Tankless Water Heater Types: Complete Comparison

$2,500 to $5,000 installed

Gas whole-house tankless heaters are the dominant choice for families replacing a traditional tank heater. They deliver 7 to 11 gallons per minute (GPM), which is enough to run two showers and a dishwasher simultaneously. The unit itself costs $1,000 to $2,000 depending on brand and BTU output. Installation is more expensive than the unit price suggests because most homes need two upgrades: the gas line must be upsized from 1/2 inch to 3/4 inch pipe ($500 to $1,000), and dedicated stainless-lined venting must be run to the exterior ($300 to $600). These two items alone can add $800 to $1,600 to the total bill. Leading brands in this category include Rinnai, Navien, Noritz, and Rheem. Rinnai and Navien dominate the market. Expect BTU ratings of 150,000 to 200,000 BTU for cold-climate homes needing the highest flow rates.

$1,000 to $2,500 installed

Electric whole-house tankless heaters cost less upfront and are simpler to install since they require no venting. However, they have a significant limitation: flow rate. Electric units typically deliver 3 to 5 GPM, which is adequate for a single shower but struggles with simultaneous fixtures in cold climates. The reason is physics. Electric elements heat water more slowly than a high-BTU gas burner, and cold incoming water requires more heat energy to reach the target temperature. In Florida or Texas, where incoming water is 65 to 70 degrees, an electric unit performs well. In Minnesota or Maine, where incoming water is 40 degrees or colder, the same unit may only produce 2 to 3 GPM. There is also an electrical panel consideration. Most whole-house electric tankless units draw 100 to 200 amps. If your panel lacks available capacity, a panel upgrade runs $500 to $2,000. Units from Stiebel Eltron, EcoSmart, and Rheem are commonly installed.

$200 to $700 installed

Point-of-use tankless heaters serve a single fixture, typically installed under a kitchen sink, in a bathroom vanity cabinet, or near an outdoor shower. They heat only the water for that one outlet, eliminating the wait time for hot water to travel from a distant central heater. Units are small (about the size of a shoebox), draw 3,500 to 12,000 watts, and cost $100 to $400 for the unit. Installation is straightforward and does not require venting or gas line work. A standard 120V outlet is sufficient for lower-flow units. Higher-capacity units need a 240V dedicated circuit. Point-of-use units are a good solution for a guest bathroom that gets infrequent use, a garage or workshop sink where running hot water lines would be expensive, or any fixture located far from the main water heater. They do not replace a whole-house unit but work well as supplements to one.

$3,000 to $5,500 installed

Condensing tankless heaters add a secondary heat exchanger that captures heat from exhaust gases before they leave the unit. A standard non-condensing unit vents exhaust at 300 to 350 degrees F, wasting that heat. A condensing unit cools the exhaust to 100 to 120 degrees F, extracting that remaining heat and achieving energy efficiency ratings of 90 to 98 percent (compared to 80 to 85 percent for non-condensing units). The practical benefit is about 10 to 20 percent lower gas bills compared to a standard gas tankless. The tradeoff is cost. Condensing units are $200 to $600 more expensive as a unit. Installation is slightly easier in one respect: the lower exhaust temperature allows PVC pipe to be used for venting ($50 to $100) instead of the expensive stainless-lined metal duct required by non-condensing units ($300 to $600). If you are planning to stay in the home long-term, the efficiency gain can offset the higher unit cost within 5 to 8 years. Navien and Rinnai both offer strong condensing models.

$2,500 to $4,500 installed

Non-condensing gas tankless heaters are the original and most widely installed type. They have a single heat exchanger and vent hot exhaust gases to the exterior at high temperatures. Efficiency is typically 80 to 85 percent, which is still significantly better than a tank heater (60 to 70 percent). The higher exhaust temperature requires stainless-lined Category III or Category IV venting material, which is more expensive than the PVC used on condensing units. Non-condensing units are generally $200 to $500 less expensive than comparable condensing models and have a simpler mechanical design with fewer components that can fail. For a homeowner who does not plan to stay in the property for 10 or more years, a non-condensing unit may offer a better return on investment despite slightly higher operating costs. Rinnai, Noritz, and Rheem all make reliable non-condensing units in the 150,000 to 199,000 BTU range suitable for whole-house use.

$2,500 to $5,000 installed

Propane tankless heaters serve homes that lack natural gas utility service. Performance is identical to natural gas models; most manufacturers sell the same heater in both natural gas and propane configurations with a conversion kit. The unit cost is the same. Where the ongoing economics differ is fuel cost. Propane is significantly more expensive per BTU than natural gas in most US regions, typically 2 to 3 times the cost. A natural gas tankless heater might cost $20 to $30 per month in fuel. The same heater running on propane could cost $50 to $80 per month. Homeowners should factor this into the long-term comparison against electric alternatives. If your home has no gas service and is not near a gas main, a heat pump water heater (tank-based) is often a better choice than a propane tankless unit due to lower operating costs. However, if you already have a propane system for your furnace or stove, adding a propane tankless heater to the existing tank and lines is a practical choice.