Electric Vs. Gas Tankless Water Heater

Updated February 21, 2017

Tankless water heaters are common in both Europe and Asia. A tankless heater uses either electricity or gas to heat water on demand. It doesn't use a tank of heated water, and as such is more energy efficient and smaller. If no hot water is used, no energy is used. There are a number of things to consider when you are trying to decide on either an electric tankless hot water heater or a gas tankless heater.

Gas Lines

The first thing to look at when considering a gas tankless hot water heater is the presence or absence of gas lines in the desired installation location. If there isn't an existing gas line, look to see if the location will support the installation of a gas extension feed. If gas lines are not available and installing them isn't an option, an electric hot water heater may be your only option.


Gas hot water heaters create fumes that must be vented outside. You must be able to install exterior ventilation, a chimney, either through a wall or a ceiling. In some cases, a gas hot water heater can be mounted on a wall outside of the room or home, with the hot water being fed through normal hot water pipes. If ventilation isn't possible and mounting the heater outside isn't an option, an electric tankless heater is your only option.

Electrical Circuit

Electric tankless hot water heaters use a lot of power when in operation. Most require 220V electric service on a 200A circuit. Most household electrical circuits are 110V and between 15A and 20A. It is likely that you will have to have a new electrical circuit run for an electric tankless hot water heater.

Cost of Purchase

Electric tankless heaters are usually cheaper than gas heaters. Electric heaters cost somewhere between £325-700, while gas systems are £650 or above. This cost does not include installation. The cost of installation will define the total cost of both systems and will vary greatly depending on how and where the system is installed.

Cost of Operation

The overall cost of operation will depend greatly on energy costs in your area. In general, however, gas tankless heaters will cost 10 to 15 per cent less to operate than electric hot water heaters. In some areas, gas is very expensive because of a lack of supply. In those areas, electric may be cheaper than gas.


Gas and electric tankless hot water heaters differ somewhat in efficiency. An electric hot water heater will most likely convert 98 per cent of its energy directly to heat for the water. Gas efficiencies are 80 to 85 per cent.

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About the Author

Although he grew up in Latin America, Mr. Ma is a writer based in Denver. He has been writing since 1987 and has written for NPR, AP, Boeing, Ford New Holland, Microsoft, RAHCO International, Umax Data Systems and other manufacturers in Taiwan. He studied creative writing at Mankato State University in Minnesota. He speaks fluent Mandarin Chinese, English and reads Spanish.