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Gas vs Electric Tankless Water Heater: Which is Best

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When buying a new tankless water heater system one of the first questions most homeowners ask is, "which is better, gas vs electric?"  Each has their advantages and shortcomings, but often the decision is out of your hands and is determined by which fuel is available in your area.

There are 3 common fuel sources for tankless water heaters:

  1. Electric
  2. Natural Gas
  3. Propane 

Gas vs Electric Tankless Water Heater: Which to Choose

Gas on-demand systems are designed to burn either natural gas or propane, but they operate in the same way. Many manufacturers offer the same model with the choice of either natural gas or propane for fuel.

Electric systems, however, have a totally different design. Beyond the function of heating water there are very few similarities on how they operate. Here's a detailed guide where we pick our favorite tankless water heaters.

Man standing between a right arrow and a left

Deciding Between a Gas vs Electric Water Heater

 Which fuel source is right for you depends on many different factors. The first and most important, is which fuel you have available in your area. Many communities don't have access to natural gas or propane and their only option is electric.

In other situations, your home electrical supply may not be able to support an electric water heater without major upgrades. Each household has its own unique set of circumstances, and finding the best match will play a large role on your overall satisfaction for years to come.

Tankless water heaters are designed to last for 20+ years! This makes them a major investment both from a financial and time perspective. Many homeowners find consulting with a professional on your specific situation to be very helpful. 

Factors to Consider

  • Household hot water demands
  • Installation requirements
  • Budget
  • Personal preference
Lady drawing puzzle pieces on glass with price and value written inside

Initial Price

Gas Tankless Water Heaters

  • Gas on-demand units are higher priced. You can easily spend over $1,000 to purchase a quality system.
  • Non-condensing systems are less expensive to purchase, but more expensive to install. Largely because of the venting requirements.
  • Condensing units are more expensive to purchase, but since they do not require venting, the cost of installation is lower.

Electric Tankless Water Heaters

  • Electric units are significantly less expensive than gas systems. A quality electric tankless water heater can be found for $500.
  • Installation expenses are largely determined by the home's electrical situation. See below: Installation Requirements.
EcoSmart ECO 27 Electric Tankless Water Heater, 27 KW at 240 Volts, 112.5 Amps with Patented Self Modulating Technology

EcoSmart Electric Tankless Heaters

EcoSmart makes a quality electric tankless water heater at a budget friendly price. With 6 sizes to choose between, you should be able to find the right size to meet your home's hot water needs.

Assembling plumbing pipes with fittings

Installation Requirements

Gas Tankless Water Heaters

  • Gas tankless units are much more expensive and complicated to install.
  • A non-condensing unit requires a complex category III venting system which is made from stainless steel. This venting system allows for adequate air flow for combustion.
  • The existing venting ducts typically need to be replaced when transitioning from a tank-style to a tankless water heater.
  • The home's incoming gas line may also need to be upgraded to accommodate the new system's energy demands.
  • Frequently, there are costly modifications necessary to meet the new unit's gas and venting requirements.

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Electric Tankless Water Heaters

  • An electric on-demand system is easier and less expensive to install than a gas unit.
  • Electric units are about a third the size of a gas system. 
  • Because electric systems are less complex and much smaller, they can be installed in many out-of-the way areas, such as closets.
  • An electric tankless unit doesn't require ventilation since there's no gas combustion taking place. This allows for more flexibility on where it can be installed.
  • If a power upgrade to the home's electrical is  not  necessary, the installation of an electric tankless is not only easy, its also inexpensive.

It's critically important that both gas and electric tankless water heaters are installed correctly to provide safe operations, as well as to achieve the best results possible. We recommend hiring a qualified professional to install your unit. 

Operating Expenses painted onto road

Operating Expenses for a Tankless Water Heater

Gas Tankless Water Heaters

  • As a general rule, you can expect a gas tankless water heater to achieve an efficiency rating of 80 to 85%.
  • Fuel prices fluctuate, but currently the price of gas is lower than electricity. Because of this, gas tankless units are less expensive to operate.
  • One thing to keep in mind: As gas fuel prices rise, the price of operating a gas system will undoubtedly increase as well. An electric system could easily become more economical to operate because of their higher efficiency rating.

