Key Takeaways

• Be sure to look beyond initial up-front costs to long-term operating costs, factoring in equipment, installation, and possible hidden costs before choosing.

• Consider your household’s hot water requirements. Account for peak demand and simultaneous use to identify a unit that provides desired output and flow rate appropriate for peak usage.

• Local climate, groundwater temperature, and fuel availability all have very important impacts on system performance. These factors have a huge influence on the efficiency of both gas and electric systems.

• Don’t forget installation requirements, such as venting for gas units or electrical upgradation for electric models. As always, use qualified professionals to install these systems to ensure safe and effective operation.

• Consider energy efficiency ratings Read up on what various ratings mean and how they’ll affect your utility bills and environmental footprint when choosing a model.

• These are effective ways to reduce your upfront costs for a new tankless water heater and future operation costs, too.

When deciding between gas and electric tankless hot water heaters, I start by considering the square footage of my house. After that, I consider how much hot water I use and what kind of hookups I have.

Gas tankless units generally heat water more quickly and can be better for larger homes with high demand needs. Electric tankless heaters are suitable for small homes or condos, and they shine brightest in situations where gas lines are not readily accessible.

Upfront cost, install steps, and upkeep all vary wildly depending on which type I choose. My decision would depend on how much money I have to spend.

It’s a little complicated by how I use hot water and how easy it would be to set each option up. Below, I narrate through each section, so you can make an informed decision that suits your everyday lifestyle.

What Are Tankless Water Heaters?

Tankless water heaters work by heating water as it flows through the unit, so you get hot water when you need it. These units eliminate the need for a holding tank altogether. Rather than holding thousands of gallons of water, they provide one continuous supply of hot water whenever you need it, making them a popular choice among homeowners looking for an efficient water heating solution.

You don’t need to wait for a water tank to fill up. That translates to an endless supply of hot water, even while taking a long shower or running the dishwasher at the same time. These systems work best in larger homes with several bathrooms, especially for those with high hot water usage habits.

Their compact profile saves storage space. You can wall-mount one in a closet, basement, or even under a sink. In a narrow city apartment or even a suburban house where every floor space is accounted for, this can be a big deal, particularly when considering the benefits of an electric tankless water heater.

By heating only what you use, tankless systems eliminate wasted energy. You’re not paying to keep a big old tank hot all day and all night long. That wouldn’t come close to making up for the extra first cost of a gas tankless water heater, but it does mean significantly cheaper utility bills over time.

The average initial cost of a tankless unit is $1,000-$6,000, with the typical person spending $2,600. Installation costs range from $900 to $3,000. You’ll spend a lot more up front than you would with a traditional water heater. With regular maintenance, these units can last 20 years — nearly double the lifespan of a tank model.

Depending on your needs, you can choose gas, electric, or hybrid models. Each has its own applications, but all three boast the same fundamental benefits. Some routine maintenance such as descaling and flushing keeps them at peak performance, ensuring that your tankless water heater installation is a worthwhile investment.

In any home where space use, energy efficiency, and constant availability of hot water are priorities, a tankless heater is a great choice, offering a modern alternative to conventional storage water heaters.

Gas vs. Electric: The Core Showdown

When deciding between gas tankless water heaters and electric tankless water heaters, think about your upfront expenses and the tankless water heater installation. Additionally, consider the operating costs and suitability of each option to your home’s needs. Each type comes with distinct advantages, particularly regarding cost savings and energy consumption.

1. Initial Costs: Equipment & Setup

Gas tankless heaters retail for around $1,000, but electric whole home run $500–$700. Gas units usually require venting and new and/or upgraded gas lines. These jobs add significant cost and can lead to dreaded permits.

Electric units are physically smaller, but they often require significantly more robust on-site wiring.

2. Long-Term Operating Expenses Compared

Gas heaters consume a more affordable fuel source, but require annual inspections and filter replacements. Depending on maintenance and gas prices, that could make a huge difference in what you spend each year.

While electric units are more expensive to operate in the regions where they are commonly used, they almost never require repair or maintenance.

3. Energy Efficiency Ratings Explained

Gas tankless water heaters typically average under 85% efficiency rating, while electric tankless water heaters boast over 98% efficiency, significantly reducing energy costs and waste.

