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Gas vs Electric Tankless Water Heaters

By: David Trinh
Last Updated:
Gas vs Electric Tankless Water Heater

You’ve figured out that a tankless water heater will be much more efficient, cheaper to run, and longer-lasting than one with a tank.

Still, the decision process is far from over. Now you need to determine what is the better type of tankless water heater for your home: gas or electric.

Unlike deciding between a tank and a tankless water heater, there is no clear cut answer.

Both gas heaters (propane or natural gas) and electric tankless water heaters have their share of pros and cons. The right choice will depend on the needs of your household, the capabilities of your building, the climate, and your personal preferences.

Comparison Chart of Electric vs Gas Tankless Water Heaters

Gas Water Heaters
Electric Water Heaters
Purchase Cost
Investment for Installation
HighLow for Most Homes
Operating costs over long term
Lower than electric but projected to riseHigher but Stable
Flow Rate Capacity
At least 8 GPM+Up to 8 GPM in Warm Climate and 3.5 GPM in Cold Climate
Maintenance Needs
Venting Requirements
Impact on Environment
Relies on Fossil FuelsDepends on Energy Source

Gas Tankless Water Heater Pros and Cons


A quick glance at the electric vs propane tankless water heater chart may give you the impression that electric is the better option. In actual fact, it is a bit more complex. True, the advantages of gas tankless heaters are fewer in number. However, for some people, they can far outweigh the disadvantages.

Pro: Gas Heaters Can Have a Higher Capacity

high capacity

Gas water heaters can have a much higher capacity than electric heaters. Most gas heaters provide you with at least 8 gallons of hot water per minute — expressed as 8 GPM. Propane heaters can provide as much as 11 GPM and natural gas as much as 10.6 GPM. This is more than enough to meet the needs of the average household, and it’s excellent if you need plenty of hot water.

This is the reason why most houses with higher water demands decide to choose a whole house gas tankless water heater instead of electric. Gas is just more powerful and the ideal option if you live in a colder climate or have a larger house and want a single heating unit.

Pro: Operating Costs Tend to Be Lower


Although a gas water heater is more expensive to purchase and install, the investment will pay for itself after just a short time thanks to the lower monthly operating costs. The exact amount you’ll save by choosing gas over electricity will depend on where you live and whether you choose natural gas or propane. Whatever the case, you can expect to spend around 10 to 15 percent less than you would with an electric heater.

Con: Gas Water Heaters Are
Expensive to Purchase


A gas water heater costs at least twice as much as an electric heater. For a high-quality unit, you can expect to spend a minimum of $1,000. For a model with electronic ignition (to remove the need for a pilot light), you’ll need to pay closer to $1,200.

You can save money by purchasing a non-condensing system; however, these systems are less energy efficient. Rather than collecting and recirculating hot water vapor, they send the vapor through a flue and out of your house. Condensing systems, on the other hand, make use of this vapor to reduce wasted energy. As a result, although non-condensing units come with a lower initial cost, they are more expensive to operate and need an additional vent (which can add to installation costs).

Con: Installation Can Be
Complicated and Expensive

If your home does not already have gas lines, the cost to install them is likely to be prohibitively expensive. It may even be impossible to receive gas in your area. Even if you do have access to gas, changing from an electric water heater to a gas heater is nothing simple. For instance, your gas line may need to be a wider diameter to cope with the higher fuel needs. Plus, you may need to add a separate circuit breaker for the heater.

For homes at high altitudes, there are yet more installation requirements for gas water heaters. For instance, an HVAC professional will need to correct for the lower oxygen levels in the air to ensure that your heater is able to burn gas cleanly — this is applicable for both natural gas and propane. Without this installation, your gas heater could produce poisonous carbon monoxide gas.

If you’re considering an HVAC professional, this guide has some details on how to save money on HVAC installation costs.

Con: Proper Venting Is Critical

Another aspect of gas heater installation is venting. If this will be your first tankless gas heater, you’ll need to install all new venting. This is the case even if you are replacing a tank gas heater with a tankless unit. The chances are that the new heater will have different combustion air requirements and will need new venting ducts. Non-condensing units, for instance, need a category III venting system made from stainless steel. If you also find out that you need sidewall venting, that will also add to the cost and make the installation a little more complicated.

