How to Choose the Best Tankless Water Heater

Finding the best water heater can be difficult. There are many types and models to choose from. And the wrong decision can have disastrous consequences! But if you keep reading, Heaters Review will guide you through 4 simple steps to guarantee you find the perfect device for you and your family. The best tankless water heater won’t just work. It should also be safe, easy, and comfortable for you to use on a daily basis.

tankless-water-heater-checklistOf course, your individual circumstances are very important here. They include:

  1. How big is your family? How cold is your climate? The climate determines source water temperature, from which your tankless water heater has to ‘raise’ the water from. Heaters provide superior performance and efficiency in moderate and warmer climates, but performance suffers the colder it gets.
  2. The current price of NG, LPG, and electricity in your area. Defines which options become more attractive.
  3. The gas line size and length (for a gas tankless water heater). Gas line characteristics can affect the performance. In some cases, the gas piping upgrade is needed.
  4. Your current main electrical panel’s amperage (for electric heaters).

And that’s a lot to think about! But if you work through these 4 steps it’s actually pretty straightforward:

  1. Make sure that tankless heater is cost effective in your circumstances.
  2. Choose heater type – gas/electric.
  3. Determine the heater parameters and right size appliance.
  4. Choose the manufacturer and model.

Tankless Heater Advantages

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Tankless units have no storage tank losses.

Tankless water heaters don’t heat water unless you’re using it from a faucet or appliance. Even with longer showers, they still save money because is if you are gone on the weekend, they are not keeping a lot of water hot for no one to use.

Both electric and gas tank heaters have standby losses, but gas water heaters with the same capacity have more loss because of large surface area, exhaust flue pipe, and the pilot light standby losses. Energy Factor (the measure of an energy efficiency) for electric tank water heaters is typically around 0.9, and for gas tank water heaters it’s around 0.6. For gas heaters, going to tankless can reduce the standby losses and get up Energy Factor to about 0.85.

A local tankless water heater provides nearly instant hot water. Much of the efficiency gains are due to the lack of piping losses, not just storage tank losses.

Ideally, we want to have a warm water just after hot water faucet turn. But water flow goes through the supply pipe and it takes seconds to get hot water. Furthermore, the water in the piping cools down. Sometimes slow, sometimes fast, but it does. So you lose all the hot water energy stored in it. And you waste cold water that comes out of the faucet before you get hot water. When filling a sink machine or bathtub it saves fresh water, but that heat was lost for good and you must compensate with more gallons of ‘hot’ water to get to the same temperature.

Tankless units are compact.

Compact tankless heaters are perfect solutions for garage apartments, commercial tenant improvements, smaller homes,  in-law suites, etc. You can set the unit almost everywhere you want.

Endless hot water.

For bigger families, even a 60gal will run out. Tankless units never run out of hot water, and no big water tank to worry with.


Tankless water heaters have had a bad reputation from the older units that came out 10 or 15 years ago. But they greatly improved in that time. Many units have warranty and replacement on tankless up to 20 years (about 5-10 for a tank). Maintenence is very minimal and the manufacturers service usually great. There is never any worry of them having to change the anodes or leaking.

Tankless hot water heats, I will never go back to a HWH with a tank ever. I made the switch oveer to an electric tankless HWH in 2011. Now the unit I bought was not a Bosch, but was around $900, then it cost $3000 for the electric service upgrade to bring commercial power into the house, all told a $4K investment, but immediately I saw a $60 a month drop in the electric bill. I have electric bills that average $100 a month year round, did I mention that I have a 100% electric home with an electric heat pump? Yes I do. The conventional electric HWH sucks up some juice 24/7. Plus we have all the hot water we need, we never have to wait for the tank to heat up. Every new home should have a tankless HWH.

Tankless Hot Water Heater cons

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Sometimes you need to upgrade the supply lines.

While tankless units need to run only when hot water is needed, their gas/electricity usage must ramp up quickly when they’re meeting high hot water demands.

Gas line sizing is important to ensure your unit always runs at optimal efficiency. When winter comes, maybe there’s not enough gas supply for the whole system. Rinnai often recommends just install the larger three-quarter-inch lines. Retrofitting later to a larger gas line could cost several hundred dollars.