4. Hot Water Output & Flow Rate

Gas heaters can heat that water faster, and they’re plumbed for higher flow rate initially, so you might get very hot water at first. For larger families or homes where two or more showers are going at the same time, it shifts in favor of gas.

Electric models are best for smaller homes or single-use arrangements.

5. Installation Needs & Complexity

Gas tankless water heaters require extensive venting and gas connections, often necessitating local code review and permitting. In contrast, electric tankless water heaters require less installation effort—just some heavy-duty wiring and a suitable wall-mounted space.

6. Venting Requirements: A Key Difference

Gas tankless water heaters require safe venting for harmful fumes, which increases installation time and expense, while electric tankless water heaters eliminate this step, making them ideal for cramped spaces.

7. Lifespan and Maintenance Demands

Electric resistance heaters, like the electric tankless water heater, are long lasting and require minimal maintenance, while gas tankless water heaters need annual upkeep but can last as long with proper care.

8. Safety Considerations Compared

Because gas tankless water heaters require regular inspections for gas leaks and proper venting, an electric tankless water heater operates cleanly, making maintenance easy and safe.

9. Environmental Impact Factors

Gas tankless water heaters emit greenhouse gases, while electric tankless water heaters are cleaner overall, especially with a grid powered by green energy.

Assess Your Household Hot Water Needs

Understanding your daily hot water usage will help you select the proper size tankless water heater. To start, think about the needs in your household.

Second, consider the number of people in your household and the peak hour hot water demand. A two-person apartment with one bathroom can save over 35 gallons a day.

A household of five can use much more than that, particularly with three showers in the morning. It’s key how many showers, dishwashers and washing machines you’re operating simultaneously.

A kitchen sink, shower and high-efficiency washer can easily run simultaneously. Combined, they would use 6.0 gallons per minute (GPM).

A checklist makes it easy to track your habits: count bathrooms, note how many showers run at once, list appliances needing hot water, and write down busy times like mornings or evenings.

This method allows you to better understand your true peak demand. From there, you can calculate your maximum demand and then match that demand to the maximum your heater can accommodate.

Calculate Peak Demand (GPM)

To determine your home’s peak demand, begin by calculating the GPM for each fixture. Next, total them for all the fixtures you might use at the same time.

A typical shower head runs around 2.0 GPM, kitchen sink around 1.5 GPM, and a washing machine may use 2.5 GPM. To calculate flow, fill a 1-gallon bucket from each fixture and time how long it takes to fill the bucket.

Take 60 and divide that by how many seconds it takes to fill the bucket. Add up each fixture’s GPM for your household total.

• List all fixtures/appliances using hot water.

• Measure each GPM using the bucket and timer method.

• Add GPMs for fixtures used at the same time.

• Use total to size your heater.

Consider Simultaneous Use Scenarios

If you have two or more people showering at the same time as the dishwasher is running, your demand skyrockets. If your home hot water heater isn’t large enough, you only receive a stream of lukewarm water.

Monitor simultaneous usage. Have household showers, sinks or washing machines going all at the same time? Consider the rhythms of your week—early-morning rushes?

Factor in Groundwater Temperature

For one, if your groundwater is colder, your heater has to work that much harder to heat the water. It can be as cold as 40°F in extreme northern states, and as warm as 60°F in southern locations.

Gas heaters do a better job of heating incoming water quickly in cold climates. Electric models will require greater electrification in these terms.

• Northeast: 42–52°F

• Midwest: 47–54°F

• South: 57–70°F

• West: 50–60°F

Installation: What to Expect

When you plan for a tankless water heater installation, you deal with a few steps before hot water runs through your taps. Second, there’s what the total cost conceals. Riding the Inflation Reduction Act wave for gas tankless water heaters, you’re looking at $1,000-$3,500, while electric tankless water heaters are cheaper at $500-$1,500. For the safety of everyone, most people leave the installation task to a trained professional.

Installation can be a nightmare if gas lines, venting, and/or heavy electrical work is required. A handful of uncomplicated electric models allow for doing it yourself, but be sure to consult local codes. Both Lowe’s and Home Depot (and other local stores) can connect you with a pro if that would be a better fit.

