Make the Right Choice: Gas vs Electric Tankless Water Heaters — Here’s How

Gas vs Electric Tankless Water Heater

We know it’s a difficult decision, but we’re making it easy for you.

Technological advances break open new possibilities. Take a step away from traditional methods and consider tankless water heaters. They’re gaining popularity because you can continuously have hot water. Though they’ve been around for almost a century, new technology now makes them viable, energy efficient options.

But what will you pick? When considering gas vs electric tankless water heater there is no best option, because your home or building setup is unique. For the ideal long term solutions, you need some insight and we’ll help you get some.

Let’s break it down.

How Does A Tankless Water Heater Work?

Why is this such a popular option these days?

Imagine having hot water on demand, without being dependant on the size of your water reservoir. That’s what’s possible with tankless water heaters.

Tankless water heaters are an all-round win on long-term operating electricity/gas costs. The real consideration for going tankless is weighing those savings vs instillation costs (which can be significant). Here we will walk you through how to decide for both electric and gas tankless water heaters. So for the basics, how does your tankless water heater work:

  1. Water travels through the water pipes to the heater unit
  2. An element or gas burner heats up the water
  3. A heat exchanger transfers the heat to the water from the heat source
  4. Hot water comes out the tap almost instantly
  5. Tankless Water Heater Benefits

    With this luxury you get these pros:

  1. A more energy efficient heating system
  2. Big monthly savings on utility costs
  3. Benefiting the environment

One unit can serve the entire building, or a small unit can be installed near each hot water tap.

This differs from traditional water heating systems where water gradually heats up and needs to be kept warm throughout the day. You can imagine keeping water hot wastes a lot of energy.

The popularity of tankless water heaters—apart from the luxury of instant hot water—is that it’s energy saving and therefore environmentally friendly.

The concept is therefore beneficial, but don’t make a quick decision when comparing a gas vs electric tankless water heater. Both carry risks, have benefits and unique requirements.

This implicates your budget, efficiency and each option has unique long-term effects. That’s why the comparison below is important for your continued satisfaction.

For further considerations see the below video, otherwise skip it and continue to the comparison section:

Let’s Compare: Gas vs Electric Water Heater

Your decision implicates whether you’ll enjoy using the heating system in the future. Below we’ll discuss many aspects you need to consider before making your final decision.

Tankless Water Heater Installation Considerations

What are the Requirements?
A tankless system isn’t always easy to install. If you’re looking for an effortless option—without changing too much of your home’s infrastructure—pick the system your home can accommodate.

One of the main considerations when picking a tankless water heater is where the energy will come from and whether you’ll need to customize your home.

How Many Amps Does an Electric Tankless Water Heater Draw?

For an electrical heater you need at least 20A. As most homes are built with 15A circuits, it usually requires an upgrade.

While you won’t need this when installing your gas system, other types of modifying will be necessary.

Tankless Water Heater Installation Cost

Your home will need alterations, usually costing up to $1500. The meter base sometimes also requires additional equipment at a cost of up to $2000.

Is Your Home Suitable for a Tankless Gas Water Heater?

A gas water heater has unique requirements:

  • You must ensure it’s safe to use, and ventilation is therefore essential. The venting system ensures combustion can take place, by supplying a steady air flow.
  • You also need access to the right gas supply and traditional gas lines aren’t always sufficient.

When you compare this to the requirements of an electrical system, you can see one area where an electrical heater easily wins the contest. An electrical unit can be smaller than a gas system. It’s, therefore, easier to install and doesn’t require you to customize the building.

Even if you don’t have sufficient power to drive the system yet, such an infrastructure is easier and cheaper to upgrade than getting a new gas source.

Annual Cost: Gas vs Electric Tankless Water Heater

For long-term decisions relating to your home, cost plays a huge role. Here are the various expenses you need to calculate and compare.

