If you’re shopping, you’ll see popular models like the EcoSmart ECO 27 Electric Tankless Water Heater and similar units from other major brands.
Tankless Water Heater Disadvantages
Despite their benefits, tankless water heaters are not perfect. There are some important drawbacks to consider.
“On the downside, tankless systems have a higher upfront cost, both for the unit and installation,” says Robinson. “They also may not keep up with high-demand households unless you install multiple units, which can get pricey.”
Common downsides include:
- Limited capacity on small units: Smaller tankless units won’t produce enough hot water for most households. Many can only serve one faucet or shower at a time, which is a problem if you want to shower while the dishwasher is running.
- Cost of whole-house units: Larger units that can handle the demand of a full family are available, but they are significantly more expensive.
- Special venting requirements: High-powered burners need a dedicated, sealed vent system, which requires professional installation. This adds to the project cost.
- Gas line upgrades: Natural gas models often require a larger diameter gas pipe, which can further increase installation expenses.
- Electrical upgrades: Some larger units may require an electrical system upgrade to handle the additional load.
Representative models in this category include units like the Rheem RTEX-13 240V Heating Chamber Residential Tankless Water Heater, along with many others.
Electric vs. Gas Tankless Water Heaters
The biggest difference between electric and gas tankless water heaters is their efficiency and power.
- Electric tankless water heaters: Typically around 98% or more efficient.
- Gas tankless water heaters: Generally around 80–85% efficient.
“Choosing between the two often depends on your home’s size and existing utilities,” says Robinson. “Electric tankless heaters are cheaper upfront and easier to install, but they’re better suited for smaller homes or as point-of-use systems. Gas models, on the other hand, are more powerful and better for whole-house use but require venting and may cost more to install.”
If you’re replacing an old water heater, a gas tankless unit can be cheaper to run long term and will typically last longer. But electric units win on simplicity and efficiency.
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