None of the heater types can be considered better than the other – some projects will favor gas and others will favor electricity.

Regardless of the energy source, tankless water heaters offer several performance features that make them the preferred option in many US households.

Instant Hot WaterDispenser

The hot water tank is the largest piece of equipment in conventional heating installations, and this can be an issue when space is a limitation. Thus, tankless water heaters are common in single-person apartments, tiny houses, and other dwellings of similar size.

Instant hot waterheater under sink

Fluctuating temperatures are normally an issue when a central instantaneous heater is subject to a variable load. When various tankless heaters are used independently, hot water temperature tends to be more consistent because plumbing fixtures don’t affect each other.

Instant hot waterCountertop

Instantaneous hot water systems offer solid performance, but they are not free from limitations. As with any engineering decision, there are pros and cons to consider before installation.

There are both electric and gas-fired tankless heaters, and although their main operating principle is the same, there are some key differences between both types:

Instantaneous hot water systems offer the advantages of a compact size and higher energy efficiency than conventional storage heaters, while having a longer service life. However, they give up on the ability to store hot water for later use, and temperatures can fluctuate when hot water demand changes drastically.

Another significant advantage of tankless heaters is their long service life: they typically last for 20 years or more, while heat pumps and conventional storage heaters normally last for 10 to 15 years. Only solar heaters offer a service life comparable to that of tankless heaters.

Instant Hot WaterCamping

Although it is not common, there are cases where electric tankless heaters can be more expensive to operate than their storage-based counterparts; it happens if hourly electricity rates are applied and if the heater is used extensively precisely when peak rates are being charged.

Instant hot waterPropane

Regardless of the heater type chosen, both electric and gas-fired models are available. On average, a home with a tankless heater spends $100 less on hot water each year, but this does not mean storage heaters must be overlooked. Each alternative has advantages and disadvantages.

Another significant advantage of instantaneous heaters is that, since no storage tank is used, there is flexibility with regards to how the installation is configured:

As stated by the Department of Energy, the average US household saves $100 per year with a tankless heater, but this rises to $300 on average with a heat pump. In addition, heat pumps can use hot water tanks – they offer top efficiency without giving up on the convenience of energy storage.

The only limitation of heat pumps is that they are basically refrigerators operating in inverse, so their response is slower than that of tankless heaters. They also have a higher upfront cost, but are generally the most energy efficient option available. There are now heat pump models that can use geothermal energy to boost their efficiency, providing even greater savings for their owner.

The size advantage is especially true for point-of-use heaters, which can be easily installed on a wall next to a sink, shower or faucet.

Pertains to newly produced gas appliance connectors, constructed entirely of new unused parts and materials, having nominal internal diameters of 1/4, 3/8, 1/2, 5/8, 3/4, and 1 in, and having fittings at both ends provided with taper pipe threads for connection to a gas appliance and to house piping.

To determine the best water heater for your application, we recommend you get in touch with a qualified engineering firm. They can help you select the option that better matches your project conditions and needs, while optimizing the total cost of ownership.

Instant hot waterheater

Running on electricity, these heaters tend to have a higher operating cost than their gas-fired counterparts, but their upfront cost is reduced – electrical installations are easier to upgrade than gas lines, and these heaters don’t require a chimney.

Conventional heaters have a hot water reservoir, making it easier for the system to supply water at a consistent temperature. On the other hand, tankless heaters must raise water temperature to a specific value as it passes through, and they may have trouble responding to sudden changes in demand:

Electric storage heaters can take advantage of hourly electricity rates, maximizing consumption when energy is cheap and only using stored hot water when rates are high. This is not possible with a tankless heater; if hot water is needed during peak demand, there is no option other than consuming expensive electricity.

Storage water heaters constantly consume energy just to keep the water in the tank at a desired temperature. This waste of energy is prevented with tankless heaters, and although their savings vary by project, they can exceed 30 percent in extreme cases.

Electric tankless heaters have a flowrate disadvantage with respect to gas-fired heaters: even the largest models are normally limited to values below 2 GPM. However, this can be compensated by simply installing more units in parallel. When upgrading existing hot water systems, electric tankless heaters tend to be the winning option due to the upfront cost advantage.

When site conditions are suitable for both options, the decision can be taken based on financial performance: which heater type provides the highest net savings with respect to the existing installation?

Assuming a project offers suitable conditions for both electric and gas-fired tankless heaters, the key factor that determines the best choice is operating cost. All heaters have an Energy Factor (EF), which is a measure of how effectively the unit uses the energy input. However, the heater with the highest EF will not necessarily be the cheapest to operate – it is also necessary to consider fuel cost.

Instant hot watersink

If the gas or electric utility must interrupt its service due to routine maintenance or an emergency, the affected customers will lack access to hot water until the heat source is restored. With storage heaters, it is possible to keep a tank full of hot water as backup.

These heaters normally offer a lower operating cost because they run on gas, and they can handle higher flowrates than electric heaters, generally up to 5 GPM on larger models. However, gas-fired instantaneous heaters often require an upgrade to the gas service entrance, increasing their upfront cost; and they also require a chimney to get rid of flue gases.

A tankless heater may seem expensive in terms of upfront cost, but consider it replaces two conventional heaters over its service life. You will be avoiding the cost of the replacement storage heater, as well as the associated labor cost.

Basically, the tankless heater provides hot water on demand, while the solar collector provides free heating and storage. When both heater types are combined, the result is a reliable supply of hot water.

In general, gas-fired tankless heaters are cost-effective if the existing gas installation is suitable for the unit and there is already a chimney in place. Otherwise, upfront cost of the associated gas installation and chimney can negate the benefits of the project.

Instant hot waterfor tea

Lacking a tank, instantaneous heaters are unable to store hot water for later use, and there are several scenarios where this can be an issue.

Using a single heater is the recommended choice when there is a consistent and predictable water heating load that will demand the unit’s full capacity. On the other hand, point-of-use heaters are the top choice when there are just a few spots with variable consumption, for example two bathrooms and a kitchen faucet in a small apartment.

Preface1 Scope2 Reference publications3 Definitions4 Construction5 Performance6 Manufacturing and production testsAnnex A (normative) - Items unique to the United StatesAnnex B (normative) - Items unique to CanadaAnnex C (informative) - Table of conversion factors

Since hot water is a basic need in buildings, especially in northern states such as New York, building owners must make sure they select the heater type that better suits their needs. In most cases, the two main options are:

The US Department of Energy has determined that water heating accounts for 14 to 18 percent of energy consumption in the average American home, which represents $400-$600 per year and makes it the second largest energy expense. Water heating expenses are strongly determined by three main factors: the type of heater, the energy source and consumption habits.