Prior to beginning installation, select your unit and remove any obstacles from the space. Be sure to pick up any permits needed by your municipality. Check that your water main shut-off valve isn’t hard to get to. This smart technology not only connects new water lines but actively checks for leaks and in some cases identifies outdated pipes.

Regular annual service keeps your gas tankless heater in top working order and can identify minor problems before they become major repairs.

Gas Line & Venting Logistics

You’ll need:

• Pipe wrench

• Flexible gas line

• Pipe sealant

• Drill

• Vent pipe

Electrical Upgrades Needed?

Your breaker panel may not be up to snuff, especially if you’re considering a tankless water heater installation.

• Panel size

• Breaker space

• Wire gauge

• Permits

Space Requirements & Location

Both of these types require a good amount of wall space and very easy access. Prevent them from getting into damp areas and where you would use cold water hot. Great places are the parking structure, mechanical room, or cellar.

To conserve floor space, especially in narrower rooms, wall-mounting is beneficial. Consider options like:

• Garage wall

• Utility closet

• Basement wall

• Near main water line

Finding Qualified Installers

Hire a plumber—preferably one who is licensed and has tankless experience. Inquire about completed work, read online reviews, and obtain multiple estimates.

Smart questions include:

• Are you licensed and insured?

• How many tankless units have you set up?

• What’s the warranty on your work?

• How long does install take?

Understanding Advanced Features & Tech

Today’s advanced tankless water heaters are loaded with technology and features that make life easier while saving you more money. These updates are more than just a fancy way of heating water quickly; they represent a shift towards efficient water heating solutions. With new technology, these units can have a lifespan of 15–20 years with minimal annual maintenance, translating into less hassle and reduced lifetime costs.

All the gas and electric tankless water heater models offer smart controls and sensors. These features maintain consistent water temperature, effectively eliminating the risk of scalds or cold shocks. You’ll find features such as digital readouts, multiple preset temperature settings, and some models that even include Wi-Fi or smart app controls for added convenience.

A few electric tankless models run on 240 volts. They deliver a powerful 14 to 32 kW of output, so the more kW, the more hot water you can enjoy precisely when you need it. Gas units, on the other hand, only deliver 140,000 to 199,000 BTU. This range offers the ideal heating for everything from compact residences to dynamic workplaces.

When selecting a tankless water heater, consider the key differences between electric and gas models, as well as their respective efficiencies and water flow rates. This will ensure you choose the best option for your hot water usage habits.

• Digital thermostats for easy temp control

• Auto shut-off and leak detection features provide added peace of mind

• Wi-Fi or app control for remote changes

• Recirculation pump compatibility for near-instant hot water

• Energy monitoring to help cut bills

Condensing vs. Non-Condensing Gas Units

These units employ two heat exchangers, allowing them to be more efficient by capturing additional heat from exhaust. That translates into lower energy bills. Non-condensing models use a single heat exchanger, so they’re less expensive and less complicated at first. They do lose more heat out the vent.

For a large family or high-demand applications, corroding models save money in the long run. Non-condensing is fine for smaller homes or in locations where venting is a challenge.

Smart Home Integration Options

Smart home technology allows you to set temperatures remotely or monitor energy usage through your smartphone. Just like other high-tech appliances, many of today’s tankless heaters now connect with you through Alexa, Google Home, or Apple HomeKit.

You receive notifications, keyless access, management, and usage monitoring are accessible remotely from any internet-enabled device.

• Ease of control from your phone or smart speaker

• Track how much hot water you use

• Spot leaks or problems fast

• Boost energy savings with smart scheduling

Recirculation Pump Compatibility

Recirculation pumps reduce the wait time for hot water to seconds—ideal for larger households. In addition, not every tankless model is compatible with these pumps, which is why it is important to verify before purchasing.

Pumps conserve water, as well, because you’ll never need to run the tap for several minutes. Look for:

• Compatibility with your heater model

• Pump size for your home’s layout

• Simple controls for on-demand hot water

• Support for timers or motion sensors

Cost Beyond the Sticker Price

When you consider going tankless, the purchase price is only the beginning. On the surface, gas tankless water heaters and electric tankless water heaters may seem to have similar costs. However, the real gap emerges over time. You need to factor in maintenance, utility costs, and even retrofitting your home’s layout, which can significantly impact tankless water heater installation costs.

