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The Complete Guide To Choosing A Tankless Water Heater

If you’ve never had a tankless water heater you’re in for a treat. 

Endless hot water, being environmentally savvy, and cost savings are just a few of the benefits you’re about to experience. 

But before you make your decision on a tankless water heater, there’s some important features you’ll want to explore.This guide covers many factors you need to think about when deciding on a tankless water heater.  

First, determine the hot water output that will be required of your tankless water heater.

Determine How Much Hot Water You Need

How much hot water does your home use at peak times? This is a critical question to answer when choosing a tankless water heater. 

Sinks, washing machines, and showers all demand hot water. The kind of tankless water heater you get is largely dependent on how many of these fixtures you use, what the flow rate is of each, and how many you would use at once in any given time of day. For example, maybe you have a household of 6 people, and have 3 showers running in the morning, along with 1 load of laundry. Find out the flow rate of your showers and laundry combined, and there you have your peak hot water demand. 

Simply put, if you have a high hot water demand, you’ll need a tankless water heater with enough power to match it. 

If you’d like to calculate your peak water demand, check out a recent article of ours to learn more. 

How much GPM and BTU do you need for your demand?

Two components play into your hot water flow rate from a tankless water heater: GPM and BTU. 

GPM (Gallons Per Minute) is the volume of hot water that your tankless water heater can output. If your house has a high hot water demand, then your tankless water heater will need a higher flow rate in GPM. Consequently, your tankless water heater will also need a higher BTU.

BTU (British Thermal Unit) is a measurement of your tankless water heater’s ability to heat water. The amount of BTU required to meet your home’s GPM requirement is determined by the temperature of the water going into your home and your peak hot water demand in GPM. The colder your groundwater, the more energy your tankless water heater will need to get the water to your desired temperature.

For a detailed calculation of the specs that your tankless unit will need, take a look at our explanation of GPM and BTU in our blog post “What Size Tankless Water Heater Do I need?”.

In some states, like Minnesota, the groundwater is cold. It averages 40 degrees Fahrenheit - so your tankless water heater will need a high BTU rating to bring that 40 degree Fahrenheit water up to 120 degrees Farhrenheit. If you live in a southern state, your tankless water heater won’t need to be as powerful.


Natural Gas, Propane, and Electric

There are three tankless water heater energy types: Natural gas, electric, and propane. 

The best option for you depends on what you’re buying the tankless water heater for.

Natural gas or Propane powered units are likely the best option for most households. Natural gas/propane units are more powerful than electric, and wherever you live, you likely already have a gas line in your home. Additionally, gas is typically less expensive than electric.

Propane-powered tankless water heaters can be a great option for any homes that don’t have access to a natural gas line.

Some manufacturers do carry electric tankless water heaters as well. While this option is cheaper upfront, it will end up costing more in the long run, and if you live in a cold state like Minnesota, it will not even be powerful enough to get you hot water for one shower at full volume.


Condensing vs Non-Condensing

What are the differences between condensing and non-condensing?

Condensing tankless water heaters are about 10% more efficient than non-condensing tankless water heaters and will save you money on your energy bill in the long run. The trade-off is that the maintenance can be more complex than a non-condensing tankless water heater. With that being said, because tankless water heaters need more maintenance in general, the difference between condensing and non-condensing maintenance is not that impactful to a homeowner.

Non-condensing units are less efficient than condensing tankless water heaters. While they have no need to drain the condensation, they do require a venting hood system to be installed. Additionally, in the long run non-condensing tankless water heaters will be more expensive.

Below is a brief diagram from Rinnai explaining some more key differences between condensing and non-condensing tankless water heaters.




Source: https://www.rinnai.us/tankless-101

Indoor or Outdoor

One of the unique things about tankless water heaters is that you can mount them on the outside of your house.

Should you get an outdoor model? Well, the answer here is actually pretty simple. If you live in a place where it gets relatively cold (like freezing temperatures during the winter) you’ll probably want an indoor model. 

The advantage to having an outdoor tankless water heater is that you would not need to set up a drain or vent system as you would indoors. However, if the temperatures outside your home are too low, the extra costs to heat water would outweigh those benefits.


Other Potential Tankless Water Heater Features

There are many additional features you can add to your tankless water heater, but there is one you should strongly consider. Recirculation.

One drawback many tankless water heater owners note is the length of time hot water takes to get to an open faucet. While you have endless hot water, it can take 10-15 seconds longer than you might be used to with a tank water heater. The best solution to this is recirculation technology - this nearly eliminates the wait for hot water. It keeps hot water recirculating in some of your pipes, so you don’t have to wait for hot water. 

The recirculation process is explained in-depth in this video from Rinnai.


Most modern tankless water heaters come Wi-Fi ready, enabling you to set up a schedule and have it predict when you’ll need the hot water. You can schedule your unit to start it running and have hot water ready exactly at the moment that you plan on taking a shower, running a bath, or doing the laundry.

So, Which Tankless Water Heater Should You Buy?

Whatever choice you make we recommend only buying professional-grade tankless water heaters.

If you’d like to know more about why, check out “Box Store vs. Professional Grade Water Heaters: The Major Differences”.

If you’re in Minnesota, contact one of our expert technicians to walk through your needs and they will be happy to help you find the right tankless water heater for you.

If you’re not in Minnesota, and you need a place to go to start looking to buy some tankless water heaters, check out the Rinnai website. They have a great selection of several tankless units along with more information about tankless water heaters. You’ll be able to find a fit for you whether you need one for your home, mobile home, or business.

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