electric vs gas tankless hot water heaters compared

Electric vs Gas Tankless Water Heater Costs, Features Compared

electric vs gas tankless water heater

This guide is for homeowners and property owners comparing an electric vs gas tankless water heater. Which is right for your application? It could be that both have their place in your home.

If you are mainly interested in an electric vs gas tankless water heater cost analysis, our Home Page is the best starting point.

Gas Hot Water Heater vs Electric vs Tankless

Here are ways that a tankless water heater differs from the average natural gas or electric storage/tank type water heater.

A tankless water heater, as the name implies, has no tank to hold many gallons of hot water whether you are using it or not. A tankless heater only heats water when a hot water faucet is turned on. It then immediately heats water and sends it through the water lines in your home, if it a whole-house water heater. A point of use model is mounted beneath or near the faucet or other outlet type, such as an appliance, it supplies water to.

Tankless water heaters are much more efficient than their storage tank counterparts when you compare them side by side, boasting between 90 and 99% efficiency compared to the 60 to 70% efficiency of the tank models. This is partly because there is no standby heat loss – energy loss from heated water cooling in a tank.

Tankless water heaters typically have longer warrantees (15+ years) and longer lifespans – up to 20 years with proper maintenance, which is minimal.

How to Get Faster Hot Water with a Recirculation Pump

An added feature that is more common on gas whole house tankless water heaters compared with electric is a recirculation pump. This will recirculate the water in one or more high-demand water lines inside your home back to the heater so that there is little or no delay in obtaining hot water when you open a faucet. This luxury comes at an extra cost, so its benefits should be weighed against its price. Some gas tankless water heaters have a built-in recirculation pump. An external pump and system can be added too.

Tankless water heaters may use either electric or gas (natural or propane) to heat the water. They can provide hot water for a single faucet or for an entire home.

Electric vs Gas Tankless Water Heater Comparison

The rest of this article will discuss the electric vs gas tankless water heater, some of the differences, as well as costs involved in purchasing and operating them.

Electric Tankless Hot Water HeaterElectric Tankless Water Heaters

This information will assist you in the electric vs gas tankless water heater comparison.

Sizes: Electric tankless water heaters are available in sizes ranging from 8 KW to 36 KW. The smallest are used to heat water for one individual faucet, while the largest will heat water for an entire home. The size you need will be determined by the flow rate – how much water you need at one time, and the temperature rise – the difference between water coming into your home and the temperature you want the hot water to be.

Depending on those factors, electric tankless water heaters come in capacities ranging from less than 1.0 gallons per minute (GPM) to about 8 GPM. Consult your local supplier for help determining the proper size for your home and family needs.

Cost of Electric Tankless Water Heaters

Cost – Purchasing: When comparing the initial purchase price, the electric vs gas tankless water heater cost will be less. Cost is primarily determined by size and quality of the unit. On average, the small units for individual faucets cost between $150 and $300 while the large units for an entire house cost between $350 and $1,000. Tankless installation costs can vary widely based on the model purchased, your home layout and its current electrical capabilities. For example, if a 240V line is readily available, installation will cost less than if a new circuit and line must be run.

Cost – Operating: When comparing the operating cost of the electric vs natural gas tankless water heater, the electric unit will run significantly higher than its gas counterpart because electricity is almost always more expensive than natural gas. Here’s the story in the tankless water heater gas vs electric cost debate: On average, your annual operating cost will be in the range of $500 per electric unit.

Pro’s and Con’s of Electric Tankless Hot Water Heaters


  • High Efficiency – some models claim up to 99% (Yes, it makes use of all/almost all the electric it takes in, but keep in mind that overall operating cost is higher)
  • Available for single faucet application – under a sink or behind a shower wall
  • Less initial cost to purchase
  • Requires little maintenance


  • Lower flow capacity –  maximum about 8 GPM (gallons per minute) only on larger models and when incoming water is relatively warm
  • Requires large electrical amperage – up to four 40W circuits for large whole-house models
  • May require expensive upgrade to existing electrical components inside the home
  • Cannot raise the water temperature as much as gas units

Gas Tankless Hot Water HeaterGas Tankless Water Heaters

OK, now here’s the other perspective comparing natural gas vs electric tankless water heater.

Sizes: Gas tankless water heaters are available in sizes ranging from 130K to 199K BTU, which will provide hot water ranging from 6 GPM to 11 GPM. Those delivering the higher rates of flow are usually condensing units, which have two heat exchangers rather than one as in the standard models, and have an efficiency rating of up to 97%. Consult your local supplier for help determining the right size for your home.

Cost of Gas Tankless Water Heaters

Cost – Purchasing: Depending on the size, quality, flow rate and efficiency rating, gas tankless water heaters will cost between $500 and $2,000.

Cost – Operating: When comparing operating cost, this is where the natural gas vs electric tankless water heater really shines. Though the efficiency rating of some electric units is actually higher than most gas units, the annual cost of operating a gas unit is much less because gas is less expensive than electricity. Figure yearly cost gas vs electric tankless water heater of around $200 per year for natural gas, $450 for propane – and they deliver much more hot water than electric units.

Pro’s and Con’s of Gas Tankless Hot Water Heaters


  • Higher flow rate – up to 11 GPM
  • Able to produce a larger temperature rise than electric units
  • Less expensive to operate than electric
  • Less retrofitting usually involved during installation than with electric units
  • Some models can be installed outdoors in milder climates, so there are lower installation costs because they don’t have to be vented


  • Initial cost is more than electric
  • Requires a vent to the outside; more expensive venting materials must be used for lower efficiency models
  • Requires a drain to the outside on high efficiency models to expel condensed water
  • Yearly maintenance is recommended

Tankless Water Heater Buying Tips

In the course of this article, we have used the terms, flow rate and temperature rise; these are critical when determining the right tankless water heater for your home.

Flow rate is based on your family’s use of water at any one time. Do you have multiple showers that are regularly used simultaneously? Is the clothes washer or dishwasher running at the same time? These are the kinds of factors that will determine the amount of flow rate you need in a tankless water heater.

Temperature rise is mainly determined by where you live. In the southern U.S., water may be coming into your home at 60 or even 70 degrees F. In states in the upper tiers of the U.S., water entering your home can be as cold as 35 to 40 degrees F. Your tankless water heater will need to raise that incoming cold water to the hot water temperature you prefer – probably between 115 and 120 degrees F. Knowing whether you need a water heater that can raise your water 40 degrees or 80 degrees is very important. Be sure to consult your local professional before purchasing your tankless water heater.


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