Switching to a tankless water heater is moderately to highly difficult. While the process is fairly straightforward if you are just replacing an existing tankless unit, upgrading from a traditional tank heater to a tankless system is rarely a simple "swap". It often requires retrofitting your home's gas lines, venting, and electrical infrastructure to meet the unit's high-demand requirements.
Converting from a traditional tank to a tankless water heater costs between $2,500 and $6,500+ fully installed. The physical unit typically runs from $1,000 to $3,000, while the remaining balance covers labor and extensive system modifications like venting and gas line upgrades.
Drawbacks of Tankless Water Heaters
As discussed above, the biggest downside of owning a tankless water heater is its higher cost. The initial installation and unit costs are more expensive than a traditional storage-tank water heater.
Yes, you can replace a traditional tank water heater with a tankless unit, but it requires specific plumbing, gas, and electrical adjustments. While tankless models provide endless hot water and save space, upfront costs are higher, typically ranging from $2,400 to $5,400 depending on your home's setup.
For larger households, multiple showers, laundry, and dishwashing may run at the same time. Hot water demand could reach 10–12+ GPM. A high-capacity tankless water heater—or even two units installed in parallel—may be the best solution.
In freezing temperatures, condensate produced by a condensing tankless hot water heater can freeze inside the drain line, which can cause leakage, operation issues or shutoff. To help keep your indoor tankless water heater from freezing, use a direct vent exhaust & intake system.
Plumbers often hesitate to recommend tankless water heaters because they act like high-performance sports cars. Unlike traditional tank models that are "workhorses" and can function while mostly ignored, tankless units require precise installation, regular maintenance, and are highly sensitive to mineral buildup.
The answer is no — tankless water heaters can save money on your monthly electric bill because they're 8%-34% more efficient than storage water heaters.
A typical tankless water heater's lifespan often ranges from 15 to 20 years or more with proper care. In many cases, well-maintained systems can reach 25 to 30 years of service. That extended lifespan is one of the strongest considerations for homeowners researching how to choose a tankless water heater.
A gas tankless water heater (natural gas) is only marginally cheaper to operate than an electric tankless water heater due to the exceptionally high thermal efficiencies of the electric units (99%+).
A 10-minute shower typically uses 12 to 25 gallons of hot water, depending on your showerhead's flow rate and how hot you keep the water.
100-Pound Tanks
If you do not have your 100-pound tank filled on-site, it needs to be 3 feet from all building openings and 5 feet away from any ignition source, direct vent intakes and mechanical air intakes.
Gas tankless water heaters installed by December 25, 2025, might qualify for a $600 federal tax credit. The government is offered this 30% credit through December 2025 to help cover the cost of the unit and its installation. This tax credit comes from the 25C Energy Efficient Home Improvement Tax Credit program.
Home Depot’s total cost for a tankless water heater, including both the unit and standard installation, ranges from $𝟐,𝟒𝟎𝟎 to $𝟓,𝟒𝟎𝟎. Out of this total, labor alone typically accounts for $𝟔𝟎𝟎 to $𝟏,𝟖𝟓𝟎, though complex retrofits can push that labor number higher.
This problem usually comes down to capacity, heat production, or mixing issues inside your plumbing system. Sometimes the fix is simple, like adjusting your water heater temperature or flushing out sediment. Other times you may need a new mixing valve, an element replacement, or a different size water heater.
Heating and cooling systems (HVAC)—such as central air conditioning and electric furnaces—use the most electricity in a home, accounting for about 40% to 50% of your total energy consumption.
For a family of 4, the ideal electric tankless water heater requires an output of 20 to 36 kW (providing about 5 to 7 GPM), depending on your climate and if you plan to run two showers at the same time.
A tankless water heater usually goes cold mid-shower because the water flow drops below the heater's minimum activation threshold, or the system is overloaded by using too many fixtures at once. It can also happen if sediment blocks the filter or the unit is improperly sized.
Insulate your tankless water heater pipes to prevent freezing and bursts. When plumbing guides talk about “insulating your tankless”, they mean the pipes going to and from your unit. They're as susceptible to freezing and bursting as any other pipes in your plumbing system.
A tankless water heater cannot provide hot water faster than its ability to heat the water. While a tank unit can provide hot water for multiple uses at once, a tankless unit might not be able to support simultaneous usage, such as washing dishes, taking a shower and running a washing machine all at once.
As temps drop, the risk of having frozen pipes in your home increases. Typical high-risk areas for freezing include pipes within exterior walls, as well as exposed pipes that run through unheated or uninsulated areas such as attics or basements.
Shut Off The Water Heater
If you have a gas water heater, you can turn the heater off at the source and shut off the gas valve. If you have an electric heater, it can be turned off at the breaker. Once off, you can open the valve or spigot on the water heater to drain the water into a pail or bucket.
Yes, you should drip both hot AND cold. Otherwise, the area inside the tankless water heater between the cold water line and the heating element can freeze up and burst (happened to me in 2021 freeze). If you drip both slowly, it ensures all water is running through all the lines.