5 Tips for Buying a Tankless Water Heater

By Fran J. Donegan

Water heating accounts for 18 percent of the average household’s energy bill, making it the second-largest chunk of the typical energy budget, after heating and cooling. Replacing an old water heater with a high-efficiency model, such as a tankless water heater, will save you money and reduce your home's energy usage.  

Unlike conventional heaters that store water in an insulated tank until you need it, tankless heaters produce hot water on demand. When you turn on the tap, water flows through the unit and is heated before it reaches the faucet, so there is no wasted energy keeping the water at a set temperature when it isn’t needed. The Department of Energy estimates that if a family uses less than 41 gallons of hot water a day, a tankless on-demand heater is between 24 and 34 percent more energy-efficient than a heater with a conventional storage tank.

As with other models, tankless heaters must be installed by a professional. Here are some things to know if you’re considering one for your home.

1. They’re Low Maintenance

Tankless heaters tend to last longer than most traditional models. Their lifespan is about 20 years, compared with 10 to 15 for that of a conventional heater. Additionally, tankless heater components are modular, so if something goes wrong, the malfunctioning part can easily be swapped out. That saves you from having to replace the entire unit if a problem occurs.

2. Look for a High Energy Factor

Tankless water heaters are available in both gas and electric models. Those that meet Energy Star requirements have an energy factor (EF) rating that is equal to or above 0.90. The EF reflects the efficiency of the heater in converting fuel—natural gas, propane and the like—into hot water. It’s always expressed as a decimal, so an EF of 1.0 means that 100 percent of the heater’s energy is converted into hot water. You can find many gas-powered tankless heaters on the market with EFs of 0.95 and above. The most energy-efficient models usually have electronic spark ignition and two heat exchangers.

3. There are Multiple Unit Options

If you don’t regularly use a lot of hot water, you can buy one tankless heater to take care of your entire home. Families with bigger needs can connect multiple units for whole-house water heating. Another option is to install point-of-use heaters that provide hot water for a single sink or shower.

Because there is no storage tank, a tankless heater can be hung on a wall, freeing up the floor space a conventional tank would occupy and giving you more installation options. Gas models need to be vented to the outside, but many offer direct venting capabilities, so the vents can run vertically through the roof or horizontally through the wall of a house.

4. Consult a Professional for the Right Fit

Unlike conventional water heaters that are sized by the number of gallons the tank holds, tankless heaters are sized by the number of gallons of hot water they produce per minute (GPM). This is where finding the right size unit can get tricky. You have to estimate the peak hot water demand of your house, so if it's not unusual for someone to be in the shower while there is a load of clothes in the washer, you will need a unit that can produce enough hot water to run both the shower and the washer at the same time. Discuss your needs with a plumber or a product manufacturer's representative.

The table below, "Average Hot Water Demand," can help with some general estimates.

Average Hot Water Demand

Shower and Bathtub

2.5 GPM

Washing Machine

3.3 GPM

Kitchen and Bathroom Sinks

2.2 GPM


1.3 GPM

Source: Energy Star

5. Your Location Makes a Difference

You also need to consider how much the heater will need to raise the temperature of the incoming water, as that affects its GPM capability. The temperature of the water that enters your home may be warmer or cooler based on the climate where you live, from an average of 35 to 40 degrees in the extreme north to 65 to 70 degrees in the south.

The hot water you use is typically heated to 120 degrees, so there could be a significant temperature difference between the incoming water and what’s coming out of the tap. The maximum GPM for a unit may be eight or nine, but if the unit must spend time raising the water’s temperature 70 degrees, that GPM could be cut in half. The manufacturer's literature will provide GPM at different incoming water temperatures, so be sure to take that into consideration.

Tankless water heaters offer unique flexibility and energy-saving benefits. If you’re thinking about purchasing one, consult with your plumber to find the right size and style for your home.

Home improvement and DIY author Fran Donegan writes on home infrastructure systems, including water heaters, for The Home Depot. Fran is the author of several DIY books, including Pools and Spas and Paint Your Home. You can research Home Depot’s selection of water heaters online at http://www.homedepot.com/b/Plumbing-Water-Heaters/N-5yc1vZbqly.


Topics: Bathroom, Cost of Ownership, Energy Star, Tankless Water Heaters, Water Heaters

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