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Best Tankless Water Heater for On-Demand Hot Water

If you want a constant supply of hot water while saving money on your energy bill, the best tankless water heater may be an ideal choice.

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Tankless Water HeaterVIA MERCHANT

Unlike storage water heaters, the best tankless water heater heats water directly. Also known as “on-demand” units, tankless hot water heaters take up less space than storage water heaters and use 30 to 50 percent less energy, which translates to lower energy bills.

If you’re ready to upgrade your water heater, take a look at our finds for the best tankless water heater options and choose which unit suits your needs.

1 / 5

Rinnai Ru130in Condensing Tankless Hot Water Heatervia merchant

Best Overall Tankless Water Heater

Rinnai Condensing Tankless Water Heater

For the average family of four, you can’t go wrong with the Rinnai Condensing Tankless Water Heater. This natural gas model is our pick for the overall best tankless water heater because it can heat up to seven gallons per minute of water.

However, running it around four gallons per minute will cost you only about $130 a year to operate. It’s Energy Star-certified, and you’ll have enough water to run the dishwasher and two showers simultaneously. If you have higher water needs, there are models under the same line capable of up to 11 gallons per minute.


  • Costs little to run
  • Comes with a warranty
  • Wi-Fi compatible
  • Energy Star-certified


  • Some buyers say the fan is loud

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2 / 5

Eco Smart Water Heatervia merchant

Best Budget Tankless Water Heater

Ecosmart Tankless Electric Water Heater

You’ll get hot water on demand without blowing your budget with the Ecosmart Tankless Electric Water Heater. This electric unit can heat three gallons per minute when the incoming water temperature is as low as 37 degrees Fahrenheit, making it a excellent option for homes in the Northern United States or in homes with a large tub or Jacuzzi. The digital temperature control allows you to set your temperature in one-degree increments.

“We just got our electric bill, and it dropped by 62 dollars. We love the space we save and the fact that now we can finally fill the tub without running out of hot water,” says five-star reviewer Shawn Roberts.


  • Affordable
  • Simple to install
  • Excellent for Jacuzzis
  • Easy to adjust temperature


  • Not Wi-Fi compatible

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3 / 5

Stiebel Eltron Tankless Heatervia merchant

Best Electric Tankless Water Heater

Stiebel Eltron Tankless Water Heater

If you’re looking to go electric and wondering about the best tankless water heater for the money, consider the Stiebel Eltron Tankless Water Heater. This model has an advanced flow control feature to keep water consistently hot during ongoing use, so your shower won’t fluctuate in temperature or go cold.

Plus, its digital display lets you see the accumulated cost savings, so you can see how much money you’ve saved by installing a tankless water heater. The 36 Plus model has a flow rate of seven and a half gallons per minute in warmer climates, which is plenty for most homes.


  • Electric
  • Space-saving design
  • Dependable cost savings
  • Buyers say it is easy to install


  • Some buyers have to increase the capacity of their breaker box to meet power needs

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4 / 5

Rinnai V94in Non Condensing Natural Gas Tankless Water Heatervia merchant

Best Gas Tankless Water Heater

Rinnai Natural Gas Tankless Water Heater

On the fence about upgrading to a gas-powered tankless water heater? Consider this: You’ll likely never run out of hot water with the Rinnai Natural Gas Tankless Water Heater, which has a capacity of almost 10 gallons per minute. That translates to six running water fixtures at once, which is enough hot water for even the busiest homes. Plus, it’s the size of a small suitcase, so that it can fit almost anywhere and it comes with smart options if you purchase the separate Rinnai module for Wi-Fi connectivity.

“Produces an endless supply (>9 gallons per minute) of hot water at a constant 120 Fahrenheit. So far (90 days) no issues. The old tank water heater struggled to fill a jacuzzi tub. This does so with ease and very quickly due to the high flow rate,” says verified reviewer Dickie Coon.


  • Gas-powered heater
  • Plenty of power for busy homes
  • Compact size
  • Wi-Fi compatible


  • Some buyers have trouble with installation

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5 / 5

Bosch Electric Mini Tank Water Heatervia merchant

Best Supplemental Tankless Water Heater

Bosch Electric Mini-Tank Water Heater

If you have a spot in your home that may require some extra “oomph” when it comes to hot water, the Bosch Electric Mini-Tank Water Heater is a tremendous point-of-use option and an Amazon top seller. This mini tankless water heater doesn’t require any professional installation and fits under your sink to provide more hot water where you need it. The unit offers up to four gallons of hot water at that fixture, so it cuts down on lengthy wait times before doing the dishes or taking a shower.


  • Can be added wherever extra hot water is needed
  • Affordable
  • Easy to install
  • Great supplemental option


  • May lose storage space if used under the sink

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What to Consider When Buying a Tankless Water Heater

When looking for the best tankless water heater for your needs, you’ll need to consider a few things.

First, do you want to go with electric or gas? Both options offer benefits, but switching from a gas-storage water heater to an electric tankless model may require some electrical and plumbing updates (and vice versa).

Second, think about how much hot water you’ll need at a time. If you’re going to run two showers, the dishwasher and the laundry machine at once, you may need a model that produces a higher volume of gallons per minute. Some tankless models have smart capabilities, which you may find handy.

Finally, consider the purchase price. While tankless water heaters will save you money in the long run on your energy bills, some may be pricey in upfront costs.

Types of Tankless Water Heaters

  • Gas tankless water heaters are safer than conventional water heaters and often last longer. However, they are prone to scale buildup and may need cleaning.
  • Electric tankless water heaters are highly efficient but require a lot of electricity. For example, a conventional electric water heater uses about 5,000 watts of electricity, while the tankless version can use more than 25,000 watts.

How We Found the Best Tankless Water Heaters

As shopping experts, our only job is to help you find a winning product. We start with the research and reporting basics—what products are made of, what they look like and how much they cost—to ensure that we’re only recommending the buys that are worth your time and money. Then, we research the features that speak to the product’s quality, taking advice from industry insiders and subject-matter experts on what makes a product a smart value (or worthy of a splurge). Finally, we do the work of combing through user reviews to see how real people interact with the product, and if it stands up to the test.


How do tankless water heaters work?

Tankless water heaters have no storage tank. Instead, they heat water directly only when you need it. Turn on hot water, and a supply of cold water travels into the tankless unit and heats up via an electric element or gas burner. This gives you a constant supply of hot water.

Is there a federal tax credit for tankless water heaters?

If you install a tankless water heater, you may qualify for a federal tax credit under the Energy Efficient Home Improvement Credit or the Inflation Reduction Act of 2022. For instance, Energy Star-certified water heaters that use natural gas could get you up to $600 back if installed in 2023. If you installed one in 2022, you could get up to $300. The manufacturer should also have information on what models qualify for various credits.

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Rachel Brougham
Rachel Brougham lived through a major home renovation in 2019, knows the ups and downs of home improvement, and loves sharing tips with readers. A veteran journalist of both print and television, she’s won several awards for her writing and has covered everything from the environment and education to health care, politics and food. She’s written for several publications beyond newspapers including Bob Vila, Taste of Home and Minnesota Parent, and she currently writes a weekly syndicated newspaper column. Her memoir, Widowland, about the sudden loss of her husband, was published in 2022. She specializes in everything from home decor and design to lawn and garden, product reviews and pet care. When she’s not writing, you can usually find her tending to her garden (both vegetables and native plants), playing with her dog, watching sports with her family or getting some exercise. A native of Michigan, she currently lives in Minneapolis. An avid user of Instagram, you can follow her @RachBrougham.