Electric Tankless Water Heaters

  • Efficiency ratings of 98 to 99% are consistently reached with electric tankless water heaters.
  • In many areas, gas prices far exceed the price of electricity. When this is the situation, an electric unit is more economical to operate.
  • The impressive energy efficiency of electric tankless water heaters will offset the higher fuel prices.
Rheem RTGH-95DVLN 9.5 GPM Indoor Direct Vent Tankless Natural Gas Water Heater

Rheem Gas Tankless Heaters

The Rheem RTGH-95DVLN is capable of delivering 9.5 gpm of piping hot water. This condensing indoor gas tankless water heater doesn't require expensive venting and operates with 94% energy efficiency.

Requirements file in filing cabinet

Hot Water Requirements

Gas Tankless Water Heaters

  • A gas tankless water heater can deliver a flow rate over 10 GPM.
  • If your household hot water demand is high, a gas system may be better suited to meet your needs.

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Electric Tankless Water Heaters

  • Electric tankless systems are capable of delivering up to 8 GPM of hot water.
  • The incoming water temperature impacts the GPM performance of both electric and gas systems.
  • A tankless water heater's capacity is measured by the amount of hot water (flow rate) it can deliver (GPM = Gallons Per Minute). Learn how to determine your household hot water needs. 
  • General rule of thumb: 8 GPM should meet the hot water demands for an average family.
  • A tankless water heater will have a lower GPM in a cooler region because the incoming water will be colder. The tankless will be required to work harder to heat the water to the desired temperature.
  • In colder regions, a gas tankless water heater generally wins the gas vs electric debate.

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Maintenance Requirements

Gas Tankless Water Heaters

  • Because gas systems are more complex, they require more maintenance than electric tankless water heaters.
  • licensed technician should inspect a gas system annually. He'll be checking that the unit is performing properly and the fuel is combusting safely.
  • Flushing the unit every 6 to 12 months is critical to prevent lime scale build-up.
  • pre-filter is highly recommend to prevent sediment from entering the tank for both gas and electric systems.
  • Many general maintenance tasks can be completed by the homeowner.
  • A gas tankless is more difficult to service because of the complex heat exchanger.

Electric Tankless Water Heaters

  • Electric tankless water heaters require very minimal maintenance.
  • pre-filter is recommended to prevent sediment, and in addition the inlet screen filter should be occasionally flushed.
  • The entire unit should be flushed annually.
Stiebel Eltron 24 Plus Tempra, Tankless Water Heater, White

Stiebel Eltron Electric Tankless Heaters

Stiebel Eltron manufacturers high quality electric tankless water heaters in six different sizes. You can select their Plus model with advanced flow control, or the Trend with a few less bells and whistles.

Man press "warranty" button

Service Life and Warranty

Gas Tankless Water Heaters

  • Gas systems are designed to last up to 20-years. However, regular maintenance plays a role in the actual service life.
  • The service life of a gas unit can be negatively impacted if maintenance is not routinely completed.
  • Warranties vary among manufacturers. Many offer a 10-year warranty for the heat exchanger, 5-years for other parts, and 1-year for labor.
  • Many manufacturers require professional installation for the warranty to be valid.

Electric Tankless Water Heaters

  • Because of the simplistic design of an electric tankless water heater, these units often exceed a 20-year service life.
  • Some manufacturers offer lifetime warranties, and others cover parts for 5-years and labor for 1-year.
  • Electric systems are easier to troubleshoot, diagnose and repair when problems occur.

Tankless water heaters are designed for a long service life, typically 20-years. Without a tank that leaks over time, every component on an on-demand water heating system can be repaired or replaced.


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Factors That Impact Service Life
  • Maintenance - Regular maintenance is critical to keeping your tankless healthy and helping it live a long life. 
  • Hard Water -  A whole house water softener can treat the water before it enters the tankless system. This helps minimize lime scale build-up, especially if you live in an area with hard water. More frequent flushing can also prevent lime scale build-up.
  • Acidic Water - In most cases the acidity of the water is already treated before it enters the tankless. But if the water is too acidic, it's not only unhealthy, it's also hard on your household plumbing. Acidic water breaks down the heat exchanger on your tankless, as well as the plumbing within the unit. Pay particular attention to the acidic level of the incoming water during new home construction and take appropriate steps to resolve the issue.
  • Installation - Many manufacturers will not validate their warranties if the tankless system was not professionally installed. Correct installation is critical to getting the best results from your tankless water heater. 

