The standard water heater storage tank heats up and stores gallons of hot water. But, it isn’t as efficient as the best tankless water heater, which increases energy efficiency by 24-34 percent according to the U.S. Department of Energy.
Tankless water heaters don’t need to store water making them significantly smaller than a traditional storage tank. Instead, they heat water instantly as it enters the unit for a limitless supply of hot water. Read on to find out how a tankless water heater works and why the ones below made our list of best in class.
- BEST OVERALL: Rinnai RU199iN Tankless Water Heater
- BEST BUDGET: Rheem 240V Tankless Water Heater
- BEST ELECTRIC: Stiebel Eltron Tempra 36 Plus Tankless Water Heater
- BEST PORTABLE: Hike Crew Portable Propane Water Heater
- BEST POINT OF USE: EcoTouch Point-Of-Use Tankless Water Heater
- BEST WHOLE-HOUSE: Rinnai V94iN High-Efficiency Tankless Water Heater
Before You Buy a Tankless Water Heater
Tankless water heaters are growing in popularity for the average homeowner; however, there are a few considerations to take into account before purchasing.
Tankless heaters will cost more initially, between $1,000 to $3,000 before installation. With installation costs included, the price rises to $2,000 to $6,000 nationwide on average, while storage-tank models only cost between $1,000 to $2,000 with installation.
Another thing to consider is the hot water requirements of the household. If multiple showers, a clothes washer, and a dishwasher are all expected to operate simultaneously, a tankless model may have trouble providing enough hot water to all locations at once. Bigger families with high demands may benefit from a large, traditional model capable of keeping up with their needs as a tankless unit requiring that type of power may be out of the price range.
Installation is another consideration. If your home has a storage-tank heater, expect that the electrical wiring, gas piping, water piping, and ventilation (for gas models) will likely need to be reconfigured to fit the much smaller, wall-mounted tankless unit. The installation will typically take longer and cost more.
If these seem like reasonable expectations and limits based on your household and what you are looking for, read on to determine the best tankless water heater for you.
How We Chose the Best Tankless Water Heaters
We researched the most sought-after tankless water heaters in their respective categories and discovered that the best models are determined by their fuel type, flow rate, power input, energy efficiency, and other special features included by top brands.
While searching for the best models available, the most popular type among users were the electric tankless water heaters for their ample energy efficiency and ease of use. While not as popular, the natural gas and propane options are viable options for either whole-house use or portability on camping trips. The top models have ample flow rates of 1 to 11 GPM and power inputs ranging from 30,500 to 199,000 BTUs, varying based on how much hot water you need and the desired energy efficiency.
The above options can provide water for anywhere between 1 and two people to an entire household. These units have 81 to 99 percent energy efficiency ratings, with select options coming with Energy Star certifications. As for added special features, some of these picks have easy-to-use dials or touch screens, self-modulation controls, safety shutoff features, Wi-Fi compatibility, and near-silent operating volumes.
Our Top Picks
Check out the best tankless water heaters on the market today, chosen for the quality of features described above, as well as price, effectiveness, and manufacturer reputation.
The capabilities of the Rinnai RU199iN Tankless Water Heater are impressive, with an 11 GPM max flow rate that can produce hot water for up to seven different fixtures. The 199,000 BTU maximum is more than enough for a standard mixture of teens and adults in a single household to go through their morning routines without a drop in water temperature.
Despite it being a natural gas system, the unit’s efficiency rating sits comfortably between 93 and 96 percent and is Energy Star-certified. This is mostly due to the condensing feature that allows the water heater to remove as much heat from the exhaust as possible before releasing it through the ventilation.
- Fuel Type: Natural Gas
- Flow Rate: 11 GPM
- Power Input: 199,000 BTUs
- Produces water for up to 7 fixtures
- Very energy efficient water heater; Energy Star-certified
- Wall-mounted option
- Wi-Fi ready
Get the Rinnai water heater on Amazon or at Lowe’s.
This budget tankless water heater boasts an impressive 99 percent efficiency rating. This means the energy you are paying for is used almost entirely for your water, instead of losing energy through ventilation with gas models.
The Rheem 240V Tankless Water Heater won’t be of much use to a large household with many different fixtures in use simultaneously. However, with a 4 GPM max flow rate and a 45,000 BTU maximum, it is more than enough for an apartment or cottage with one or two occupants. The low price of the unit and the lower price of electric tankless water heaters in general when compared with gas, make this a great value selection.