Electric tank heaters work at about 2-5kW for and keep going until the tank is hot again. Tankless hot water heaters are usually 5 to 18 kW, it is 20-80A at 240V and 80-160A at 115V. Average household’s main panel capacity is 200 amps. 4-5kW heater usually works fine, but 18kW tankless will need an electrical system upgrade to accommodate the larger load demand. It could cost you up to $1,500.

You should estimate needed hot water flow

If you have a high flow rate then you will get a cooler temp at the shower head. If you have low power tankless unit and multiple people in the house you will notice the temp change.

Think about energy effectiveness carefully

If you have complex piping, you will have increased standby pipe losses. Smaller units for 1-2 bathrooms are more efficient than the larger ones that are sized for larger houses.

Temperature set up matters. There were examples when the people used tankless with setting at 140 degrees and turning the dial back to 120 degrees has reduced gas consumption twice.

Recirculation pumps save water but increase piping losses significantly by keeping all the time the hot water in the pipes.  It can cost up to $50 per month extra on your heating bill.

Pay attention, the federal tax rebate of $300 for tankless water heaters have been expired at the end of 2016.


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The initial cost of a tankless is greater than that of a conventional water heater, but tankless will last longer and have lower energy costs. Hard to say if they’ll last 20 years, but most warranties are for 12-15 years on the heat exchanger. For tank heaters, it’s 6-12 on the tank. If you use 40 gallons or less of hot water daily, you can save 25%–30%. You can achieve even 27%–50% energy savings if you install a tankless heater at each hot water outlet.

I use a brultech power monitor, so I can see exactly how much power my water heater (as well as other appliances) are using over time. When I replaced my standard storage water heater with the tankless my water heater energy consumption went down by a full 33%.

If you are not going to live in the house more than 5 years, there is no sense to change a water heater. Usually, it would take about 5-10 years recoup the investment. In addition, with tankless you get more comfort and less problems with hot water supply.

Advantages and Disadvantages of Gas and Electric Tankless Water Heaters

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Estimate the cost of gas and electric energy for your area

Energy required to heat 1000 gallons of water if the incoming temperature is 60°F and we want to raise it to 140°F. Heating a gallon of water requires 8.33 x 80 = 667 Btu’s (100% efficiency)

Gas heating cost
– For 80% efficient. It takes 667 / 0.8 = 834
– 834 Btu’s is 0.00834 therms.
– It will take 0.00834 therms to heat a gallon of water, or 0.00834 x 1000 = 8.34 therms to heat 1000 gallons.
– At $1.20/therm, it costs 8.34 x $1.20 = $10 (calculate with your price) to heat 1000 gallons.
One thousand cubic feet (Mcf) of natural gas equals 10.37 therms (8.34 therms= 0.8Mcf), so
– At $12.5/Mcf, it costs 0.8 x $12.5 = $10 (calculate with your price) to heat 1000 gallons.

Electricity heating cost
– A typical electric water heater has 92.7% average efficiency.
– It takes 667 / 0.927 = 720 Btu’s to heat a gallon of water using electricity.
– One kWh is 3413 Btu’s. One Btu is 0.000293 kWh.
– 667 Btu’s x 0.000293 kWh/Btu = 0.195 kWh
– It will take 195 kWh to heat 1000 gallons
– At $0.11/kWh, it costs 195 x $0.11 = $21.45 (calculate here with your price) to heat 1000 gallons of water

So with my prices, gas heating is more than twice cheaper. You should also take into account unit prices and costs for line upgrades (if necessary) – about $1500 for electric line upgrade and about $700 – upgrade to 3/4″ gas line.

Heaters characteristics explained by Tankless Water Heater Reviews

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Required water flow

For common hot water is typically required at a temperature of 120°F . If the incoming supply water temperature is about 50°F, and the tankless water heater needs to raise the temperature by about 70°F. You need to have a properly sized heater for meeting the hot water demand. The demand is determined by adding up all the simultaneously hot water uses.

If the total demand the heater’s maximum flow capacity, the0 water temperature will be less than desired, so the water temperature depends on the water flow, heater’s power, the incoming water temperature.