Tankless Water Heater Parts and Installation Costs

Initially, an electrical system will require fewer expenses than a gas version:

  • A gas system usually involves an additional fuel source to be installed, which can be costly. Even if your current electrical source isn’t sufficient, upgrading is cheap.
  • A gas system requires additional features such as ventilation systems for air and to channel CO2 away.
  • An electrical tankless water heater unit than its gas counterpart.

However, this is only one part of the overall picture when considering a natural gas vs electric tankless water heater.

Energy Source & Operation Cost Calculations

Your day to day costs will be lower when you have a gas water heater because this energy source is generally cheaper than using electricity.

Keep in mind that these rates may fluctuate and gas prices can be impacted by global politics and economic changes.

Here are some tips to help you calculate the costs.

I suggest using this sheet for the calculaton calculate for you

Most of the information needed for the sheet can be found in our product reviews here:

Comparing The Best Tankless Water Heaters

If you still want to calculate the old fashion way, here is the basic outline of how to approach it:

Calculations will work like this:

  • Gas heaters: 365 x your usage / EF x Fuel cost
  • Electrical heaters: 365 x kWh/day / EF x Fuel cost

You need the following information:

  • Unit cost of fuel/energy source (here is the US
  • Know the energy factor or energy efficiency (EF)
  • Know your average usage
  • Know what the kWh/day will be (here is the US average of 12 cents per KW/h)

Installing A Gas Tankless Water Heater (VIDEO)

Installing An Electric Tankless Water Heater (VIDEO)

What About Environmental Impact?

The environmentally friendly features are why many people pick a tankless system. However, the two systems still differ in their impact.

There’s a clear front-runner in this department. An electrical system doesn’t produce any greenhouse gasses. If the energy comes from sustainable sources such as wind or solar generated, the effect on the environment is minimized even further.

The other benefit here is the small space needed to install the system. There aren’t many installation features that may one day end up as garbage or landfill.

It’s an ideal option now and in the long term.

Interesting Facts to Help You Decide
Now that you know the basics, let’s help you fine-tune your decision. These features may play a role in your specific scenario.

Circumstances that Affect Your Water Heater’s Functioning
Acidic and hard water can negatively impact a waterless heater system. Acid can damage the heat exchanger and hard water causes more scale to build up. You either need to have your water treated, or you’ll spend more on maintenance costs. Does this make a tankless water system still viable for your home?

If you want to circumvent gas vs. electric tankless water heater problems, it’s necessary you have your water tested first. You’ll find kits at your local hardware store for about $10.

Fluctuating Prices

You’re probably drawing up a budget now to help you decide on the best option. But rates change. Once again there’s a risk in both instances:

  • Electricity is more expensive, but rates stay more constant
  • Gas is cheap, but carries the possibility of unexpected price hikes in future, also related to the region you live in

Checklist for deciding what is right for you:

You can see the energy efficiency is a determining factor in what you’ll pay in the long term.

Is Your Energy Source Readily Available?

What is your utility set up? Not all homes have gas lines installed. Gaining access to such a source can make the project more laborious and costly than necessary.

Are Gas or Electric Tankless Water Heaters More Efficient?

For budget and environmental reasons you should also consider the efficiency of a tankless electric vs gas water heater:

  • Electrical units can be up to 99% efficient
  • A gas system is 85% efficient on average

What does this mean for tankless water heater gas vs electric cost?

  • It relates to how much energy is lost with each unit of fuel
  • When you consider the cost and effect of this over time, an electrical unit becomes more cost-effective, despite electricity rates being higher than gas.

What Time and Money Will You Spend on Maintenance?

Here’s a huge difference when comparing a gas tankless water heater vs electric water heater. Unless you use hard or acidic water (see below), you’ll rarely do any maintenance on an electrical heater. Even if there are malfunctions, it’s easy to determine the source of the problem and repair it.

In contrast, you need yearly maintenance on your gas system. Safety checks are essential to ensure the combustion process is on par.

The yearly service costs range from $45 to $175, depending on labor costs in your area and whether more than a flush of the system is necessary.

