Best Tankless Water Heaters: Types and How to Choose

The short answer: the best tankless water heater is the one sized for your coldest incoming water and your busiest hour, powered by a fuel and electrical or gas supply your house can actually deliver. Work out the flow you need in gallons per minute, find the temperature rise between your winter inlet temperature and your target, and choose a unit whose rated output covers both. Then budget for the infrastructure, since venting, gas line upgrades or heavy electrical circuits often cost more than the heater itself.

In this guide

• How tankless heaters work
• Types of tankless water heaters
• Sizing: flow rate and temperature rise
• Gas or electric: what your house needs
• Features that matter
• Installation overview
• Maintenance and descaling
• Safety and code requirements
• Common mistakes
• Who should choose what
• Checklist
• FAQ
• Conclusion

How tankless heaters work

A conventional storage water heater keeps a tank of water hot around the clock, losing some heat through the tank walls even when nobody is home. A tankless heater, also called an on-demand heater, stores almost nothing. When you open a hot tap, a flow sensor detects moving water and the burner or heating elements switch on, warming the water as it passes through a heat exchanger. Close the tap and the heater stops.

The appeal is plain. There is no standby loss from a big tank, the unit is compact enough to hang on a wall, and hot water does not run out in the way a drained tank does, because it is heated continuously. Many owners also value the saved floor space.

The trade-offs are just as real. Output is limited by the heater’s power, so if the demand exceeds capacity the water simply is not as hot as you wanted. The heater needs a minimum flow to switch on, which can cause trouble with very low flow taps. And the installation requirements are more demanding than a like-for-like tank swap, which is why many projects cost more than owners expect. Energy savings depend heavily on how much hot water you use, so be cautious about any claim of a fixed percentage saving and compare the manufacturer’s published efficiency ratings for the specific units you are considering.

Types of tankless water heaters

Gas-fired non-condensing

These burn natural gas or propane and exhaust hot combustion gases through a stainless or specialised vent. They are usually the lower-priced gas option. Because the exhaust is hot, they typically need vent material rated for high temperature, which is more costly and carries stricter installation rules.

Gas-fired condensing

A second heat exchanger extracts additional heat from the exhaust, which condenses into slightly acidic water. This improves efficiency and lowers exhaust temperature, which usually allows plastic vent pipe, but it requires a condensate drain with neutralisation in many jurisdictions. These units typically cost more up front.

Electric whole-house units

Electric tankless heaters use resistance elements and have no combustion, so they need no flue and can be installed in more places. They are very close to fully efficient at the point of use, but they draw a large amount of power. A whole-house unit often needs multiple high-amperage circuits and a service panel with enough spare capacity, so a panel upgrade may be on the bill.

Point-of-use electric units

Small units serve one sink or a distant fixture. They are modest in output, easy to install and useful for places where waiting for hot water is annoying, but they do not serve a whole house.

Sizing: flow rate and temperature rise

Tankless sizing is a two-variable problem. You need enough flow, measured in gallons per minute, and enough heating power to lift the water from its cold inlet temperature to your target temperature at that flow.

Step one: add up peak flow

List the hot water fixtures that may run at once. Typical examples are a shower, a bathroom sink, a dishwasher and a washing machine. Use the flow rating stamped on each fixture or listed in its specifications. As a loose planning guide, showers commonly use a couple of gallons per minute, kitchen and bathroom faucets somewhat less than that, and appliances use a variable amount. Add the numbers for the simultaneous use you realistically expect, not the worst possible combination.

Step two: find the temperature rise

Temperature rise is the target temperature minus the incoming cold water temperature. Incoming water is coldest in winter, and that is the figure that counts. Your utility or a local plumber can often tell you typical winter groundwater temperatures, and you can measure with a thermometer at a cold tap after letting it run. Many homes set the target at around 120 degrees Fahrenheit, or slightly higher, for showers and basins. If winter water arrives at 45 degrees, the rise is about 75 degrees.