- Fuel Type: Electric
- Flow Rate: 4 GPM
- Power Input: 45,000 BTUs
- 99 percent efficiency rating
- Suitable for homes with 1-2 people
- Easy-to-use dial
- Not Energy Star-certified
- Not suitable for large households
Get the Rheem RTEX-13 water heater on Amazon or at The Home Depot.
The Stiebel Eltron Tempra 36 Plus Tankless Water Heater is high efficiency at its best with a 99 percent efficiency rating, silent operation, and an impressive max flow rate of 7.5 GPM and 92,000 BTUs in warmer climates. Like all electric tankless water heaters, this model offers immediate cost savings on the unit price and the installation costs.
Stiebel’s Advanced Flow Control feature keeps water consistently hot during ongoing use so that showers don’t cool down or fluctuate in temperature. A bold digital display shows accumulated cost-savings so you can see how much you have saved by switching out an inefficient model.
- Fuel Type: Electric
- Flow Rate: 7.5 GPM
- Power Input: 92,000 BTUs
- 99 percent efficiency rating
- Silent operation volume
- Stiebel’s Advanced Flow Control feature included
- Easy-to-use digital display
- May not be compatible with some water fixtures
Get the Stiebel water heater on Amazon, The Home Depot, and Lowe’s.
The Hike Crew Portable Propane Water Heater combines the luxuries of home with the ruggedness of camping. The built-in pump is placed into a water source and attached to a propane tank to provide ongoing hot water for camp showers, washing dishes, and rinsing equipment.
A handle at the top of the water heater acts as a carrying case system. The portable water heater comes with a hand faucet and shower head attachment to supply hot water anywhere, and it connects to AC/DC power. The little unit includes a safety shutoff to turn the burner off when it reaches 125 degrees Fahrenheit or when available water runs out. This portable unit only operates at 1 GPM with 42,000 BTUs, making it ideal as a mobile unit, but not great for any other applications.
- Fuel Type: Propane
- Flow Rate: 1 GPM
- Power Input: 42,000 BTUs
- Built-in pump and carrying handle
- Hand faucet and shower head attachment included
- Connects to AC/DC power
- Safety shutoff feature
- Suitable for small appliances and light-duty use only
Get the Hike Crew water heater on Amazon.
The low 1.5 GPM and 30,500 BTU would be detrimental for a household tankless water heater, but as a point-of-use unit, the power output is more than enough for a single bathroom or kitchen. The 99 percent efficiency rating of this unit means almost no heat is lost before the water reaches your shower, faucet, or any other fixture.
The small size and sleek, touch-screen design fit comfortably into the modern home style, making your appliance a part of the decor instead of merely taking up space. The self-modulation controls monitor the water temperature to avoid fluctuations between hot and cold while the fixture is in use. This model won’t be heating your entire home, but it could be a great hybrid choice for a primary bathroom.
- Fuel Type: Electric
- Flow Rate: 1.5 GPM
- Power Input: 30,500 BTUs
- Suitable for use in a single bathroom or kitchen
- 99 percent efficiency rating
- Touch-screen included
- Self-modulation controls
- Not suitable for use as a whole-house tankless water heater
Get the EchoTouch water heater on Amazon.
An endless supply of hot water for the whole house awaits with the Rinnai V94iN Natural Gas Tankless Water Heater. Rinnai boasts that the 9.4 GPM flow rate and 199,000 BTU maximum provide hot water to up to six fixtures at once, allowing for a quick and argument-free morning when everyone needs to shower and get out the door.
The natural gas tankless water heater is non-condensing, so its energy rating isn’t as high as the electric models or even the condensing gas types, with only 81-82 percent efficiency. However, because this tankless gas water heater is non-condensing, it is also more affordable, making it a good option for a big family in a long-term home. While the savings may not pile up, they will still be noticeable.
- Fuel Type: Natural Gas
- Flow Rate: 9.4 GPM
- Power Input: 199,000 BTUs
- Provides water to 6 fixtures at once
- Non-condensing model
- Affordable price point
- Lower efficiency rating than comparable options
Get the Rinnai water heater on Overstock.
Recap of Recommendations
BEST OVERALL: Rinnai RU199iN Tankless Water Heater
BEST BUDGET: Rheem 240V Tankless Water Heater
BEST ELECTRIC: Stiebel Eltron Tempra 36 Plus Tankless Water Heater
BEST PORTABLE: Hike Crew Portable Propane Water Heater
BEST POINT OF USE: EcoTouch Point-Of-Use Tankless Water Heater
BEST WHOLE-HOUSE: Rinnai V94iN High-Efficiency Tankless Water Heater
What to Consider When Choosing the Best Tankless Water Heater
Immediate access to hot water and reduced energy consumption throughout the year are just a few of the benefits of a tankless water heater. To choose a tankless water heater based on features that will be most beneficial to your home, keep in mind the type, flow rate, power consumption, and more.
