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Comparing tankless hot water systems

Last updated 11/8/2019

On-demand water heater systems can be customized to your property. The solution that’s best for your home or business depends on the existing systems in place, as well as your unique water heating needs.

First step: gas vs. electric

gas vs. electric

One clear way to break tankless water heaters into two categories is based on their fuel source: gas and electricity. Both types of heaters are more efficient than tank storage heaters and can save you money in the long run. Here are a couple of key points to remember when choosing between gas and electric tankless heaters:

  1. Fuel costs: electricity is more expensive now, but natural gas is expected to become the more expensive fuel in the future
  2. Efficiency: electric units are typically more efficient than gas units
  3. Size: for properties with large hot water loads, gas-powered tankless heaters will be more effective, as they heat water at a faster rate, especially in cold climates

There are many more factors to consider when choosing between a gas or electric tankless water heater, many of which depend on the specifics of your property. Further on in this piece, we’ll outline how you can compare water heaters by several individual metrics.

Another main division: point-of-use vs. whole-house

Aside from gas vs. electric, the other main way to think about separating types of tankless water heaters is their scope of use. There are two options when it comes to on-demand hot water scope: point-of-use and whole-house.

A point-of-use tankless hot water system is installed at the site of the hot water outlet. For example, you might install a point-of-use setup under a sink or near a washing machine. Whenever the connected appliance needs hot water, the tankless water heater nearby is activated and provides heated water. 

Whole-house tankless water heaters provide the same type of hot water distribution as a tank system: your whole property. Every time you use an appliance that requires hot water, that central whole-house heater activates and distributes heated water to the demanding appliance.

point of use vs. whole house

Metrics for comparing tankless hot water equipment

There are a few metrics to look at when comparing tankless water heaters: flow rate, efficiency, and whether the equipment is condensing or non-condensing.

Flow rate

A tankless water heater’s flow rate refers to how much water you can get from it at once. Flow rate is listed in gallons per minute (GPM) - thus, it is a measure of how many gallons of hot water it provides in a continuous minute. You’ll want to make sure that the flow rate of your tankless water heater exceeds the expected maximum demand of the appliances that will need hot water at the same time. Units usually provide between four and eight gallons per minute. You can figure out hour peak hot water demand by adding the flow rates for all of your appliances. Below, we’ve included a table with some common flow rates (in GPM) by appliance:

Appliance Standard flow rate
Bathroom sink 1.5 - 2.2 GPM
Kitchen sink 2.2 GPM
Shower 2.0 - 2.5 GPM
Bathtub 3.0 - 4.9 GPM


The efficiency of a tankless water heater refers to the percentage of energy input that is converted to heat. In general, tankless water heaters are more efficient than tank water heater systems, mainly due to standby heat losses in tank systems that occur when hot water sits unused in the tank for a long period of time. 

Efficiency is referred to as EF, which stands for Energy Factor, or UEF, the Uniform Energy Factor. EF is an older metric and is generally about two to three percent higher than UEF, which was implemented in 2017. Gas tankless water heaters are usually somewhere around 80 percent to 85 percent efficient, while electric models are usually between 95 percent and 99 percent efficient.

Gas units only: condensing vs. non-condensing

One factor that impacts the efficiency of gas units is whether your unit is condensing or non-condensing. A condensing tankless hot water unit use the heat from exhaust gases to pre-heat water in the system. This raises the efficiency of gas units closer to that of electric units. If you’re looking at a gas tankless water heater with an especially high EF, chances are it’s a condensing model.

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