Tankless water heaters (also called on-demand or instantaneous water heaters) heat water as it flows through the unit, eliminating the storage tank entirely. The trade-offs are clear: endless hot water, lower operating cost over a long ownership horizon, and a much smaller footprint — at the cost of higher upfront price and more demanding install requirements (gas line sizing, venting, electrical load). With roughly 1,581 monthly US searches for "tankless water heater," this is one of the most-shopped sub-types in the category.
Tankless splits into two fundamentally different products: gas tankless (condensing or non-condensing) and electric tankless. They serve different households.
Gas tankless dominates the residential whole-house market. Modern condensing gas tankless delivers 9–11 GPM peak flow at 0.94–0.97 UEF — enough for 4–6 person households running 2–3 simultaneous demand points. The flagship models include the Rheem RTGH-95DVLN, Rinnai RU199iN Sensei, Navien NPE-240A2, and AO Smith ProLine Tankless 10 GPM. Requires 3/4" gas line and PVC venting up to 100 ft.
Electric tankless handles point-of-use and warm-climate whole-house applications. Capacity is the limit — even 36 kW units cap around 6 GPM in cold-inlet climates. Best models in our catalog: the Stiebel Eltron Tempra 36 Plus (the flagship for whole-house electric), the EcoSmart ECO 27 (value pick), and the full Rheem RTEX ladder from 4kW to 18kW.
Condensing gas tankless needs: 3/4" gas line at most run lengths, PVC venting up to 100 ft, 120V outlet near the unit, service valves for annual descaling, and permit + licensed installer in most jurisdictions. Tank-to-tankless conversion typically runs $2,500–$4,500 including gas/venting/electrical work. Like-for-like tankless swap: $1,200–$2,200.
Electric tankless needs heavy 240V service. The 36 kW Tempra 36 Plus draws 150 amps and typically requires a 200-amp service panel — often a service upgrade in older homes ($1,800–$3,500 extra). Smaller RTEX point-of-use models (4–11 kW) run on a single 240V dedicated circuit.
Annual descaling is required on all condensing tankless to maintain manufacturer warranty. Scale buildup on the heat exchanger reduces efficiency and eventually triggers error codes (Rheem code 14, Rinnai code 14, etc.). Descaling kit (~$80) + 60–90 minutes of work, or $200–$300 for a service tech to do it. Annual inlet filter cleaning is also required.
The "cold-water sandwich" is the brief lukewarm spike when hot water restarts after a short interruption. Affects all pure-tankless (no buffer tank). Solutions: install a recirculation loop ($300–$500), add a buffer tank ($400–$700), or choose Navien's NPE-A2 line which has a built-in 0.5-gallon ComfortFlow buffer. Some brands ship recirculation-ready models — see Rinnai RUR98iN.
For most 3–5 person households on natural gas with long ownership horizons (8+ years), condensing tankless is the right pick — operating cost lower than any tank, no tank-shell failure risk, endless hot water. For all-electric households where heat pump fits, the heat pump water heater is the better long-term math winner. For short ownership horizons, manufactured-home installs without gas-line upgrade budget, or households with very intermittent use, tank water heaters often win on upfront economics. Click through to any brand+tankless page above for full lineup comparison.