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Gas vs Electric Tankless Water Heaters: How to Choose

Gas vs electric tankless water heater is one of the very first questions that a buyer asks when searching for a new tankless water heater for their home. But deciding which fuel type you go with might not be a choice for you.  

Many areas aren’t lucky enough to have both electric and gas options available to them, so the choice is made for them. If you can choose between a gas vs electric tankless water heater, there are a few things to consider.

Gas vs Electric Tankless Water Heater: Which is the Best Choice?

Gas vs Electric Tankless Water Heater

There isn’t an easy answer to this question because electric and gas tankless water heaters are great choices, and each has its own strengths.  

Every house has its own unique circumstances. To put it another way, what works for your neighbor, might not work for you.

Choosing which tankless water heater to go with is an important decision. It is a decision that should be made based on your budget, hot water demand, personal preferences, and installation opportunities.

It’s highly recommended that you talk with a professional because they can guide you through the process of choosing a gas vs electric tankless water heater.

Gas vs Electric Tankless Water Heater Buyers Guide

Gas tankless water heaters are completely different than electric tankless water heaters. The only thing that’s common between them is that they’re both water heaters!

There are several important things to think about when choosing your tankless heater, and the goal you should have for your purchase is to get the type that best meets your home requirements.

In this article, we’re going to look at both gas and electric tankless water heaters so you can take a look at how they compare in several categories.

Start-Up Costs

When first starting out, there are technically two prices to think about when you look at the price of a tankless water heater. The first being the water heater, and the second being the cost of installation.  

When it comes to start-up costs, electric heaters are the best choice. But let’s look at why.

Gas Tankless Heaters

  • A high-quality gas water heater system can cost you over $1,000. You’ll pay more as you add on features and settings.
  • Non-condensing systems are cheaper to buy, but they cost more to install because of requirements for venting.
  • Condensing systems get rid of the need for venting altogether because these systems have a much more elaborate design and cost more overall.

Electric Tankless Heaters

  • Electric systems are cheaper than gas tankless water heaters. A high-quality electric tankless water heater can be bought for around $500 – $600.

Installation

Electric Tankless Heaters

It’s highly recommended that you hire a professional for the installation of your tankless water heater. It’s crucial that the tankless heating systems have been installed properly, both from a results and safety standpoint.

Tankless water heaters are major investments, and you’ll find that the extra expense to have it installed correctly is worth it.

Gas Tankless Heaters

  • A gas system is far more expensive and complicated to have installed than its electric counterparts.
  • Non-condensing systems need to have an intricate venting system to provide enough airflow for fuel combusting. For this, they require expensive category III venting material made from stainless steel.
  • Your home’s existing gas lines and venting ducts hardly ever work with a new gas tankless system.
  • With the installation of a new water heater, you’ll find that other expensive home modifications have to be done to work with one of these units’ gas and venting requirements.

Electric Tankless Heaters

  • An electric system is easy to install, so it typically has cheaper installation costs associated with it.
  • Electric water heaters are typically smaller than gas water heaters – usually about a third of the size of a gas system.
  • Because no gas combustion happens with an electric tankless water heater, there’s no need for ventilation. This lowers the cost of installation and provides flexibility as to where you put the unit.
  • They’re less complicated than gas tankless water heaters, and since they’re smaller in size, you can install them in out-of-the-way places, like closets. This is huge for new home construction, where a plan needs to be in place for the units’ electrical requirements.
  • If you don’t have to upgrade your home’s electrical system, installing a new electric tankless water heater is simple and inexpensive. But if upgrading the home’s electrical system is required, the installation will be extremely expensive. This is why electric tankless water heaters aren’t a good choice for older homes because you never know if the electrical system will be up to the necessary standards for the unit.

Operating Expenses

There are two main operating expenses associated with gas vs electric tankless water heater: the fuel cost and the unit’s efficiency.

Fuel Cost:

You’ll find that the price of gas is currently lower than that of electricity in the vast majority of areas. This helps make the operating expenses cheaper for a gas system than for an electric system.

However, you must remember that the price of fuel will vary by region, so gas is more expensive than electricity in some regions.

Fuel prices are volatile and change dramatically, whereas the price of electricity doesn’t. But fuel prices are predicted to rise in the future, with electricity prices staying relatively stable.

Efficiency:

The efficiency rating for water heaters is based on how much hot water the unit produces with a single fuel unit. As the tankless system is more efficient, less fuel is used to produce hot water.  

Electric systems are more efficient (98 – 99 percent efficiency) than gas systems (80 to 85 percent efficiency).

Hot Water Requirements

Gas and electric water heaters measure their output of hot water in terms of how many gallons per minute (GPM) the unit can produce.

For the average family, eight GPM is typically plenty of hot water, but you must consider your family’s specific needs for hot water.  

