What are the Benefits of Tankless Water Heaters?

CT 3132A model by Summit Homes in Renton, WA.

CT 3132A model home by Summit Homes in Renton, WA. If you’re striving to create an energy efficient new home, consider adding a tankless water heater.

As federal, state and local building codes continue to tighten and evolve, the importance of working with your new construction or custom home builder to plan and build an energy efficient home has never been greater.   Thankfully, building technologies and materials continue to improve each year allowing for “greener,” more efficient homes to be built with minimal extra costs. 

One energy efficient building option that is gaining in popularity is the use of “tankless” water heaters. Capable of providing owners with noticeable utility cost savings each month, tankless units should be strongly considered when striving to construct the most energy efficient home possible.  

Differences between a traditional and tankless water heater system 

A traditional water heater will both store, and heat, a large volume of water enabling hot water to be available as needed.  This will occur through the use of an electrical heating element or gas burner system.  While this has been the standard for decades, the major drawback related to traditional units is they continue to heat the stored water regardless of usage. This includes times when an owner is not at home. 

Tankless water heaters seek to rectify this inefficiency by employing “on-demand” heating, which allows for water to be heated and distributed as needed versus stored and heated at all times. This on-demand heating negates the need to waste water running the tap as the water warms up saving you both time and money.  In addition, tankless units require far less physical space for installation and may be installed in locations not possible with traditional hot water heaters. Tankless water heaters have been shown to have longer overall lifespans compared to traditional units saving in replacement costs. 

Differences between gas and electric tankless water heaters

Selecting the correct tankless water heater for your new home: Gas vs. Electric

Tankless water heaters vary greatly in size and output capacity. From smaller point-of-use units that may be utilized to heat water for just one sink, to full size units that are capable of providing hot water to all faucets in the home; tankless units are capable of meeting all of your new home construction needs.  As with traditional water heaters, you will need to choose from an electric or natural gas model. Many tankless owners prefer natural gas models as they are capable of outputting larger quantities of hot water in a more efficient and cost effective manner.

Natural Gas Units

Pros: Capable of outputting more hot water at once compared to electric.  More cost efficient to operate overall compared to electric.  Cons:  Gas lines are not available at all new home sites.  Higher altitude locations may require additional installation measures to ensure gas/oxygen ratio is maintained. Electric Units


Pros:  Electric lines are available at every new home site.  Easy install for smaller one sink point-of-use applications.  No venting system required compared to gas models.
Cons:  Less overall hot water output compared to gas so larger unit may need to be installed to compensate.  Not as cost efficient as gas.  Additional electrical fuses and lines may need to be installed into the home depending on size of model selected.

Selecting the correct tankless capacity

There are two key factors to consider when sizing up the correct tankless unit for your needs: Gallons per minute (GPM) and the average ground temperature of your new home’s location.  


Gallons per minute: Ask yourself how many different faucet sources within your home may require hot water at the same time.  Obviously, a single occupant home will require far less hot water than a full size family, allowing for a smaller tankless unit to be installed. It is best to error on the side of too much hot water capacity compared to not enough, so attempt to predict the maximum hot water usage your household may require at any given time. 

Example:  Two showers occurring at once while a dishwasher runs in the kitchen and laundry is underway. Each of the four hot water sources in this example will require a specific “gallons per minute” output flow to simultaneously provide hot water within the home. As such, you will need to install a tankless water heater capable of matching the gallons per minute output required. The GPM rate is listed within the specifications of each tankless unit, allowing you to properly select the correct capacity size for your household’s individual needs.

Assuming you are installing a full size tankless system and not a one faucet point-of-use model, your next challenge will be to estimate if your area’s ground temperatures will require a larger unit to help compensate for colder seasons. Since the water flowing into your tankless water heater will be provided from pipes outside of your home, there will be a great variance in the temperature of the water flow depending on your geographical region. 

Example:  Water flowing into homes in Miami, Florida will almost always be warmer than water flow located in Bangor, Maine especially during colder seasonal months. Homes located in warmer climates will typically require smaller tankless units compared to more northern locations which will need to compensate for colder exterior water supplies. 

If your location includes many months of colder ground temps it is usually best to install a larger tankless unit to compensate for this challenge. It is also recommended you selected a gas unit since they are able to heat and distribute hot water faster and more efficiently than electric models. Since climates and geography varies greatly throughout the United States, it is advisable to speak with your local tankless retailer if your location includes long periods of colder ground temps in order to more accurately select the correct unit capacity. 

B. Ford spent more than a decade in the specialty appliance retail industry, and now devotes his time to freelance print and video content creation. 

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