Step three: calculate the required output

A simple rule of thumb: output needed in BTU per hour is roughly flow in gallons per minute times temperature rise in degrees Fahrenheit times 500. For example, 3 gallons per minute with a 70 degree rise needs about 105,000 BTU per hour, delivered to the water. Real gas units lose some energy in combustion, so the rated input is higher than the output by an amount that depends on efficiency. For electric units, divide the BTU figure by about 3,412 to estimate kilowatts, so that same example is a little over 30 kilowatts.

That last figure is why electric whole-house heaters struggle in cold climates with high demand. Thirty kilowatts at 240 volts is over a hundred amps, which many homes cannot supply without major electrical work. This is the main reason that many northern households rely on gas units while electric tankless fits southern homes with warmer inlet water or lower demand.

Gas or electric: what your house needs

Many buyers fixate on the heater when the supporting infrastructure drives the decision. Check these questions before you choose.

• Gas supply. A tankless unit may have a higher peak input than the storage heater it replaces, which means the existing gas pipe and meter may be undersized. The gas fitter calculates the required capacity of the line.
• Venting path. Is there a practical route for the flue through a wall or roof, with the required clearances from windows, doors and air intakes?
• Combustion air. Many units draw room air. Sealed-combustion models draw air from outdoors through a dedicated pipe, which suits tight, modern houses.
• Electrical capacity. For electric units, ask an electrician to evaluate the panel and service. Ask about both the main service rating and spare breaker slots.
• Fuel prices. Local electricity and gas prices change over time. Compare current rates before assuming one is cheaper.

Features that matter

• Modulating output. A heater that adjusts its power to the demand holds temperature steadier than one that cycles on and off.
• Low minimum activation flow. This determines whether the heater starts for a trickle at a basin.
• Isolation valves for flushing. Service valves make descaling much easier. Some units include them while others require adding them.
• Certifications and ratings. Check the label and the manufacturer’s documentation for safety listings and efficiency ratings applicable in your country, and confirm them where you can rather than trusting a retailer’s summary.

Installation overview

Installation of a tankless heater involves plumbing, plus gas and venting or high-power electrical work. Hire licensed professionals, obtain permits and arrange inspection where your local code requires. This is not a place for guesswork, especially for gas appliances.

1. Survey. A contractor checks gas line size or electrical panel capacity, the vent route, the drain for condensate, and the clearance to combustibles.
2. Mount the unit. Fix to the wall as the manufacturer specifies, with the required clearance for service.
3. Connect water. Install isolation valves with a service port for flushing, and a pressure relief arrangement as the manual and code require.
4. Connect fuel or power. A licensed gas fitter runs and tests the gas line, or an electrician pulls dedicated circuits with correctly sized breakers and wire.
5. Vent and drain. Install the specified vent material with sealed joints and the required slope. Run the condensate line to an approved drain with neutraliser if needed.
6. Commission. Purge air, check for leaks, test combustion safety where applicable and set the temperature.

Maintenance and descaling

Tankless heaters do not need much attention, but what they do need is important. Mineral scale builds up inside the heat exchanger, especially in hard water areas, reducing flow and efficiency and eventually causing errors or failure.

• Flush with a descaling solution. Using a small pump and the isolation valves, circulate a descaling solution recommended by the manufacturer through the unit. Many manufacturers suggest annual servicing, with more frequent descaling for hard water.
• Clean the inlet filter. A small screen at the cold inlet catches debris. Check it when you flush.
• Consider a softener. If your water is hard, softening or conditioning reduces scale, and some warranties require it. Test hardness first.
• Inspect the condensate path. Condensing models need a clear drain and, where fitted, a neutraliser that needs periodic replacement.
• Have gas appliances inspected. Periodic professional inspection of combustion, venting and gas connections is sensible.

Safety and code requirements

• Carbon monoxide. Fuel-burning heaters can produce carbon monoxide if poorly vented. Install CO alarms on each level and near sleeping areas, test them regularly and never ignore an alarm.
• Licensed installers. Gas work should be done by a licensed gas fitter or plumber, and electrical work by a licensed electrician.
• Permits and inspection. Most areas require them for water heater replacement or fuel appliance installation.
• Vent clearances. Terminations need distance from windows, doors, vents and walkways, per the manual and code.
• Scald protection. Higher output heaters can deliver very hot water. Set the temperature thoughtfully, especially around children or older adults, and consider a tempering valve.
• Relief valve. Pressure and temperature relief devices must be installed where required, with discharge piped to a safe location.
• Gas leaks. If you smell gas, leave, avoid switches and flames, and call the gas company or emergency services from outside.