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Individual Preference

Gas Tankless Water Heaters

  • Gas tankless systems can be a good choice if you're looking to improve the energy efficiency of a tank-style water heater.
  • Some homeowners worry about the safety of using gas apliances within their homes and feel more comfortable using electricity.
  • For homes that have very high hot water needs, gas units have models that offer higher GPM options.

Electric Tankless Water Heater

  • Many homeowners are uncomfortable using natural gas or propane in the event of a natural disaster.
  • Electric systems are easier to troubleshoot, diagnose and repair when problems occur.
  • Electric units are very eco-friendly. They are extremely energy efficient, do not use fossil fuels or release greenhouse gasses.
Rinnai RLX Series HE+ Tankless Hot Water Heater: Indoor Installation

Rinnai Gas Tankless Heaters

The Rinnai RLX94IN is a high efficiency indoor gas tankless water heater capable of delivering up to 9.4 gallons of hot water every minute! This heater is part of Rinnai's Luxury Series, and it comes with recirculation technology which reduces the wait for hot water by adapting to your hot water needs.  

String of electric light bulbs

Fuel Source Considerations

Gas Tankless Water Heaters

  • At present time, gas prices are lower than electricity prices, although this may not be the case in all areas since fuel prices fluctuate from region-to-region.
  • Most economists agree that future gas prices will most likely increase.

Electric Tankless Water Heaters

  • Electricity prices are less volatile than gas, therefore, there are less price fluctuations.
  • Electric tankless water heaters use a substantial amount of electricity. In many cases, homeowners will need to upgrade their electrical power in order to accommodate the energy demands needed to operate the unit.
Rinnai RL Series HE+ Tankless Hot Water Heater: Outdoor Installation

Rinnai High Efficiency Gas Tankless Heaters

The Rinnai RL Series HE+ is not only a high efficiency gas tankless water heater, but its designed to operate outside! Outside installation eliminates the need for venting and simplifies installation. This unit can deliver up to 9.4 gallons of hot water a minute and also includes Rinnai's recirculating technology which reduces the wait time for hot water by adapting to your usage patterns. 

Green house in grass

Environmental Impact of Tankless Water Heaters

Gas Tankless Water Heaters

  • Gas fueled tankless water heaters out perform tank-style water heaters when it comes to energy efficiency. In most cases they achieve mid-80% ratings.
  • Greenhouse gases are emitted into the atmosphere with gas tankless systems.

Electric Tankless Water Heaters

  • Electric systems frequently achieve 98 to 99% energy efficiency ratings!
  • Since electric units don't burn fossil fuels or release greenhouse gasses, they are very eco-friendly.

Consult with a Local Plumber

Get FREE Quotes Today

Final Thoughts on Whether to Choose a Gas vs Electric Tankless Water Heater

Unfortunately, there isn't a one-size-fits all when it comes to the gas vs electric tankless water heater debate. Each situation is different and each homeowner has specific needs.

Many professionals prefer electric tankless water heaters because of their simplistic design, easy installation, less expensive purchase price, and minimal maintenance.
Read our pick of the best electric tankless water heater on the market

Other professionals feel that a  gas tankless water heater is the way to go. They tend to be better equipped in meeting a household with higher than average hot water needs.
Read our pick of the best tankless gas water heater

However, they also have a complex heat exchanger that requires annual professional maintenance. In addition, they can be difficult to troubleshoot, and sometimes are challenging to service in the field. 

In most cases the decision between gas vs electric may simply be the type of fuel your previous water heater used. If your home can handle the electrical demands, switching from a gas heater to electric is relatively easy.

If you're upgrading from a tank-style water heater, even if you're staying with your current fuel source, it may be necessary to make costly power upgrades and modifications to your home.


Consult with a Local Plumber

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