Tankless Water Heater Buying Guide
Tankless water heaters deliver hot water on demand while using less energy than traditional tank models. They take up minimal space and can lower your utility bills over time. This guide covers what you need to know about tankless systems and how to choose the right one for your home.
What is a Tankless Water Heater?
A tankless water heater heats water only when you need it, rather than storing heated water in a tank. These units can provide hot water for your entire home or serve a single fixture like a shower, sink, or appliance. Their compact size allows installation in tight spaces—closets, utility rooms, or even mounted on an exterior wall.
Selecting a Power Source
Tankless water heaters deliver hot water on demand without the need to store and repeatedly reheat the same water, which cuts energy costs. They're available in natural gas, propane, and electric models, so you can match the unit to your home's existing energy source and your preferences.
Deciding on Condensing or Non-Condensing: What’s the Difference?
Gas tankless water heaters come in two types: condensing and non-condensing.
- Condensing models use a dual heat exchanger to capture and reuse exhaust heat, making them more energy-efficient.
- Non-condensing models have a single heat exchanger. They're simpler in design but less efficient because heat escapes through the exhaust.
If energy efficiency is a priority and your budget allows for the higher upfront cost, condensing models may offer better long-term savings on utility bills.
How Does a Tankless Water Heater Work?
When you turn on a hot water tap or start an appliance like a dishwasher, the tankless water heater detects the water flow and begins heating. The unit measures the incoming water temperature and adjusts the burners or heating elements to reach your set temperature. When you stop using hot water, the unit shuts off and stops consuming energy until the next time you need it. Because there's no storage tank, you're not limited to a pre-heated supply of hot water.
Benefits of a Tankless Water Heater
Tankless water heaters heat water on demand without the limitations of a storage tank. Whether you're washing dishes, doing laundry, or filling a bathtub, the system supplies hot water as you need it.
Key benefits include:
- Lower Energy Bills: Tankless water heaters can save up to 40% on energy costs compared to standard gas tank models because they only heat water when you're using it.
- Longer Lifespan: With proper maintenance, tankless units can last up to 15-20 years, often twice as long as traditional tank water heaters. This longer life means fewer repairs and replacements over time. Purchasing an American gas tankless unit with X3® Scale Prevention Technology will give you virtually zero lifetime descaling maintenance and three times longer product life.
- Space Savings: Traditional tank water heaters can take up to 16 square feet of floor space. Tankless units are compact, about the size of a carry-on suitcase, and mount on walls inside or outside your home, freeing up space.
Choosing the Right Tankless Water Heater
Picking the right tankless water heater starts with proper sizing. A unit that's too small won't keep up with your household's hot water needs during busy times, while an oversized model costs more than necessary.
The goal is to find a unit that handles your peak demand without running short. Think about your busiest hot water time. Maybe it's morning when someone's showering, the dishwasher is running, and the washing machine is going. Your tankless water heater needs to keep up with all of that at once. Two key numbers help you size correctly: flow rate and temperature rise.
Flow rate tells you how much water passes through your fixtures and appliances, measured in gallons per minute (GPM). Temperature rise is how many degrees your water heater needs to raise the incoming water temperature to reach your target hot water temperature. Understanding both helps you pick the right size unit for your home.
Calculating Your Flow Rate
Start by listing every fixture or appliance you might run at the same time during your busiest hour. Common scenarios include showering while running the dishwasher and doing laundry. Add up the GPM for each item to get your total flow rate.
You can find flow rates in the manufacturer's manual or stamped on the fixture itself. If you can't find it, measure it yourself: time how many seconds it takes to fill a 1-gallon bucket, then divide 60 by that number.
Average GPM Usage for Common Appliances and Fixtures:
For example, running a shower, kitchen sink, and high-efficiency washing machine at the same time requires about 6.0 GPM total.
Understanding Temperature Rise
Your incoming water temperature depends on where you live. Groundwater ranges from the mid-30s in northern climates to the upper 70s in southern regions. North America breaks down into three zones:
- Northern Zone: 37°F to 51°F
- Central Zone: 52°F to 61°F
- Southern Zone: 62°F to 77°F
Most homes set their hot water between 110°F and 120°F. To find your temperature rise, subtract your incoming water temperature from your desired hot water temperature. If your groundwater comes in at 57°F and you want 120°F water, you need a 63-degree temperature rise.