Common mistakes

1. Sizing for summer water. The coldest winter inlet temperature determines capacity.
2. Ignoring the gas line. Undersized piping starves the burner and causes errors.
3. Underestimating electrical needs. A whole-house electric unit may need a panel upgrade.
4. Skipping descaling. Scale quietly reduces performance and can void warranties.
5. Expecting instant hot water. Tankless does not shorten the pipe run. Distance still causes a wait unless you add recirculation.
6. Forgetting the cold water sandwich. If you shut off and quickly restart a tap, a slug of cold water may arrive after the heater has shut down, then the heated water, then the stale cold water in the pipe.

Who should choose what

If you simply want to replace a failing tank and keep the budget modest, a quality storage heater may be the more practical choice. Tankless suits people who value space, long showers and the option of continuous supply, and who can accept the infrastructure cost. You can browse specifications and read dimensions on retail listings such as tankless water heaters. For upkeep, a tankless descaling flush kit includes the pump and hoses needed, and a carbon monoxide alarm is a worthwhile addition near any fuel-burning appliance. Check each product’s compatibility and listed certifications before you order.

Checklist

• List the hot water fixtures likely to run together and note each flow rating.
• Measure or look up winter inlet water temperature and set a target temperature.
• Calculate required output with flow, temperature rise and the factor of 500.
• Compare with the manufacturer’s flow-versus-rise tables.
• Ask a gas fitter to check the gas line and meter capacity, or an electrician to check the panel.
• Plan the vent route and condensate drain.
• Check the label and manuals for safety listings and efficiency ratings.
• Confirm the minimum activation flow suits your fixtures.
• Check hardness and decide on softening or a flush schedule.
• Get written quotes that include permits, venting and any upgrades.
• Install carbon monoxide alarms and test them.
• Set the temperature limit with scald risk in mind.
• Calendar the annual descaling flush.

Frequently asked questions

Do tankless water heaters really provide endless hot water?

They heat continuously, so they do not run out like a drained tank. But output is limited. If you demand more flow than the unit can heat, the temperature drops.

Are tankless water heaters cheaper to run?

They avoid standby loss, which helps especially in low-use homes. Real savings depend on usage, fuel prices, efficiency ratings and maintenance, so avoid taking any fixed percentage for granted.

Is gas or electric better?

It depends on your climate, fuel availability and electrical capacity. Gas units handle high flow and cold inlet water more easily, while electric units are simpler to vent but demand heavy circuits.

Why does my shower go cold briefly after a short pause?

That is the cold water sandwich. The heater shuts off between uses, and when you restart, a short slug of cold water can pass before the heater warms the stream. Buffered units or avoiding very short stops can reduce it.

How often should a tankless heater be descaled?

Follow the manufacturer. Many recommend annual servicing, with more frequent attention in hard water areas. Testing your hardness tells you how aggressive to be.

Can I install a tankless heater myself?

Gas, venting and high-power electrical work typically need licensed professionals and permits. Mistakes carry serious risks including carbon monoxide and fire, so hire qualified installers.

Will my old vent work?

Often not. Tankless heaters use different flue gas temperatures and materials than tank heaters. A professional should check the manual and local code before reusing anything.

How long do tankless heaters last?

Manufacturers often claim longer life than tanks, but actual life depends on water quality, usage and maintenance. Read the warranty terms and keep up with flushing.

Conclusion

Choosing among the best tankless water heaters comes down to arithmetic and infrastructure rather than brand names. Know your peak flow, use your coldest winter inlet temperature to find the temperature rise, and calculate the output needed. Check that your gas line, vent path or electrical panel can support the unit before you fall in love with a model. Choose features that suit how you live, protect the heater with regular descaling, and install carbon monoxide alarms. Use licensed professionals, pull the permits and keep the manuals. A heater selected and installed this way can deliver comfortable hot water for many years.

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