Electric units will likely require service upgrades from 100 to 200 amp service. This modification can run up to $1,000. If your project requires 400 amps, that figure might easily be doubled. Costly infrastructure older homes may need bigger gas pipes or an increase in pressure from the gas provider. This overwhelming requirement can wreak havoc on costs.

Long-term expenses extend beyond installation. Cleaning, flushing, or swapping out parts every year is crucial to keep the system performing at its best. Gas tankless water heaters require more frequent maintenance, particularly for venting and burners, which can add to overall costs.

Calculating all of your electric and/or gas bills can uncover a shockingly high cost. Even in places with higher electricity prices, electric models can operate much costlier. The U.S. Department of Energy notes that tankless water heaters can save up to 50% on energy if you factor in use and local rates, making them an efficient choice.

Total cost of ownership goes beyond simply purchasing the device. It’s important to map out the cost for purchasing, installing, maintaining, and operating the heater, including costs related to your specific hot water usage habits and the differences in fuel type.

• Upgrading electric or gas supply lines

• Annual or semi-annual servicing

• Energy use based on your rates

• Replacement parts

Impact of Local Utility Rates

The above calculations assume you pay your utility the same rates you would in your hometown. This could be the case in much of the country where electric costs are high enough to make gas models cheaper over their lifetimes.

Gas prices are volatile, so be sure to get a local price before purchasing gas. Especially in high-rate areas, these energy-smart models allow families and communities to save in their energy bills. To weigh this, consider:

• Compare electric and gas rates in your zip code

• Ask your utility company about rate hikes or discounts

• Ask whether you can negotiate a gas or electricity price in advance.

• Look for models with better energy ratings

Rebates, Incentives, and Tax Credits

Additionally, several states and cities provide rebates or tax incentives to install energy-efficient tankless heaters. States aren’t the only ones in charge of EV incentive programs—brands and utility companies operate their own programs as well.

Federal tax credits can shave hundreds off the price if you know which model to select. For info, check:

• Your state’s energy office

• Utility company rebate pages

• ENERGY STAR’s rebate finder

• IRS website for tax credit details

Long-Term Value Proposition

With energy efficiency and longevity, tankless water heaters can save you money in the long run.

They provide substantial savings. Lower energy bills, less frequent repairs, and longer lifespans all contribute to substantial savings for your bottom line. These systems can actually increase your home’s appraised value, as homebuyers appreciate energy savings.

The big factors are:

• Lower monthly energy bills

• Less money spent on repairs

• Possible boost in resale value

• Fewer water leaks and related fixes

Regional & Climate Considerations

Take water heaters, for example. Where you live and what your climate is like should dictate which option’s best for you. The kind of power that’s most accessible is different. This has major implications for what makes the most financial sense for your home. Even within the same state, what works for one individual may be ill-suited to another.

In other areas, such as Portland, Oregon, hydroelectric power makes up a majority of the grid. That means electric water heaters use clean energy and often cost less to run, matching up with local eco goals.

Colder Climates Favor Gas Power?

In colder areas of the country, gas tankless heaters perform best. Because they heat water so quickly, it doesn’t matter if the water coming in is frigid. Groundwater in Minnesota winters can be well below freezing temperatures. As a result, electric models may need to be more powerful and can be slower to catch up.

Gas units provide essentially unlimited flow rates, which is ideal for very large water heating demands. They effortlessly manage increased loads, such as two showers and a laundry at the same time, without cooling down. If you reside on the colder side with long, cold months, look to gas models that have freeze protection.

Second, ensure that they have a good venting system too. Be sure to consult the heater’s specifications for maximum output at low groundwater temperatures.

Fuel Availability and Pricing Trends

Whatever the project, the fuel you’re able to obtain makes all the difference. While some communities have access to low-cost, consistent natural gas, many others are facing fluctuating electric prices tied directly to market demand. In cities like Portland, where electricity comes from hydro, electric units often cost less per month and cut down carbon.

In regions with the highest electric prices, building with gas can save you big bucks on your utility statement. This is particularly the case given that water heating can represent almost 20% of a home’s costs.

