Tankless Water Heater Guide


Tankless water heaters offer homeowners a space-saving and energy-efficient way to heat as much water as they need, whenever they need it! The average American home can expect to save $100 per year by installing a high-efficiency tankless water heater. If it’s time for a new water heater, explore all your options with Daniel’s – your trusted Austin plumbing company!

What is a Tankless Water Heater?

Often referred to as an on-demand water heater, this relatively new equipment eschews the traditional large storage tanks associated with conventional water heaters. Instead, tankless water heaters heat water as it flows through it, distributing hot water to the rest of your home. This shapes the most critical benefits of tankless water heaters:

Lower energy costs – High-efficiency tankless water heaters only use energy when using hot water. After your shower or load of laundry, they shut off. Traditional water heaters run on and off to keep a large volume of water at a specified temperature, even if your family doesn’t need it immediately.

Space-saving design – Water heater storage tanks take up a lot of space. Tankless water heaters can be installed almost flat against a wall or even outdoors, freeing up valuable floor space in your home.

Is a Tankless Water Heater More Efficient? By How Much?

Tankless water heaters use approximately 34% less energy than conventional water heaters. That energy saving adds up quickly because of the substantial share of total energy expenses incurred by heating water – up to 18% of your monthly bill!

How Much Does a Tankless Water Heater Cost?

Most tankless water heaters are more expensive than traditional storage tank water heaters. Some are even twice as much, although prices have declined in recent years. The average purchase price is:

  • Electric - $500-$1,500
  • Gas - $1,000-$1,500

The cost to install a tankless water heater varies by size, type, installation location, and fuel source. Contact Daniel’s today for an at-home inspection and estimate.

The Best Types of Tankless Water Heaters 

The best approach to starting your research is to divide options based on fuel type and functionality. The right choice for your home will be determined by several factors, including:

  • Existing electrical wiring and capacity
  • Existing propane or natural gas piping
  • Preferred installation location

Condensing Tankless Water Heaters

Condensing units recycle heat from the unit’s exhaust to heat water. This reduces the need for flues or exhaust piping, which is especially useful if you’re installing the unit in a room that isn’t immediately next to the outdoors. Condensing tankless water heaters tend to be more expensive to purchase but less costly to install. They’re also slightly more energy efficient than non-condensing models.

Non-condensing Tankless Water Heaters

Non-condensing units vent exhaust outdoors through stainless steel pipes. The need for these pipes and exhaust vents increases the installation cost, though most units are less expensive than similarly sized condensing alternatives. Non-condensing models use heat exchangers to heat water before it’s dispersed throughout the home.

Propane or Gas

Propane and natural gas tankless water heaters tend to be more expensive to install. This type of water heater requires a wider-gauge gas pipe than is typically installed in residential homes, which usually requires some additional installation work. In most of the country, gas is less expensive per kilowatt hour than utility-sourced electricity, meaning your energy bill will cost less every month.


While more efficient than gas, electric tankless water heaters do cost more per month to operate in most parts of the US. There are some perks, however. Electric units require less maintenance, don’t require a ventilation system, and can be installed in small spaces. They’re less expensive to install as well.

Make the Right Upgrade with Daniel’s

Austin families rely on Daniel’s for professional and reliable HVAC and plumbing services in a pinch. We’re also a valuable resource for those looking to make intelligent, energy-saving investments in their home that lower monthly costs in the long run. Trust our experienced team to help select, install, and maintain your tankless water heater. Schedule an appointment online or call (512) 456-3570 today.