Electric vs. Gas Tankless Water Heater: Which is Better?

Josh Miller

Josh is a contributing writer to the site and former HVAC specialist.

Last Updated on May 8, 2021

Water heaters generally have a lifespan of just over ten years before you need to replace them. Tankless water heaters are known as instantaneous heaters because they produce hot water on demand. These systems are ideal if you enjoy the convenience of getting up in the morning and hopping in the shower without needing to wait an hour for the water to warm.

However, you need to decide if an electric or gas tankless water heater is the most suitable system for your needs. Both appliances have advantages that may make the decision easier depending on your lifestyle and requirements

Electric vs. Gas Tankless Water Heater Which is Better
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Table of Contents

Initial and Ongoing Costs

When considering the differences between an electric vs. gas tankless water heater, there can be significant differences in the upfront purchase cost. You can buy a high-quality electric water heater for around $500. It’s possible to purchase a gas model for the same price, but many efficient gas water heaters are likely to set you back approximately $1,000.

Installing an electric water heater isn’t that complicated, and you could even undertake the job as a DIY project. If you hire a contractor, it won’t take them as much time to connect an electric water heater as it would if you were installing a gas heater. However, remember that connecting a gas water heater to your gas supply is a job for a professional, and you must never attempt to perform this task by yourself. 

Although a gas water heater has more significant upfront costs, the system can pay for itself over time. Fuel costs vary depending on which state you reside in, but in general, gas is less expensive than electricity. If you follow the manufacturers’ maintenance and servicing instructions, you should expect your tankless water heater to last for at least a decade, so you’ll save money over the appliance’s lifespan.

Though they’re often cheaper, you also need to recognize that gas prices tend to be more volatile, whereas electricity costs remain relatively stable. If gas prices were to rise suddenly, you could see your utility bills increase sharply.

Tankless Water Heater Efficiency

The energy factor rating of tankless water heaters is a measure of their efficiency. When comparing the amount of hot water the heater produces per day to the amount of fuel it consumes, this determines the energy factor rating. The Federal Trade Commission (FTC) states that every new conventional water heater displays an Energy Guide sticker that declares the appliance’s efficiency. 

This sticker provides vital information such as the appliances’ estimated yearly cost, the tank size, and an Energy Star logo if it meets the certification standards. If you are trying to reduce your carbon footprint, you can use the information on this sticker to determine which tankless water heater is likely to be the most environmentally-friendly system.

Most electric tankless water heaters will be more efficient than gas water heaters of a similar size. In general, you can expect an electric system to achieve around 98% efficiency, and a gas water heater should reach approximately 85% efficiency. 

Tankless Water Heater Convenience

When determining the differences between an electric vs. gas tankless water heater, convenience is an important factor. Most homes have a reliable electricity supply, although this may vary in rural communities. 

If you are using an electric tankless water heater, you can enjoy using hot water as long as your electricity supply is available. The only issue would be in the event of a power cut, but if you have a back-up generator, there shouldn’t be any interruption.

When using a gas tankless water heater, you should always have access to hot water when connected to a natural gas supply. However, not all properties can tap into a gas supply and may need to purchase refillable tanks from a store.

If you don’t have enough gas, you’ll run out of hot water and only have a cold water supply until you drive to the store and refill your gas tank. This occurrence can be a major inconvenience, especially if the gas runs out in the middle of your morning shower. You could also find the store is closed or is waiting on a gas delivery. You might even be without hot water for several days.

However, gas tankless water heaters tend to heat more quickly than electric models because they use combustion. This process also means gas water heaters tend to have a higher first-hour rating (FHR) than electric water heaters. The FHR is a measurement of how much hot water the heater can produce in the first hour when the water in the tank is fully heated. 

This aspect could be crucial if you have a large household and many people use hot water simultaneously, or if multiple family members use the shower one after the other in the morning.

Tankless Water Heater Maintenance

Electric water heaters do not require as much maintenance as gas appliances. However, tankless systems can suffer from scaling due to contact with harsh minerals and chemicals present in the water supply. This process can affect the water heater’s efficiency and could eventually result in damage to the system.

You should aim to flush an electric tankless water heater at least once a year. If you live in an area with a particularly hard water supply, you may want to repeat the process two or three times per annum.

A gas tankless water system is more complex than an electric model, and you need to schedule an annual service by a qualified professional. A certified contractor can inspect the water heater components and repair parts that show signs of excessive wear and tear

The contractor will ensure your gas tankless water heater is operating efficiently and safely. All gas appliances come with the risk there could be a gas leak, so you must schedule a professional service visit every year.

Which Tankless Water Heater Type Should You Choose?

Determining whether an electric or gas tankless water heater is most suitable for your needs can be challenging. Both systems offer excellent performance, and your choice may come down to initial costs and long-term efficiency. Whichever appliance you purchase, you won’t be disappointed.

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