Difference Between Gas and Electric Powered Tankless Water Heaters

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Quick Answer: Gas vs. Electric Tankless Water Heater

Gas and electric type water heaters are different in their build, the power required for operation, purchase and installation prices, installation requirements, operating costs, maintenance requirements, output flow rates, and their ecological footprints. These are the factors that require consideration for the proper operation of tankless water heaters in an efficient manner.

Tankless water heaters heat the cold water entering its unit directly, eliminating the need for a storage tank.

These heaters are activated only when there is water flowing through them, making them much more energy-efficient than the conventional storage type heaters.

Since the water is heated immediately and only when required, tankless water heaters are also commonly known as instantaneous or on-demand water heaters.

Apart from its efficiency, another major advantage that tankless water heaters have is that they provide an unlimited supply of hot water.

As long as a hot water tap remains on, cold water is instantly converted into hot water and flows out through the tap.

Two types of tankless water heaters based on the type of fuel they use are available in the market. Some use propane or natural gas to heat water, whereas, the others use electricity to power a heating element.

The working principle for both gas and electric type tankless water heaters are the same.

However, there are significant differences in output flow rates, cost, maintenance requirements, etc. Let us take a look at all these differences and how they affect the operation of the tankless heaters.

Differences in Gas Type and Electric Type Tankless Water Heaters

Difference Between Gas and Electric Powered Tankless Water Heaters

From the names, it is obvious that some tankless heaters use electricity to heat water, while the others use a flame fuelled by gas.

Apart from the type of fuel used, there are various other areas where the two types of tankless water heaters are different.

The various parameters and their differences as seen in the two types of tankless water heaters are as follows.

1. Purchase price

The purchasing price for both types of tankless water heaters is different by a significant amount of money.

While a typical electric tankless water heater costs around $500, the cost for a gas tankless water heater of the same size comes at around $1000 – $1200.

Before jumping to a conclusion that electric tankless water heaters are much cheaper than the gas type heaters, keep in mind that this is just the initial purchase price.

The overall price difference after considering operation and maintenance costs is what one should give thought to before purchasing a tankless water heater.

2. Installation costs and requirements

Installing an electric tankless water heater is easier and costs less than a gas tankless water heater because there are no venting requirements for electric type heaters.

In an electric type tankless water heater, there are two major installation steps. The first is to connect the water lines after mounting the heater on a wall.

Connecting the source of water to the heater inlet and then the outlet to the pipeline which is further connected to hot water faucets are the only water connections necessary.

When it comes to electrical wiring, the steps are pretty simple. The type of wires to be used and connection steps will be provided in the user manual of the heater. The wiring requirements may vary for different manufacturers.

After completing these two steps, the power can be turned on and the electric tankless water heater can be used.

For a gas tankless water heater, two additional steps are required. These are connecting the fuel lines and completing the venting requirements for the heater.

While connecting the gas lines is quite simple, the same cannot be said for venting requirements.

If an indoor model of gas tankless water heater is being installed, installing exhaust lines and external vents can be a costly addition to the already high purchase price.

3. Installation point

It is not just the venting requirements and its cost that make installation of gas tankless water heaters difficult. Because of the air intake, these heaters can only be installed in places where sufficient air is available.

The air requirements for a gas tankless water heaters are on the order of 50 cubic units per 1000 BTU of rated input.

This means that if these water heaters are to be installed in closed spaces, there must be proper vents that allow the required air into the unit.

The exhaust vents are commonly 3 – 6 inches in diameters for residential models.

Meeting these air intake and exhaust requirements hinder the placement of these gas tankless water units in closets and for point-of-use applications.

Contrary to this, electric tankless water heaters require no air intake or venting pipes, making them suitable for point-of-use applications.

4. Power requirements

A gas tankless water heater requires power only to operate the electrical circuit within the unit. The control circuit is responsible for the regulation of water temperature.

These heaters work on 120V AC, which is common in most houses in the US.

This circuit does not draw much power and hence, no changes in the electrical configurations in the house are necessary.

However, this is not the case for an electric tankless water heater. About 147 watts of electricity is required to heat one gallon of water every minute by one degree Fahrenheit.

Hence, based on use, the heating elements require power varying from 2.5 kW to 28 kW.