Budget Considerations
Tankless water heaters cost more upfront than traditional tank models. Tank water heaters typically run $500 to $2,000, while tankless units start around $1,000 and go up from there. However, tankless models can save money over time through lower energy bills and reduced maintenance needs.
Installation costs vary based on your home's current setup. If your plumbing and electrical systems can already support a tankless unit, installation is simpler. Homes that need upgrades to gas lines, electrical service, or venting will cost more. Expect installation to run anywhere from $900 to $3,000.
Types of Tankless Water Heaters
Tankless water heaters come in two main types: point of use units that serve a single fixture or area, and whole home systems that supply hot water throughout your house.
Point of Use Water Heaters
Point of use tankless water heaters are compact units installed near a specific fixture or appliance. They work well when one area needs a hot water boost or when running new lines from a central heater isn't practical.
Common uses include supplying a bathroom sink far from the main water heater, a basement addition, or a kitchen in a home expansion. These small units fit in cabinets or tight spaces. They're available in both electric and gas versions.
Whole Home Tankless Water Heaters
Whole home tankless water heaters supply hot water to your entire house from a single unit. Gas models range from 140,000 to 199,000 BTU. Electric units run on 240 volts and range from 14 to 32 kilowatts. Higher ratings mean more hot water capacity.
The right size depends on your household's peak hot water demand and how many fixtures you typically run at once.
How to Install a Tankless Water Heater
Installing a tankless water heater involves several steps. First, pick a location near water lines and your power source (electrical or gas connection). Shut off the water and power, then disconnect your old water heater. Follow the manufacturer's instructions to prep the new unit and install any necessary water lines. Check all fittings carefully to avoid leaks before connecting the power.
Next, install the required ventilation and mount the unit. Connect the water lines, then turn the water and power back on. Test the unit to confirm it's working and adjust the temperature settings as needed.
While DIY installation is possible if you have professional plumbing and electrical experience, tankless water heaters involve gas lines, venting systems, and electrical work that require specialized knowledge. Mistakes can lead to leaks, code violations, or safety hazards. For most homeowners, a professional installation is the smarter choice.
Find a local certified installer near you to ensure your tankless water heater is installed correctly, safely, and up to code.
Maintaining the Tankless Water Heater You Choose
Tankless water heaters need basic annual maintenance to keep running efficiently and safely. Here are the key tasks:
- Clean the Inlet Filter: Tankless units have inlet filters that catch debris before it enters the system. Clean these filters regularly to prevent clogs and maintain steady water flow.
- Check Water Pressure: Monitor water pressure to make sure it stays within the range listed in your manufacturer's guidelines.
- Inspect Ventilation (Gas Models): If you have a gas or propane tankless water heater, check the ventilation system once a year. Look for blockages, loose connections, damage, or corrosion.
Descale When Needed: Mineral buildup can form in the heat exchanger over time, especially if you have hard water or don't have American's X3® Scale Prevention Technology integrated within your tankless unit. If you notice a reduced flow rate, it's time to descale the unit.
Keeping up with regular maintenance helps your tankless water heater run smoothly for years. If you'd rather have a professional handle it, a local plumber can take care of the annual checkup.
Still Have Questions?
Tankless water heaters cost more upfront than traditional tank models, but the long-term savings can make up for it. Lower energy bills and a lifespan of up to 15-20 years with proper maintenance help offset the initial investment. Purchasing an American gas tankless water heater with X3® Scale Prevention Technology will give you virtually zero lifetime descaling maintenance and three times longer product life.
The right size depends on your peak hot water demand. Calculate this by adding up the flow rates (measured in gallons per minute) of all fixtures and appliances you might use at the same time. For example, if you typically run a shower, kitchen sink, and washing machine together, add those GPM numbers to find your total demand.
Condensing models use a dual heat exchanger to capture and reuse heat that would otherwise escape, making them more energy-efficient than non-condensing models with single heat exchangers. The improved efficiency means lower operating costs over time, which can help offset the higher purchase price.
Never descale again. EVER.
Our Gas Tankless Water Heaters with X3® Scale Prevention Technology require no scale related maintenance, and offer three times longer life compared to standard tankless.