Con: Gas Heaters Pose a Higher Risk

Any damage to the piping or gas heater itself, no matter how slight, could cause a gas leak. There is always the risk that a leak may go unnoticed, which puts you at risk for carbon monoxide poisoning or an explosion in your home.

Con: Your Heater Will Need Yearly Maintenance

You’ll need to receive an annual inspection from an HVAC professional to ensure that your gas heater is running safely. The technician will examine the entire unit, paying particular attention to the combustion of fuel.

In addition to the annual checkup, you’ll need to flush your gas heater once or twice a year. This is essential to prevent the buildup of limescale and to receive the full lifespan from your heater. An HVAC technician can perform the service for you or you can flush the heater yourself.

Con: If You Run Out of Gas, You Run Out of Hot Water

If you live in a rural area and have your gas delivered to your home, there is always the risk that you could run out of gas. In the case this happens, you’ll have no hot water until the next gas delivery. However, if your gas comes through a pipe to your home, this is not an issue.

Con: Operating Costs May Rise in the Future

No matter whether you choose an electric or gas heater, the unit will likely last 20 years or more. If you plan to continue living in the same house, you need to look at your investment from a long-term view. Although electric power is more expensive than gas at the moment, it is expected to stay more or less constant, as has been a trend in the past. Gas prices, however, will likely continue to fluctuate, possibly rising much higher. In other words, whereas gas prices are lower than electricity at the moment, they could become more costly in the future.

When Is Gas Recommended?


You should opt for a gas water heater if you are looking for a single unit to supply your home with a large quantity of hot water at any time of the year, including during the coldest months. Furthermore, if you are able to afford the higher upfront costs, you may like to choose a gas heater to see savings on your utility bill over the long term.

Sure, gas tankless heaters have a few cons, but overall switching to this type of heater is a good option if you want a single whole house unit. Gas heaters are simply more powerful than electric heaters and they can supply a large home in a cold climate with plenty of hot water. Most electric units don’t have the heating capacity that gas units do.

Electric Tankless Water Heater Pros and Cons


Before you decide that gas is the winner in the natural gas and propane vs electric hot water heater debate, you need to consider the pros and cons of electric heaters.

Pro: The Initial Investment Is Low

You can find a high-quality electric water heater for as little as $500. Even top-range electric heaters cost little more than $700.

Pro: Installation Is Easy

Other than sufficient power, there are no requirements to install an electric water heater in your home. This means that the process is simple, fast, and less expensive than installing a gas heater. In fact, you may even be able to install your electric heater yourself — something that is impossible for gas heaters due to the importance of proper venting. Bear in mind, though, that some warranties are only valid if a professional install the heater.

Pro: Electric Heaters Meet Any Space Requirements

Tankless electric water heaters are the smallest type of all water heaters. They are about a third of the size of a gas heater, meaning that they are suitable even if you have limited space. Thanks to the simplicity of the unit and no need for ventilation, there are multiple options as to where you can install an electric heater. For example, one can fit easily in a closet or somewhere else out of the way.

Pro: Maintenance Is Minimal

Like a gas heater, you need to flush an electric heater — but only once a year rather than once or twice. As for other maintenance, all you need to do is keep the inlet screen filter clear of debris and obstructions. Fitting the heater with a pre-filter will help prevent sediment from entering and reduce maintenance needs still further.

Pro: Problems Are Easy to Fix

If your heater does suffer from a problem and requires fixing, troubleshooting and repair is simple and downtime tends to be short. In contrast, issues with gas heaters can be difficult to diagnose and fix because of the complexity of the heat exchanger.

Pro: Electric Heaters Have
Higher Thermal Efficiency

Electric water heaters tend to have at least 98 thermal efficiency — many are 99 percent or more. In comparison, gas heaters usually have between 80 and 85 percent. Similarly, electric heaters can have higher energy factor ratings than gas heaters. All this can offset the higher cost of electric power to some extent.