Colder regions have a lower GPM flow rate than warmer areas. This is because the water coming in is much colder, and the water heater needs to work much harder to produce hot water.

In the gas vs electric tankless water heater debate, gas units typically perform better, especially when large amounts of water are needed.

Gas Tankless Heaters

  • A gas tankless water heater can deliver more hot water (over eight GPM) than electrical units.
  • They’re a better fit for large households that have a large hot water demand.

Electric Tankless Heaters

  • Electric tankless water heaters can deliver up to eight GPM of hot water.
  • Remember that the temperature of the incoming water influences the output of GPM. So, the hotter the incoming water, the higher the GPM the heater has.  

Water Heater Service

Maintenance

Annual maintenance is needed for both gas and electric tankless water heaters to help them operate at the highest efficiency rate possible and maximize their expected lifespan.

Gas Tankless Heaters

  • Gas tankless water heaters do need to be maintained more than their electric counterparts.
  • You should expect to have your gas tankless water heater inspected by a professional to ensure that the fuel combusting is being done safely and the appliance is working correctly.
  • They’re more likely to have mineral scale build-up and, because of this, often require frequent flushing of the unit.
  • The homeowner can do most maintenance tasks, but some homeowners prefer to have professionals do the maintenance.

Electric tankless heaters

  • Electric units require little maintenance.
  • The water inlet screen filter needs to be cleaned when needed, and the system should also be flushed annually to remove any limescale build-up.

Service Life & Warranty

Traditional water heaters eventually will start leaking, and you’ll have to replace them, but tankless water heaters are designed to last.

Tankless water heaters are meant to be repaired, and the parts of the unit to be replaced when needed. A tankless water heater generally has a service life of 20 years regardless of if it’s gas or electric.

Gas Tankless Heaters

  • Designed to have a service life of up to 20 years.
  • They’re harder to service because of how complex they are compared to electric units.
  • Warranties vary, but it’s common to see a 1-year for labor, 5-year for most parts, and a 10-year on the heat exchanger.
  • Service life can be easily influenced if the tankless water heater isn’t serviced regularly.

Electric Tankless Heaters

  • Electric units tend to exceed the 20-year life of gas tankless water heaters because of their simple design.
  • Warranties vary, but labor is typically covered for 1-year, and parts for 5-years.
  • When problems with the unit happen, electric units can troubleshoot, diagnose, and repair gas units.

Homeowners Preference

From all the information above, you can see that both electric and gas tankless water heaters do the same thing – deliver hot water. But they’re each special in many ways.

Most of the time, the final design comes down to your personal preferences. But here’s a few more things to consider:

Gas Tankless Heaters

  • If you want to improve your energy efficiency, a gas tankless water heater can be a better choice than your traditional water heater in terms of energy saving
  • If your household is large with a large demand for hot water, a gas tankless water heater could be better. Several models can deliver high GPM levels of hot water when compared to electric models.

Electric Tankless Heaters

  • More homeowners feel safer when they have an electric tankless water heater for heating water. This is because they’re uncomfortable using propane or a gas line for major home appliances in case of natural disasters.
  • People are often interested in electric water heaters because of concerns for the environment. They’re better for energy efficiency, and they don’t release greenhouse gases or use fossil fuels.

Final Thoughts

There isn’t a one-size-fits-all option when it comes down to it in the gas vs electric tankless water heater debate. Every homeowner has their own unique needs and should come to their own conclusions about which tankless water heater is best for them. However, several professionals feel having an electric tankless water heater is often the best choice.

This is because an electric unit is less expensive and easy to install. They also don’t require a lot of maintenance. Additionally, because of their simple design, they don’t need to undergo an inspection by professionals annually. This not only saves you a lot of money, but can also lead to a much longer lifespan.

A gas powered water heater can also be a great choice for homeowners, particularly if your family’s need for hot water exceeds the average family.

However, they can be harder to troubleshoot if something goes wrong. And they’re harder to service, too; this is due to having an intricate heat exchanger.

It’s highly recommended that you don’t switch fuel sources in your home. If your home currently uses an electric model water heater, the cost of retrofitting your home for a gas model tankless water heater may be too much.

But you must know that by staying with your current fuel type, your home could still require expensive power modifications and upgrades.

Tankless water heaters have become more popular and are a great choice. Especially if you want to have a unit that will last you for years. The expense of the transition to a tankless unit can be quite hefty. So, it’s always a great idea to talk to a professional to see what can be done to make the transition as cost-effective as possible for your home’s needs.

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Amanda Perkins

Amanda began her career as a technical writer for a healthcare group in 2008. Years after getting married and starting a family, she joined her husband Joshua on the Water Filter Authority journey to educate other families and households about safe, affordable, and effective water filtration systems.