you need to think in terms of flow, not capacity. A tankless water heater doesn’t run out of hot water like a storage water heater can, but it may not be able to heat water fast enough to serve multiple fixtures at once.

A tankless water heater is given BTU (British Thermal Unit) input and efficiency ratings. These determine its flow rate, expressed in gallons per minute (GPM).

One BTU is equal to the amount of energy required to raise the temperature of 1 pound of water 1 degree F. The higher a water heater’s BTU rating, the higher the flow rate. Under normal circumstances, it takes about 31,000 BTUs to deliver 1.2 GPM; 190,000 BTUs deliver 5.7 GPM.

Flow rates vary from about 1.2 to 6 GPM. Point-of-use models, such as those that provide hot water to a single bathroom sink, are rated 1.2 GPM. A 2.6-GPM tankless water heater will handle one shower at a time, a 4-GPM tankless water heater one shower and one sink, and a 6-GPM two showers.

Homeowners who are concerned about energy savings also need to pay attention to a unit’s efficiency ratings. These ratings, which range from about 78 percent to 87 percent, indicate how much of the fuel is converted to heat by the appliance—the higher the better. You can shop for tankless water heaters online at Amazon.com.

Join the Conversation

  • Don Vandervort, HomeTips

    Doesn’t sound like the right solution. Tankless water heaters cannot serve several showers and water-using appliances simultaneously. You might want to investigate a recirculating pump or, for the sinks, on-demand water heaters located beneath the fixtures.

  • Great info. I had to replace my water heater a few months back and didn’t know enough about tankless ones to go that route. Next time I’ll know better what I’m up against.

  • Charles

    Nice informative post. Thanks.

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