Keep an eye on:

• Local fuel supply (gas lines or electric grid strength)

• Price trends for natural gas and electricity

• Local rules about energy use or emissions

• Upfront costs versus long-term savings

Making the Right Choice for You

Choosing between gas and electric tankless water heaters begins by considering your home, lifestyle, and budget. A 3.5 GPM unit would be suitable for a small bathroom or application serving one to two individuals. We are able to run both a shower and a sink with hot water simultaneously.

Homes with more people and frequent guests often use higher flow rates above 7 GPM. This guarantees that showers and laundry can operate at the same time without complications. Energy bills are a large factor as well. In places where gas is cheaper, a gas tankless water heater can help maintain low energy bills.

Where electricity is cheaper or more stable, electric models tend to be a no-brainer. We know that water quality is really a key thing too. If you have soft water, or run a softener system, arrange for a maintenance inspection.

Try to do this every 3–5 years. Routine maintenance is the best way to ensure your heating system continues to operate efficiently and it can save you money in the long run. Rebates make them more affordable, as well. In Ontario, residents are eligible for a rebate of up to 25% per heater, to a ceiling value of $500.

Keep in mind that some models are ineligible for this rebate. Upfront, on-demand or tankless water heaters cost between $1,000 and $3,000. Tank models are around $300 more. Consider the savings over time and the space saved by going tankless.

A handy checklist helps: size up your home’s needs, check energy prices, look for rebates, think about your water, plan your budget, and remember regular upkeep. Be sure to have an HVAC professional who is familiar with the brand you choose to go with. This ensures that you end up with a system that truly integrates with your life and has the potential to operate effectively.

Conclusion

Picking between a gas or electric tankless water heater comes down to what fits with your space, habits, and budget. Gas units are better for quickly heating large amounts of water efficiently. They’re ideal for large families or households that have to accommodate multiple showers at the same time. Electric models require less effort to install and operate out-of-the-box in tight spaces or warm climates. Both provide hot water on demand and eliminate extensive wait times. Consider your home’s infrastructure, your hot water usage patterns, and how much you’re willing to spend. Watched a ton of houses succeed in each direction and admit both are capable of creating a successful outcome. Looking to decide on a gas v electric tankless water heater for your needs? So make the short leap, contact a nearby expert, and stop screwing around with the hot water supply.

Frequently Asked Questions

What is the main difference between gas and electric tankless water heaters?

Gas tankless water heaters utilize natural gas or propane for heating, while electric tankless water heaters rely on electricity. Although gas units often deliver the highest flow rates, the tankless water heater installation for electric units is generally simpler and more efficient.

Which is more energy-efficient: gas or electric tankless water heaters?

In general, electric tankless water heaters are more energy-efficient due to the absence of standby heat loss, while gas tankless water heaters are often better suited for faster hot water delivery for bigger households.

How do I determine the right size tankless water heater for my home?

Determine your maximum hot water usage in GPM, considering the efficiency rating of your chosen tankless water heater. Calculate the total flow rates of appliances that you’ll have on at the same time to select a unit that is equal to or greater than this total GPM.

Are gas tankless water heaters harder to install than electric ones?

Yes. Gas tankless water heaters require venting, running gas lines, and possibly upgrading to a larger gas meter, while electric tankless water heater models typically require only upgraded wiring, making tankless water heater installation more straightforward and less expensive.

What are the long-term costs to consider for each type?

Gas tankless water heaters typically have a higher up-front cost due to tankless water heater installation and maintenance. However, when natural gas prices are lower, those costs can lead to cheaper operations compared to electric tankless water heaters, which may be more expensive to operate.

Does my climate affect which type I should choose?

Yes. If you live in a colder climate with higher demand for hot water, gas tankless water heaters will be better suited to your needs compared to electric tankless water heaters, which are a good option in milder climates or homes with lower hot water usage habits.

Can I use a tankless water heater with existing plumbing and appliances?

Generally speaking, absolutely. Neither type of tankless water heater requires special retrofitting to connect with your existing plumbing. You’ll likely require electrical system upgrades for an electric tankless water heater or venting/gas line changes for gas tankless water heaters. As always, we recommend consulting a local pro.