There are three main types of fuel for a tankless water heater: natural gas, propane, and electricity. Gas models operate at a higher power output than electrical models, allowing both propane and natural gas to heat more water to an ideal temperature for a lower cost.
The downside to this is that the initial cost of a gas tankless water heater is about $1,000 more than an electric heater. The installation is more complex, provided that the home has an electrical system able to support the high energy needs of an electric heater.
- Natural gas costs less than propane and electricity and has the added convenience of direct piping into many homes. This style is best for a long-term investment, as the lower cost of the natural gas will eventually cover the money spent on the unit. Natural gas is also a good choice for high-demand households. However, natural gas is not easily stored, and these models are poor for mobile use in an RV or at a campsite. Also, keep in mind that your home may not have natural gas piped in. If this is the case, running a line into your home will add more cost to the installation.
- Propane gas is the most expensive of the fuel choices, which often cannot be piped into a home. It is more likely you will need to purchase a fuel tank for the water heater, taking up space saved by the move to tankless style. These water heaters provide the best energy output, with propane even providing more energy than natural gas. Propane tankless water heaters are great for use in a recreational vehicle due to the portability of liquid propane.
- Electric tankless water heaters are the cheapest choice for initial purchase and installation, but high electrical needs and lower overall power output can even the cost in a hurry. One important thing to note about electrical models is that their efficiency rating is about 10 percent higher than gas models. Therefore, an electrical model can save more energy overall than a gas model. However, it may cost more, depending on the current price of electricity versus gas in your local area. Electrical models also have high power requirements that an older home might not meet. If the current electrical system does not meet the manufacturer’s specifications, a different style may be needed, or a costly upgrade to the electrical system will be necessary.
Flow Rate (GPM)
The tankless water heater’s flow rate determines the maximum flow of hot water that the tank is capable of producing. Flow rate is measured in gallons per minute, or GPM, with each fixture (tub, shower, sink, etc.) requiring a certain portion of this flow. For example, a tub will use 4 GPM, a shower will use 3 GPM, and a kitchen sink will use 1.5 GPM on average. If they are all in use at once, the tankless water heater will be required to provide 8.5 gallons of hot water per minute.
Homes with more than four adults should consider tankless water heaters with a flow rate of 7.5 to 8 GPM, while those with less than four adults should be fine with a flow rate of 3 to 5 GPM.
When determining the flow rate, consider the amount of water used all at once in the household. If only one shower, sink faucet, clothes washer, etc., is ever in use at one time, a lower flow rate is adequate. However, if multiple showers, a dishwasher, a clothes washer, and a couple of sinks run simultaneously, a lower flow rate cannot provide hot water to all appliances at once.
Whole-house tankless water heaters are larger and more powerful than point-of-use tankless water heaters. These models provide sufficient hot water to an entire house and have much higher flow rates and power inputs. Point-of-use designs are intended to be used on a single fixture, so only require enough flow and power input to heat one shower or one sink.
These are great if you can afford multiple tankless water heaters or plan to use it in conjunction with a traditional tank model, where the point-of-use water heater is only used for a primary shower that would otherwise drain the tank.
Power Input (BTU)
The energy required to heat water to your desired temperature is called the power input, which is measured in British thermal units, or BTUs. A BTU refers to the amount of energy needed to raise the temperature of one pound of water by one degree Fahrenheit.
To decide on the necessary power input for your tankless water heater, consider a simple situation. Assuming the water coming into your home is 40 degrees Fahrenheit, and you would like your shower to produce water at a temperature of 120 degrees Fahrenheit, then the tankless water heater would need to increase the temperature by 80 degrees. To do so, it would need 667 BTUs per gallon (assuming a flow rate of almost zero).
A shower operates at 2.5 GPM or 150 gallons per hour. To heat 150 gallons of 40-degree Fahrenheit water per hour to a temperature of 120 degrees, a tankless water heater would need to produce 100,000 BTUs per hour, assuming a 100 percent efficiency for a single shower. If the efficiency levels drop or another fixture is used at the same time, the BTU requirements go up.
The basic formula is:
(500 x GPM x Temperature Change = Required Power Input in BTU per Hour)
Where 500 (or 499.8 rounded up) is the weight of a gallon of water (8.33 lbs) multiplied by 60 minutes.
Use this as a starting point to determine the BTUs required for your home and geographic location to heat incoming water to the desired temperature.
