Welcome to this review of the best tankless water heaters in the US in 2021. You can quickly find the section you need most by using this convenient table of contents.

I’ve been working with tankless water heaters in the Heating, Ventilation, and Air Conditioning (HVAC) industry for over a decade. I’ve reviewed some of the most recent and popular models to demonstrate to you some of the great features that come with the best tankless water heaters. 

A tankless water heater is a great, modern alternative to a traditional water heater, but there are some pros and cons that you’ll need to understand before you make an informed purchase. 

Read on and we’ll discover if a tankless water heater could be the perfect solution to your water heating needs.

How Select The Right Size And Type Of Tankless Water Heater For Your Home

As the name suggests, a tankless water heater works without the need for a storage tank, unlike traditional water heaters. 

Modern tankless water heaters come in varying types and sizes, and not every type or size will be suitable for your home. I’ve put together this guide with the factors you should consider when you go shopping for your new water heater.

Fuel Type

Tankless water heaters work by burning one of three main different types of fuel to supply hot water, and each has its advantages and disadvantages.

Electricity

Electric tankless heaters are highly energy-efficient, around 98-99% since they can limit the flow rate more effectively than gas tankless water heaters, ensuring you waste only a tiny amount of the heated water you use. They’re comparatively compact and don’t require any ventilation, so you’ve got more freedom when it comes to installation.

They’re not great for colder climates, however, since they don’t have as high an output as their gas-powered counterparts.

Natural Gas

Natural gas tankless heaters are well suited for any climate, but they’re more expensive than an electric model and only around 80-85% energy efficiency, so you’ll waste more hot water. 

Gas prices are currently lower than electricity but are prone to fluctuation. This means you can’t always be sure if a natural gas water heater will be cheaper to operate in the long run.

Liquid Propane (LP)

Liquid Propane Gas can produce twice as much heat as the same amount of natural gas since it burns more slowly, but it’s also more expensive. 

The main advantage of LP gas is that it burns much cleaner than natural gas, releasing almost no greenhouse emissions, and so is a great choice if you’re conscious of your impact on the environment. 

Flow Rate Capability

The flow rate is very important when choosing the right size tankless water heater for your home. Flow rate is measured in gallons per minute (GPM). The larger your home and more often you’ll be using hot water, the larger GPM your tankless water heater should have.

A single bathroom apartment will only need a water heater with around 3GPM, whereas a large house with three or more bathrooms needs a water heater that can provide 10GPM. 

Tankless gas heaters will provide a temperature rise of around 70℉ when around 5GPM is used, a similar temperature rises to electric water heaters, though this temperature rises only needs 1.5 to 2GPM of water usage. 

Of course, each home is different and the exact GPM you need for your home may vary slightly from these guidelines. Aim for a GPM flow rate that’s slightly higher than what you think you’ll need during peak usage, and you won’t run out of hot water when you need it most.

Energy Factor Rating 

The Energy Factor (EF) rating of a tankless water heater rates its energy efficiency, calculated from the amount of hot water produced for each unit of fuel consumed. 

A higher EF rating means that a tankless water heater uses less fuel to achieve the desired water temperature than one with a lower EF rating. Using less fuel means wasting less energy, and will save you money off your energy bills.

A tankless water heater that’s been Energy Star certified has met the highest standards of efficiency as set out by the US Environmental Protection Agency (EPA). Models with this award will do more to save you money in the long run than a tankless water heater without.

Durability

A gas tankless water heater should last at least 20 years. Electric heaters use a heating element that will need to be replaced every 7-10 years. It’s a relatively easy job but can set you back $200-$300. 

That cost should easily be recouped by the extra efficiency of an electric water heater over its lifespan, though.

Electrical Power Usage

An electric water heater uses four 7,000-watt heating elements and needs around 120 amps of power to run. The average US household has a capacity of around 200 amps, so unless you already have a power system that can accommodate this increased demand, you may have to pay around $1500 to upgrade your home’s electrical system for electric units.