Line upgrading expenses

In most cases, installing tankless units will require an upgrading of the existing gas or electric service. It is difficult to specify total cost of the upgrade. However, it would be realistic to estimate the cost in the range of $300 to $850.

Gas tankless water heaters characteristics

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Today you can choose among 3 basic types of tankless hot water heaters:

1: Condensing units with 95% efficiency can vent with ordinary PVC pipe. Cost about $1,000, require condensate drain and 3/4″ gas line.

2: Units that automatically modulate the burner output based on water flow and temperature settings. Price is about $550 but they require expensive stainless steel venting or must be mounted outdoors. Modulating gas tankless water heaters usually require 3/4″ gas lines and have up to 82% efficiency

3: Non-modulating with electric igniter can be bought for under $250, and use 1/2″ gas lines. Most will require a venting upgrade to 4″ B-vent. Efficiency is in a range 55-85%.

Accompanying expenses

Most companies require an anti-scale filter or water softener on the inlet side of the heater to keep the warranty. Tankless water heaters are required to be cleaned and flushed annually. It is easy to do, you need a pump, a couple of hoses, and citric acid cleaner.

You could install multiple small tankless, it will decrease losses, but that would increase the cost of gas lines and venting. Venting is the biggest expense. Noritz makes condensing models, that use PVC venting, Rinnai is starting to offer them as well. Condensing water heaters are the most efficient and pricey, but decrease the venting price sometimes may compensate it.

Electric tankless water heater characteristics

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As more of the utilities move off of coal to NG, or if they complete LNG export facilities – we can expect the price of natural gas to increase.  And the electric water heater options may become more attractive. Midwest energy recommends electric heaters unless clients have 5-6 occupants. Electric energy gets cleaner with time. And in future consumers can effectively produce electric energy themselves. Plain electric heaters solve a lot of problems, remove combustion appliance, and leave money free for better effect elsewhere. Furthermore, you can install compact electric tankless unit just near each hot faucet in a home, office buildings, garages, etc. In that case, the tankless uses less than half the electricity of the tank one, so there are significant savings.

Electrical tankless water heater is your choice if such circumstances (or several of them) are true for you:

  1. Gas prices in your area are relatively high.
  2. You’re low on space
  3. You can’t reach gas lines or provide proper ventilation.
  4. Your home has sufficient electrical capacity (about 200-300A household electric service), or that you have taken note of any upgrades that may be required.

Tankless electric units are small, quick and durable. The con is that they need thick wires with a dedicated breaker.

Choose the manufacturer and model


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In the “traditional” tankless market there are two top players: Noritz and Rinnai. They together hold about 70% of the worldwide market share. I believe, Noritz is the leader. It is oldest (since the 50’s) in the world manufacturer of tankless heaters. Noritz have a broader line in the US, better support and the finest quality of parts.


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Rinnai makes water heaters since 1964 and today, there are about 30 million Rinnai Tankless units worldwide. Most my friends, industrial and commercial sites note Rinnai units longevity and performance. Rinnai heaters have short wait times owing to a very low flow request for hot water. Cheaper units will not turn on as the “request” is below its threshold.

If you change a storage-tank heater to a tankless, you will have to install stainless-steel venting. For a Rinnai, you will need expensive Rinnai concentric venting.


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Rheem are the largest manufacturer of water heating products in North America and makes tankless heaters brands Rheem/GE/Rudd/Richmond – all made by the same company. Rheem tankless units are very common in Europe and Japan. The heaters work fine and the company has good technical backing for their resellers.

A warranty is in place if purchased online and Rheem allows homeowners to install heaters on properties that they own. Sometimes the tech support requires photo sent to see how it was installed.


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The Navien has an option for an additional internal tank (about 2 gallons). It helps to prevent “cold-water sandwich”.

The term “cold water sandwich effect” is a term that is used to describe the introduction of cold water into the hot water supply line during frequent on/off operation of an instantaneous water heater. The cold water sandwich effect, when present, appears as a momentary drop in hot water temperature as it is discharged from a hot water supply outlet (i.e. shower, tub, or faucet). This phenomenon is present in the operation of all instantaneous, tankless style, water heaters, but is minimized with the high tech design of Rinnai water heaters.

“cold-water sandwich”