Will the Capacity Suit Your Lifestyle?

You don’t have a limit on the amount of water you can heat up, but that doesn’t mean it will always go on flowing for yours providing piping hot water.

A few tankless water heater facts:

  • Your tankless heater will be set to heat up water to the desired output temperature.
  • Incoming water’s temperature may fluctuate:
  • In cold regions the water will be a few degrees colder than other geographical areas
  • Water in your house pipes may differ in temperature from water flooding in from the water source such as the city’s utility structure
  • A water heater has a capacity to heat water flowing at a certain speed or rate. This can be measured in GPM (Gallons per Minute).
  • A gas heating source can heat up water faster than an electrical unit. Therefore fast flowing water can even be heated up adequately.
  • For an average home an output of 8GPM is usually enough.
  • In cold areas—such as places with an average low temperature of 20°F—an electrical unit can only provide output of 3.5GPM, because it takes longer to heat the water flowing by.

Now you need to determine what your lifestyle requires.

If you plan on doing many tasks that require water, at once, you need a water heater with a high capacity. Why?

Imagine a common scenario. You may take a shower, enjoying the scalding hot water. But at the same time, someone starts washing laundry. If you have one water heater it may require the water flow rate to drop so the heater has time to heat the water adequately. If your water heater can’t produce high GPM your shower can be a cold one.

You have options to circumvent this problem:

  • Opt for a gas heater if you know your hot water demands are higher than usual. This is also ideal if you’re considering one for industrial use.
  • Because some electric tankless water heaters are small enough to fit in cupboards you can install one for each room, so two taps don’t draw from the same source.

How Long Will a Tankless Water Heater Last?

You want this decision to be an investment for the long term, right? A tankless system already lasts much longer than conventional systems:

  • They rarely leak
  • They’re designed to be maintained so parts can be exchanged instead of the entire system being replaced

In this department, it’s a draw because either one will serve you well for up to 20 years.

Are there Any Safety Concerns?

Are you concerned about the effects of gas in your home? While there aren’t many safety risks with an electrical system, you always run the risk of leakages when using gas.

In extreme situations—such as flooding or fires—a gas source becomes a safety risk, which many homeowners opt to avoid so they can have peace of mind.

Do You Have Unique Circumstances?

Consider these factors as well so you know your water heater will suffice in all matters homeowners find important.

Anticipated Usage

Put effort into measuring your general water usage before deciding on a gas vs electric tankless water heater.

There’s no sense in installing an electric water heater if it will limit your day to day functioning because of its lower capacity. Gas heaters with their large capacities are ideal for large families, people sharing large houses or even industrial use where water is essential.

Personal Preferences

Don’t pick a unit simply because it makes sense:

  • If you want your heater to look as good as it works, electrical units usually look sleeker and installation looks neater.
  • Because you can place electrical units in cupboards they’re ideal to maintain the aesthetic value of your home.

Pros and Cons

Summarizing for quick reference when you compare gas vs. electric tankless water heater.

Gas Water Heaters

  • Performs best in cold weather
  • Lower fuel cost
  • More reliable
  • Output can be over 8GPM


  • Requires ventilation
  • Requires fuel hook-up
  • Safety concerns

Electric Water Heaters

  • Requires little space
  • Infrastructure is easy to install
  • More environmentally friendly
  • Aesthetically pleasing units


  • Not effective in very cold conditions
  • Lower capacity
  • High energy costs


Have you decided yet? It’s almost exciting to think of having an endless supply of hot water in your home (More about the lower costs) No more cold showers! And a lower utility bill is the best motivation to consider this. You’ll save money, save the environment and save time on all tasks involving hot water.

An obvious winner in terms of luxury, aesthetics and even costs is an electric tankless water heater. But avail yourself of its shortcomings so you don’t long for your old system once the new one is in.

You may also like...

Leave a Reply

Your email address will not be published. Required fields are marked *