A gas tankless water heater, by comparison, only needs 15 amps of power to operate, so you won’t need to invest in the upgraded electrical system.

Whole House Or Point Of Use Water Heater?

Tankless water heaters work as either point of use or whole-house heaters. 

Point-of-use water heaters are designed to provide enough water for one or two faucets, or a hot shower. They’re compact, cheaper to install, and having a point-of-use water heater placed near the intended water source or sources provides a continuous stream of hot water. 

Whole-house heaters are larger, may run cold before the desired hot water starts to run, and cost more to install, but they are made to comfortably supply mid to large-sized homes.

If you only want to use a tankless water heater to supply one or two appliances, opt for a point-of-use unit. For entire homes, a whole-house unit is your best option.

Venting

Tankless hot water heaters that are powered by gas need special venting to expel exhaust gas outside, and they cannot share existing venting with any other household appliances.

Burning gas without proper venting would emit dangerous by-products like carbon monoxide into your home, so proper ventilation is essential for safe operation. This venting installation, depending on the size of your heater and any existing ventilation removal, can cost between $1,500 and $5,000.

It’s this cost that is often one of the most common reasons that people instead opt for an electric tankless water heater since they don’t need any form of venting to operate safely.

Condensing Vs Non-Condensing

Steam is produced as a by-product of burning fuel in a tankless water heater, and there are two different ways a unit can deal with this steam.

Non-condensing

Most tankless water heaters are non-condensing. Because a non-condensing unit only uses a single heat exchanger, any steam expelled as exhaust gas is very, very hot- usually 300℉ upwards! It takes expensive and elaborate ventilation to withstand these high temperatures, and since the steam is acidic, the pipes must also be corrosion-resistant and can cost thousands of dollars to install.

Condensing

Condensing tankless water heaters recycle this extra hot steam, and only vents it outside when it’s been used as part of the water heating process.

A condensing tankless water heater uses a second heat exchanger that loops steam back through the system before it is expelled. The steam condenses, which is collected and used as an additional heating source before being drained. The condensed steam is also much cooler than non-condensed steam, so standard PVC pipes are enough to withstand the relatively low temperature.

A non-condensing heater is the cheaper upfront option, condensing models will save you money in the long run because it recycles waste by-products and uses them to produce more heat.

Installation And Running Costs

When it comes to installation costs, the fuel type your tankless heater runs on is important. An electric tankless heater needs to be installed by a professional plumber, which can cost between $500 and $700, but you don’t need to worry about installing any ventilation.

If you don’t have the correct venting already installed that is necessary for natural gas or propane gas-powered heaters, you’re going to have to invest in that too. This can often cost between $1000 and $2000.

Electric units usually cost less to run than natural gas water heaters, but the exact figure can depend on the fluctuating gas prices that vary from region to region. Liquid propane gas is more expensive than natural gas, so a propane tankless water heater costs more to operate, but uses half as much to heat the same sized space.

The Best Tankless Water Heaters Reviewed

Best Tankless Water Heater 2021

German manufacturer Stiebel-Eltron has earned a reputation as one of the best tankless water heater brands, manufacturing quality-built, and reliable units.

As an electric tankless water heater, this model doesn’t require any venting which makes it simple and less expensive to install. It has a very sleek, modern, and compact design that would fit in small storage spaces, and wouldn’t even look out of place on view in a bathroom or kitchen.

The Tempra Plus 24 uses a modulating gas valve and a modulating flow sensor to automatically match your energy consumption to the hot water demand. You’ll still get instant hot water, but you’ll reduce your energy bills and save money while doing so.

4GPM is a decent flow rate for a small house or an apartment, but this unit manages to maintain this hot water flow rate even when multiple appliances are used. You don’t need to worry about getting a hot shower just because someone else is running the kitchen faucet. 

Temperature control is easy with the user-friendly digital display, and a 3-year warranty means you’re covered against any of the faulty wirings that a small number of owners have reported. 