Smaller electrical units can operate on 120 V, while, tankless water heaters that draw power above 3.5 kW require 240 V.

This means, an upgrade from the previous electrical configurations of the house may be necessary.

Upgrades include changing to heavier gauge wires, including circuit breakers, changing to a larger meter loop and main panel.

5. Output flow rate

The ‘unlimited supply’ of hot water from tankless water heaters only works if one or two applications are running simultaneously.

More applications in use mean that the water exits the heater before being heated to the preset temperature.

The output flow rate of a gas tankless water heater is comparatively higher than an electric tankless water heater of the same size.

The output rating of a typical gas tankless water heater is 6 – 7 gallons per minute.

The maximum ratings as provided by an electric tankless water heater is only 4 gallons per minute.

This makes electric tankless water heaters more relevant for point-of-use applications, or in places where hot water is not frequently used (southern US states).

6. Operating costs

The operating costs of tankless water heaters depend on the frequency of hot water usage and how well the heater is maintained.

While we cannot pinpoint the amount of money that can be saved by using a tankless water heater, most manufacturers specify the energy efficiency of the heater in the manual provided by them.

For electric water heaters, some manufacturers claim 50 – 60% of energy efficiency while operation, as compared to a tank style electric heater.

Most gas tankless manufacturers claim that 25 – 30% of energy can be saved by using a gas tankless water heater than a gas-fueled storage type water heater.

Comparing a gas type and an electric type tankless water heater, the latter is estimated to have higher operating costs.

However, the cost of natural gas is increasing faster than the cost of electricity and is expected to become more expensive than electricity in a few years.

7. Maintenance

Maintenance requirements for the gas type and electric type tankless water heaters do not have much variance.

The main maintenance required is for the tankless unit to be flushed with white vinegar once every year to remove the mineral deposits.

This procedure is common for both types of tankless water heaters.

Gas type water heaters require maintenance of the gas fuel valves and the air ducts which are absent in electric type heaters.

The valves and vents also need to be checked and cleaned regularly to any avoid product damage or health hazards.

8. Environmental impact

An electric tankless water heater does not release any greenhouse gases. Its small size reduces the ecological footprint that it takes to manufacture the product.

Later, wind, solar and other forms of renewable energy sources may also be used to power these units.

A gas-type tankless water heater relies on natural gas or propane which are fossil fuels that are non-renewable, for heat production.

Also, the exhaust gas from the heater contains Carbon Monoxide which not only pollutes the environment but is highly toxic to humans as well.

Final Word

Gas type and electric type tankless water heaters are different in various aspects than just the type of fuel they use.

Electric tankless water heaters are more commonly used in places where the temperature does not get too cold and in households with no more than 3 people.

Gas tankless water heaters are used widely in homes in the northern US states, where the winters get extremely cold.

Natural gas is more commonly used as the fuel as most houses have an already existing natural gas connection. If your house does not have a natural gas line, then propane cylinders can be used.

Whether a gas type of electric type tankless water is best suited for your household is dependent on various factors.

After careful consideration of all these factors only should one must choose the type of tankless water heater for a house.


What type of heater can I use for point-of-use applications?

Electric tankless water heaters are best suited for these applications as they can fit into small spaces without any additional space requirements for venting.

Several models of electric tankless heaters that have different output flow rates are also available in the market. You can choose a model best suited for the required appliance and save energy and money by doing so.

Are the operating costs for gas tankless water heaters higher?

No. In fact, it is usually the other way around.

Some gas-type tankless water heaters waste fuel in order to keep a pilot flame burning, resulting in a waste of energy and money. However, when electricity charges include a demand rate, then the cost of electricity will shoot up, resulting in larger operating costs.

Does any stand-by loss occur in electric tankless water heaters?

There are no standby losses associated with electric type tankless water heaters. The heater system is activated only when water flows through it and no energy is given off to the surroundings like in a storage type heater.

What type of tankless water heater should I choose for my house?

For a large household with more than 2 members, it is recommended to have a gas-type tankless water heater that supplies hot water to the entire house.

In case of a dedicated tankless water heater that provides water to a single or two applications, it is better to have an electric tankless water heater. Electric tankless water heaters are also suitable to use at places where winters are not extreme.

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