Gas tankless water heaters burn their fuel and transfer the energy from the burning fuel into the water to raise its temperature. However, when fuel burns, it produces exhaust that must be vented outside of the home, keeping a safe distance from doors, windows, air conditioning units, and any other areas that see regular use by people or pets.
This ventilation piping will need to be installed with the tankless water heater and could drastically increase the cost depending on the heater’s location and the requirements to run the ventilation from the heater to a safe location outside. Depending on the layout of the home, this could mean direct ventilation through the basement wall or chimney ventilation that runs vertically through your house and emerges from the roof.
Condensing vs. Non-condensing
Steam or water vapor is a byproduct of the fuel burning in a tankless water heater. The steam releases through ventilation ducts or piping to the outside. The difference between condensing and non-condensing is when the steam is released.
- Non-condensing tankless water heaters will immediately vent the steam, meaning that ventilation materials will need to be able to withstand high temperatures as hot steam travels through the ventilation channels. These premium materials come at a cost, so installation prices can be higher. The heat lost through the immediate ventilation of this steam also results in an efficiency rating of about 80-85 percent. However, non-condensing water heaters will be cheaper to purchase.
- Condensing tankless water heaters have a condensing unit that captures and reuses the residual exhaust heat before releasing a much cooler exhaust through ventilation channels to the outside. This style costs more money, but saves on ventilation material and produces about 98 percent efficiency.
The Advantages of Owning a Tankless Water Heater
The advantages of a tankless model are numerous, which is why they often have a higher initial price tag. However, that upfront cost can come back to you in the form of government rebates and savings of between 24-34 percent over the storage-tank water heater.
The innovative tankless heaters also take up significantly less space than a traditional water heater, because they don’t need to store gallons of water in advance to provide adequate hot water to your home. The nearly instant heating process lets you enjoy all of the amenities your home has to offer without running out in the shower or wash cycle.
- Tankless water heaters take up less space than storage-tank water heaters.
- The tankless economic models reduce wasted energy and save money on bills.
- Tankless heaters provide instant access to hot water without worrying about running out when you need to hop in the shower.
Don’t buy before reviewing the answers to a few common tankless water heater questions below.
Q: How does a tankless water heater work?
Tankless water heaters work by using a heating element (heat exchanger) to heat the cold water that enters the unit. A flow-activated switch turns the heating element on as water is drawn through the unit by the opening of a faucet in the home. The water flows through a series of loops within the unit, ensuring that it has enough time to reach optimal temperatures before exiting at the required hot water source.
Q: What size tankless water heater do I need?
The size of the tankless water heater required depends on the number of occupants in the home, the usage requirements, the size of the house, and the average temperatures of the geographic area, as lower average temperatures will require an increased output to heat water to the optimal temperature. Homes with one to three occupants are looking for 3 to 5 GPM water heaters. Homes with four or more people may require units that are capable of managing up to 8 or 9 GPM.
Q: How do you flush a tankless water heater?
The general procedure requires you to shut off the flow of electricity, water, and gas (if it is a gas unit) to the tankless water heater. Once done, connect two hoses to the cold- and hot-water isolation valves. The hose connected to the hot water should not be connected to anything else, while the hose connected to the cold water should be attached to a pump.
Submerge the pump in a 5-gallon bucket filled with about 4 gallons of clean white vinegar and place the open end of the hot-water hose in the bucket as well. Open the isolation valves and turn the pump on, allowing it to circulate vinegar through the tankless water heater for 45 minutes to an hour. After this, turn off the pump and empty the bucket. Turn on the cold water to the unit, allowing the water to flow through and flush out the vinegar for five minutes.
Once completed, turn off the valves, disconnect the hoses and return the tankless water heater to functionality by restoring water, gas (if it is a gas heater), and electricity to the unit. Test to ensure it is working correctly. If not, check your connection and ensure all power and fuel sources are properly restored. If a problem is present, consider contacting a local plumber for help.
Why Trust Bob Vila
Bob Vila has been America’s Handyman since 1979. As the host of beloved and groundbreaking TV series, including “This Old House” and “Bob Vila’s Home Again,” he popularized and became synonymous with “do-it-yourself” home improvement.
Over the course of his decades-long career, Bob Vila has helped millions of people build, renovate, repair, and live better each day—a tradition that continues today with expert yet accessible home advice. The Bob Vila team distills need-to-know information into project tutorials, maintenance guides, tool 101s, and more. These home and garden experts then thoroughly research, vet, and recommend products that support homeowners, renters, DIYers, and professionals in their to-do lists.