Best Tankless Water Heaters

Updated January 2022
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We recommend these products based on an intensive research process that's designed to cut through the noise and find the top products in this space. Guided by experts, we spend hours looking into the factors that matter, to bring you these selections.

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Buying guide for best tankless water heaters

Traditional water heaters are fickle friends in many ways. During heavy use, the 40- or 80-gallon reservoir can be emptied faster than it refills and heats, leaving someone in a cold shower. Heating and maintaining that much water at once isn’t very energy efficient, and if the heater suffers a catastrophic failure—that’s a lot of water pouring into your attic or garage.

While water heaters have been a staple in homes for decades, their inefficiencies have led to a new breed of home hot water systems—the tankless water heater. The tankless water heater is a mega-sized version of an electric tea kettle. There is no tank of standing water. Hot water is supplied through an element that heats the water just before it’s used by a cook who needs hot water for making the evening meal or when it’s time for the kids to take a bath before bed.

If you’re ready to buy a tankless water heater, please check out our five top selections. If you’d like to know more about what makes tankless water heaters so special, we invite you to read on and take advantage of our shopping guide.

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Do an inventory of the points in the home where hot water is likely to be needed simultaneously, and choose a tankless water heater with adequate capacity.

How does a tankless water heater work?

Tankless water heaters only heat water when you need it, so minimal energy is wasted.

The beauty of a tankless water heater is its ability to provide a continuous supply of hot water. Compared to a traditional water heater, a tankless option is more efficient in its delivery and is a big energy saver. A tankless water heater is a heating element (either gas or electric) that connects directly to the home’s water pipes. When a hot water tap is turned on, water flows through the element and is sent to its destination.

Electric heating elements provide a slower flow rate than gas-powered models. A sensor in the heating element turns on the burner, and as water enters the unit, a thermostat springs into action to get the water quickly to the desired temperature.

Gas-driven tankless water heaters need to ventilate through the ceiling and outside the house. Larger tankless systems, called gas condensing units, are armed with a second heating system. These provide more hot water to homes wanting to simultaneously use a dishwater, shower, and kitchen sink.

Tankless water heaters considerations

Several factors go into deciding whether a gas-powered or electric-powered tankless water heater is right for you. The most important is the availability of a gas line at the installation point. If you don’t already have a gas feed in the house, you’ll have to have the appropriate type of service installed. It may be simpler and most cost effective to just go with an electric heater.


Electric water heaters are less expensive. In some cases, they can cost as little as $500. Base prices don’t usually include installation, however, so be sure to factor that in.


Gas models are easily more efficient than traditional tank-based units. However their efficiency peaks somewhere near 85%,while electric models are more than 90% efficient. Even though fuel is general less expensive than electric energy, many select the electric model because they last longer and are cheaper to install.


When installing a gas-powered tankless water heater, new vents, and air supply ducts must be put in place to ventilate the byproducts of burning gas. If placed in a tight space, installation can be more rigorous, due to the need of alternative venting, such as side-wall venting.

Electric models are often smaller and can be placed in smaller spaces where a gas tankless might not fit. An electric unit can be put closer to the area where hot water is needed, which adds to efficiency and customer satisfaction. The only additional cost for an electrical tankless unit would be if a house’s electric service would need to be updated or remodeled.

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Did you know?
A water heater is the second most energy-sapping appliance in the house, after climate control systems.

Flow rate

It’s important to buy a tankless water heater with enough capacity to meet all your simultaneous hot water demands. A small model won’t be able to supply a clothes washer, shower, and kitchen sink all at the same time. Before you purchase, create a list of hot water uses in your home and try to anticipate scenarios where multiple locations will need hot water. Check the manufacturer ratings and customer reviews to determine whether a model you’re considering will provide enough water at the most high-demand times.

Indoor vs. outdoor

No convenient space inside the house for a tankless water heater? Some models are designed for mounting on the outside of the house, taking up space that you otherwise might not be using.

Maintaining your tankless water heater

If it’s low maintenance you want, an electric tankless water heater is your best bet. All that is required is the need to periodically change the unit’s screen filter. The safety and efficiency of a gas-powered model’s operation should be inspected once a year.

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Did you know?
Tankless water heaters can last up to 20 years, which is about twice that of a standard hot water heater.


  • Under $100: While there are models in this low price band, they come with some limitations—some are only powered by propane (which adds complexity to the installation and ongoing use) while others are geared for only warmer climates or for instances where only one usage (such as a sink) is needed.

  • Under $150: In this slightly higher price range, again there are models that use propane fuel or built for a single purpose such as an outdoor shower. However, for under $150, you begin to find some electric tankless models, albeit at a lower wattage, which translates to less power.

  • Under $250: Electric models in this range deliver better performance, such as greater efficiency and more water flow on demand. Some of these models do require installation close (within 50 feet) of the point of use, but that is offset by the fact most claim to be easy self-installs.

  • Under $500: To move up to gas-powered tankless models, the price jumps significantly. These models will provide greater flow capacity, and they’re more likely to offer additional features, such as digital temperature setting.

  • Under $2,000: If you want a unit that will provide a lot of hot water on demand with a strong flow to multiple points of use, it will cost you. Along with the everyday excellent performance, these premium models typically have longer warranties, top-tier customer service, and great durability.
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Tankless water heaters are relatively new, and local installation codes may have changed recently. Check with a professional or your municipal offices to ensure yours meets code requirements.


Q. Does a tankless water heater change the way I use the shower?
For best results, manufacturers recommend that you turn the hot water tap on full, allow the water to heat, then cool the delivered water by opening the cold water tap. This allows the tankless water heater to run at top efficiency, while you make fine adjustments via the amount of cold water being mixed in.

Q. How long does it take for the water to actually get hot?
Most tankless water heaters reach their peak temperature and start heating the water within seconds of the tap being activated. The slight lag you experience in receiving hot water depends mostly on the distance between the heater and the tap.

Q. If the power is out, will my electric unit still work?
Most electric tankless water heaters will still allow the water to flow when your power is out, but the heating element won’t warm unless you have a battery backup or some other source of electricity.

Q. Are tankless water heaters impacted by altitude?
Altitude matters for tankless units. At 4,000 feet, a gas unit begins to lose its efficiency at a rate of 4% per 1,000 feet. Electric models are not affected.

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