What We Like:

• Doesn’t require ventilation
• Self-modulating flow sensor
• Digital water temperature control
• Sleek and compact design
• 3-year warranty 

What We Don’t Like:

• A small number of units reported as having faulty wiring

Best Point Of Use

The IR288 from Sio Green is made with low maintenance in mind. Since heated water flows through a tankless water heaters system, corrosion can be an issue for some owners. But not with the IR288, since it uses infrared tubes made of quartz to heat cold water without having it come into direct contact with metal. 

This model is designed to prevent sitting water, which, unlike a storage tank water heater, prevents bacteria and algae growth. You’ll always have high-performance and safe, clean water!

There are automatic or manual control features to choose from, so you can either take the guesswork out of water heating by letting it run automatically or have complete control over your hot water accurately to just one degree. 

You may need a more powerful unit if you live in a colder climate since this one only runs effectively if your inlet water flow averages 77℉. Otherwise, it’s the best tankless unit I’ve come across to use as a point-of-use heater.

What We Like:

• Excellent performance
• Compact design
• Easy to maintain
• No water contact with metals, so less corrosion
• Quick and easy to use

What We Don’t Like:

• Low flow rate not suited for mid to large-sized homes

Best For Warmer Climates

Rheem is a trusted and well-established brand, so it’s unsurprising to see that this tankless model is well-built and reliable, but you might not expect it to be so affordable.

This unit is quite powerful both in terms of flow rate and its capacity to heat water. In warmer environments where the incoming water temperature is higher, this model can run at 6GPM, with an impressive temperature rise that can heat water to between 80℉ and 140℉. That means you’ll get much hotter water, much more quickly. 

The RTEX-18 only needs two 40-amp breakers to run, ⅓ less of the 120amps of power needed to run most electric tankless water heaters. This saves you money off your electric bills and reduces energy wastage.

You can expect this unit to have a long lifespan even when used regularly and rigorously, thanks to the inclusion of durable copper-immersion heating elements that resist corrosion. That’s less maintenance to carry out too!

What We Like:

• Digital thermostat control
• Self-modulating
• High temperature
• Durable copper immersion elements
• Requires less power than other models to operate
• Flow rate of up to 6GPM in warmer climates

What We Don’t Like:

• Poor performance in cold climates

Best Liquid Propane Heater

This liquid propane-powered heater offers a great combination of efficiency and value. A high flow rate of 7.5GPM ensures you’ll have no problem providing instant hot water for multiple appliances at once across a larger-sized home. 

Dual heat exchangers mean this condensing unit is very energy efficient and saves energy off heating water to your desired temperature. Enhanced corrosion-detecting features mean you’ll be alerted to clean and maintain your unit before any deterioration can occur, saving you the cost of a pricey professional visit.

It’s also one of the few tankless water heaters to offer mobile connectivity, so you can conveniently monitor and adjust water heat levels from anywhere in your home!

Unfortunately, Rinnai likes consumers to use their own branded parts when it comes to installation, which is usually more expensive than other brands. That means it can cost more to install, though since it is the best liquid propane heater I’ve come across, I’d say it’s worth the money. 

What We Like:

• Great flow rate of 7.5 GPM
• Dual heat exchangers
• Mobile app connection
• Condensing unit
• Enhanced corrosion detection

What We Don’t Like:

• Can be expensive to install with brand-specific parts

Best For Larger Homes

This tankless unit is designed to be powerful and energy-efficient in every way. Its higher-than-average 10GPM flow rate means you’ll have all the hot water you need for a larger home, on-demand, at any given time.

If safety is a priority for you, then this model is a good option since it comes with multiple automatic safety features. A hi-limit switch protects the electric heater from extreme weather conditions and environments, an overheat cut-off switches the unit off if it’s exposed to excessive heat, and internal freeze protection stops the unit performance from suffering during the winter. 

