Tankless water heaters : electric or gas?


Tankless water heaters : electric or gas?

Asked by Michelle Allman, North Hollywood, CA

I want to put in a tankless water heater. I would like to know the pros and cons of going electric vs. gas.

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David Bergman's picture

Tankless water heaters are usually more energy efficient than standard tanks because they heat water only when it's needed, instead of keeping it always hot.

We recently installed a tankless water heater in a residential loft and were faced with a couple of trade-offs.

  • A gas-fired unit may cost less to operate, depending on your local utilities (check rates on your utility bill).
  • On the other hand, while electricity may be more expensive and more polluting these days (since so much of it is coal generated), in the future-hopefully-we will be using more renewable and cleaner sources.
  • You can find information about how your state's electricity is generated at the Energy Information Administration's website.


On the installation side of things, a gas unit requires exterior ventilation as well as a supply of fresh air.

  • Since you're in Southern California, you may be able to install the unit on an outdoor wall and vent it easily. (Make sure you check your local building codes and the manufacturer's requirements.)
  • In our NYC loft, we had to run 20 feet of stainless steel duct. But that was less expensive than bringing up a new electrical supply from the basement, and electric tankless units require a very large feed because it takes a lot of current to heat the water quickly.

Fewer choices and smaller capacity

You'll also find fewer choices and generally smaller capacity in electric units.

  • That could lead you to use several smaller units instead of one larger one, which would increase your installation costs.
  • You'd have the advantage, however, of units placed closer to where you use the hot water, so it would get there faster and with less heat loss.

For more information:

Check GreenHomeGuide's tankless tips articles "9 Best Practices for Choosing and Installing a Tankless Water Heater" and "Get Optimal Performance from a Tankless Water Heater."