Pro: You Lower Your Carbon Footprint

Just how environmentally friendly an electric water heater is depends on its source of power. If you have the possibility to use solar, wind, nuclear, or another green energy source for your electricity, your electric heater will have a much smaller carbon footprint. If you’re using solar panels installed on your home, you’ll also cut operating costs. Whatever the case, electric water heaters are always more eco-friendly than gas heaters, as they do not burn fossil fuels themselves nor release greenhouse gases.

Pro: Electric Heaters Only Use
Power When Running

Electric heaters are on standby until you turn on your hot water, which means no wasted energy. In contrast, many (although not all) gas heaters have a pilot light on at all times, which means that they are continuously burning a small amount of gas.

Con: You May Need a High Amount of Power

If you live in a cold climate (this includes locations where temperatures drop low just during the winter months), you’ll need 200 AMP in electrical supply. Anything lower than that and you will not be able to maintain a high flow of water with an electric heater in the cold weather. It is possible to upgrade to a higher electrical supply, but such an upgrade will likely be costly.

Having said that, if you live in a location where the weather is warm all year round, 150, 125, or even 100 AMP electrical supply may be sufficient.

Con: Flow Capacity Is Lower

Even when you do have a high electrical service, the flow capacity of an electric heater in cold weather is lower than that of a gas heater. Electric heaters are only able to provide around 3 to 3.5 GPM in cold weather. This increases to 8 GPM in warm weather. For some households, the low GPM is insufficient to meet water needs. For instance, you’ll be unable to run two appliances that use hot water at the same time.

Cons: You’ll Have No Hot Water in a Power Outage

With an electric water heater, you’ll have no hot water if your power cuts out. However, you should bear in mind that a gas heater is not a failsafe option either — many models require electrical connections for their sensors and switches.

When Is Electric Recommended?


An electric heater is recommended when your home is already set up for an electric water heater, even if you currently have a tank heater. This is because it tends to be quite complicated to switch from electric to gas. An electric heater is also the better option if you’re looking to set up your heater immediately without a large expense. You’ll save money on both the purchase and the installation. Finally, it’s ideal if you want a heater for point of use or if your house or condo has smaller water demands.

The only major negative with choosing an electric tankless heater compared to a gas version is the hot water output capacity. Electric models simply can’t produce as much hot water as tankless gas units.

Electric Water Heaters vs Gas Heaters: Which Is Right for Your Situation?

home for sale

If your home lacks access to both natural gas and propane, the obvious answer to the electric versus gas tankless water debate is electric. Similarly, if you often suffer from power shortages, a gas heater is going to be the better choice, provided you choose a unit with no electrical components.

Another situation could be that your home electrical supply is unable to support an electric heater without first receiving an upgrade. This can be the case even when you currently have an electric tank heater, as tankless heaters require access to a far larger amount of power (even though they use less power overall). This is because a tankless heater provides you with several gallons of hot water in a matter of minutes, whereas an electric tank heater may take the entire day to heat the same quantity.

That being said, for many people, the issue is not so clear cut. The following chart explains which type of tankless heater, gas or electric, is better in a range of other common situations.

Gas Tankless
Electric Tankless
You have a limited budget to spend on your water heater
You want lower utility bills
You already have a gas heater
You already have an electric heater
Your building lacks a natural gas or propane service
You live in a cold climate
You want high water pressure at all times
You live in a rural area and have your gas delivered
You want the greenest option
You want to install the water heater yourself
You want hot water for multiple appliances at the same time
You have limited space
Your home has a low electrical supply

Now that you’ve figured out which is better for your home, a gas or electric water heater, you can start shopping for the right model. There are some major differences between different models. For instance, if you are concerned about high operating costs but would prefer an electric unit, you can find one with a great energy factor rating. Alternatively, if you’d prefer a gas heater but are concerned about maintenance, find one with an excellent track record and long warranty.

You can find all this information, and much more, in our review guides below:

Check them out now and upgrade your water heater!

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David Trinh
David is an expert in all things plumbing, heating, cooling, and water treatment. He got his start in the plumbing business working on fixing all types of home improvement issues including water leaks, broken toilets, appliance installation, and more. Over time, he learned a ton about installing and choosing the correct water treatment products for homeowners.

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