Copper-alloy heat exchangers maximize efficiency so you’ll make considerable energy savings, while advanced diagnostics and a user-friendly LCD screen mean it’s easy to troubleshoot your heater.

The expensive installation and a temperature drop that causes cold water to run for a few seconds when used in colder conditions can be an issue for some, but this is a sound option if you’re looking to provide hot water on demand for multiple appliances at once in a larger home.

What We Like:

• Advanced safety features and diagnostics
• Condensing technology
• Copper alloy heat exchanger
• Compact design
• Powerful flow rate of 10 GPM

What We Don’t Like:

• Expensive installation
• Temperature drop upon initial use

Best For Small Homes

The 5.3GPM flow rate is average for a small house or an apartment, and this unit will work well in those types of homes as long as you live in a warmer climate with a higher incoming water temperature.

Self-modulating technology automatically adjusts energy usage to match the hot water demand. This makes the unit an outstanding 99% efficient, so you’ll waste virtually no water at all.  

Discretion is the keyword when it comes to this nifty little model. It’s sleek and compact, which is just as well since due to the design of this unit, it needs to be installed below the level of the lowest faucet in your home. But since this unit is so small, it’s easy to install in a cabinet, basement, or under the kitchen sink. 

It comes with a very nice blue finish though, and it seems a shame to hide it away! It’s a great option for small homes that don’t need a huge water flow rate.

What We Like:

• Self-modulating
• Compact and sleek
• Very nice visual design
• Great for use in warm climates or as a point of use heater

What We Don’t Like:

• Not well suited for larger homes
• Needs to be installed lower than your lowest hot water outlet

Who Can Install My Tankless Water Heater?

You’ll need a licensed electrician or plumber to carry out the professional installation of your tankless water heater.

They’ll first need to uninstall any existing traditional tank heater pipes, which can cost around $60. Then comes the installation of special venting and gas lines if you’re installing a gas heater. 

Installation can cost between $1500 and $3200, depending on the brand, size, and type of your tankless water heater.  You can install multiple tankless water heaters in a larger household since they are small enough to fit in cabinets, closets, or even a kitchen or bathroom itself.

Tankless Water Heater: Frequently Asked Questions

How Long Does A Tankless Water Heater Last?

With proper maintenance, your tankless water heater should last around 20 years and can last even longer since they have parts that are easy to service or replace. Traditional gas or electric tank heater will only last around 10 years in comparison.

What Maintenance Is Required On A Tankless Water Heater?

A tankless heater doesn’t require much maintenance over its lifespan, though how much hot water you use can affect this.

You should use a water softener to avoid hard water erosion and scale buildup that can lead to system failure and lower efficiency. Tankless water heaters also need to be periodically flushed to prevent calcium buildup, which can force the heat exchanger to become overworked and eventually replaced at your expense.

How Often Do You Need To Flush A Tankless Water Heater?

Your tankless hot water system should be flushed once a year, or more frequently if the water quality is poor. You can enlist a professional to flush your tankless water heater, but this can cost between $100 and $200 and is a relatively simple task to complete yourself.

My Final Thoughts 

Tankless water heaters provide a great alternative to tank heaters and the best models are energy-efficient, eco-friendly, and will provide an unlimited supply of hot water to your home. 

They can also have high unit and installation costs. Providing sufficient hot water for homes in colder climates seems to be an overriding issue with quite a few models, so you’ll have to shop carefully if that’s the case with your home. 

The best model I came across when I put this review together is the Stiebel-Eltron Tempra Plus 24, which combines famously solid German engineering with a sleek, compact design that would fit anywhere in your home. 

The advanced self-modulating flow sensor perfectly matches energy consumption to the current hot water demand, so you’ll never waste more energy or money than you need to use. It offers great overall value for a tankless water heater of this type and size.

Ultimately though, if you’re looking to make the switch to a tankless water heater in 2021, there are enough quality options available that you’ll find something that’s perfectly suited to your needs!