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Tankless water heaters are water heaters that heat the water flowing through it directly. This means that there are no storage tanks associated with a tankless water heater unit.

Whenever a hot water faucet is turned on, cold water flows into the tankless water heater unit and comes out as hot water.

The conversion of cold water into hot water is immediate and on an on-demand basis.

Hence, tankless water heaters are known by various other names such as instantaneous, instant-on, on-demand, and flash type water heaters.

Tankless water heaters provide an unlimited supply of hot water, are energy efficient, and have various other advantages.

However, like any other device, they have their limitations as well.

The location of a tankless water heater is a rudimentary factor that will enhance or mar the performance of the water heater.

Key Considerations for Installation Location 

Let us look at the key factors that one must consider while choosing the location of the tankless heater and the most common locations where they are placed.

1. Exposure to the outside environment

When installing a tankless water heater, it is advised that it be placed indoors. This is extremely important especially in the case of electric tankless water heaters.

Exposure to rain, snow, direct sunlight, dust, insects, etc. might damage the water heater. If the tankless water heater is being installed outside the house, the tankless water heater must be protected from these elements.

One important requirement is that the water heater is freeze protected. Insulation of the pipes that are isolated from the home heating system is essential in this case.

2. Changes in existing plumbing and electric wiring

Choose a location for the tankless water heater which does not demand any major changes in the existing plumbing configuration.

It is also preferable to install the tankless water heater near the electric panel, so that very long wires can be avoided.

If the tankless water heater is meant to supply hot water to the entire house, it can be installed in the previous water heater’s location.

If the purpose of the tankless water heater is to serve a single application, it is appropriate to attach the tankless water heater near that point.

3. Ease of access for servicing

Install the tankless water heater in a place that can be easily accessed. In case of any damage to the heater or any maintenance fixtures, it needs to be easily and comfortably accessed by the technician.

4. Clearances for tankless water heaters

Tankless water heaters must be kept away from combustible materials.

The must be placed away from gas vents, chimneys, steam, and hot water pipes, materials made of wood, paper, plant fibers, etc.

A tankless water heater should not be installed above any electrical boxes or junction. Water leakage from the tankless heater can drip on to these and cause fires.

Likewise, tankless water heaters should not be installed below any air-conditioning pipes or other water lines. Damages to the tankless water heater due to water dripping into the unit must be avoided at all costs.

5. Venting requirements

Proper venting is necessary for tankless gas water heaters. The location of the water heater should be chosen such that the venting pipes need not be very long.

Venting can be of two types namely, horizontal and vertical. Horizontal venting allows for the combusted air to be let out through the walls, whereas, vertical venting leads to the roof of the house

Irrespective of the type of venting, the pipes must not be too long for ease of servicing.

Best Locations to Install Tankless Water Heaters with Pros & Cons

Most Common Locations for Installing Tankless Water Heaters

So, which locations are most suitable in general for the installation of tankless water heaters? here is the list with reasons – 

1. Basement

The basement is the most sensible place to install a tankless water heater when the heater is used to provide hot water for the entire house.

If the output flow rate does not meet the daily hot water requirements, two consecutive heaters can be installed.


  • No major plumbing changes if the heater is being upgraded from an existing tank style heater.
  • The tankless water heater is protected from harsh weathers.
  • Easily accessible for maintenance.


  • The hot water requirements may not be met for houses with more than a single floor excluding the basement.
  • Wastage of water and time while waiting for the hot water to arrive at the faucet. This can be avoided using a recirculation pump.

2. Attic

For houses with two floors or more, the attic the best place for installing a tankless water heater.


  • The heater is protected from harsh weather.
  • For tankless gas water heaters that require venting, it is easier to install chimneys.


  • Changes in existing plumbing and electrical wiring configurations may need to be done.
  • In case of water leaking from the heater, the ceiling and wall below the attic may get damaged.
  • Great care must be taken to ensure no electrical joints are present below the heater.

3. Garage

While installing a tankless water heater in the basement is a good option, for houses without a basement, the garage is the best place to install a tankless water heater.


  • Easily accessible.
  • Protected from the harsh weather outside.
  • Unlike a basement or an attic, a garage is usually kept clean thus, keeping the heater protected from dust and moisture.


  • Upgrading the existing plumbing and electrical wiring configurations.
  • Extra care needs to be taken to ensure that no combustible materials are brought near the tankless water heater.
  • The tankless water heater must be installed away from any electrical joints.
  • The burner and ignition device of the heater must be at least 4.5 ft. from the garage floor.

4. Outdoors

While most tankless water heaters are installed indoors, they can also be placed outside the house.

Outdoor installation is mostly seen in the southern states of the US, where temperatures do not drop below the freezing point.


  • Additional pipes for venting are not required in case of a tankless gas water heater.
  • Indoor wall space can be saved.


  • The heater needs protective cover from dust, sunlight, rain and other external elements that might damage it.
  • The heaters need freeze protection so that the water in the pipes do not freeze during winter.
  • Apart from the above-mentioned locations in a house where tankless water heaters are installed usually, they can also be installed close to certain applications that require a dedicated hot water supply.
  • This will ensure continuous hot water flow, without any irregularities. However, the cost of installation of multiple tankless water heaters can be quite high.


It is as important to choose the proper location to install a tankless water heater as it is to choose the most appropriate type of heater to meet the hot water demands of a household.

While installing a tankless gas water heater in the house, one must ensure that the installation follows the National Fuel Gas Code, and the current edition of NFPA.

Apart from this, it is preferable to keep the venting pipes, and electrical wires to the heater short.

The location where a tankless water heater operates at its optimum is not necessarily the same for all households. Choosing the right place to install your tankless water heater will result in greater energy efficiency.


Can a tankless water heater be installed in a bathroom?

There are point-of-use models of tankless water heaters that can be installed in bathrooms. Models rated at 1.2 gallons per minute can be used for a single bathroom sink.

Point-of-use tankless water heaters with higher ratings than can operate two shower heads at the same time are also available in the market.

Can more than two water fixtures be used simultaneously with a single tankless water heater?

Yes. Some Tankless water heaters can run two or more shower heads at the same time. Before installation, make sure that you purchase a model that can handle such high flow rates.

Can I install a tankless water heater myself?

While most of the tankless water heaters come with an installation manual, it is highly recommended that you hire an experienced person to install the product. Installation involves tricky electrical and venting configurations.
If the installation procedure is not carried out properly, injury or damage to the product might occur. A trained professional will know about the safety precautions and proper procedures for installation.

Can the existing venting be used?

It is recommended that the venting be changed as per the product’s requirements. Every tankless water heater manufacturer would have specified the venting requirement for the product in the product manual.

It is essential that the venting pipes be installed as specified in the manual rather than adjusting the air pipes to suit the existing vents in the house.

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