Should You Install an Electric Tankless Water Heater?

Electric tankless water heaters come up a lot when homeowners are researching ways to save space, go all-electric, or get “endless hot water.” On paper, they sound great. No tank. Small wall-mounted unit. No gas line. No venting.

In real life, most plumbers are cautious about electric tankless water heaters, especially for whole-house use. The reason is simple: they usually require a huge amount of electrical capacity and still may not deliver enough hot water for normal household use.

This does not mean electric tankless water heaters have no purpose. They can make sense in certain point-of-use applications, such as a remote sink, small office, ADU, or a single low-demand fixture. But for a full-size house with showers, tubs, laundry, dishwasher use, and multiple people, electric tankless is often the wrong tool for the job.

The main problem: heating water instantly takes a lot of power

A regular tank water heater stores hot water ahead of time. A tankless unit has to heat the water as it passes through the heater. That means it has only a few seconds to raise cold incoming water up to usable shower temperature.

That takes a lot of energy.

With tankless water heaters, the important numbers are flow rate and temperature rise. Flow rate is how many gallons per minute the unit can heat. Temperature rise is the difference between the incoming cold water and the hot water temperature you want.

For example, if the incoming water is 50°F and you want 120°F hot water, the heater needs to create a 70°F temperature rise.

That is where electric tankless units struggle. A household may need 4, 5, 6, or more gallons per minute during peak use. Two showers at the same time can easily exceed what many electric tankless units can comfortably handle, especially when incoming water is cold.

“Endless hot water” does not mean “unlimited hot water”

This is one of the biggest misunderstandings with tankless water heaters.

Yes, a tankless water heater can keep heating water as long as there is enough fuel or electricity. But it still has a maximum flow rate. Once you exceed that flow rate, one of two things happens.

The water gets cooler, or the unit restricts flow to maintain temperature.

That may be acceptable for one shower. It may not be acceptable for a 3,000 square foot home where someone wants to shower while the dishwasher is running, laundry is going, or another bathroom is being used.

With gas tankless, the burner has a lot more heating capacity. With electric tankless, the unit is limited by the home’s electrical service, breaker space, wire size, and the size of the unit itself.

The electrical requirements can be extreme

A standard electric tank water heater usually uses a 30-amp double-pole breaker.

A whole-house electric tankless unit can require 100 amps, 120 amps, 150 amps, or more. Some models require multiple double-pole breakers and multiple heavy-gauge wire runs.

That is a major issue in many homes.

A homeowner may already have a 100-amp or 200-amp panel. If the electric tankless unit alone can draw over 100 amps, there may not be enough capacity left for the rest of the house, especially if the home also has electric HVAC, an electric range, an EV charger, a dryer, or other large loads.

In some cases, installing an electric tankless water heater means the homeowner also needs electrical upgrades. That can include a larger panel, more breaker space, new wiring, or even a service upgrade. Once those costs are included, the “simple wall-mounted water heater” may become one of the most expensive options.

Electric tankless is usually not the same as efficient electric

Another common misunderstanding is that electric tankless must be very efficient because it does not store hot water.

Electric resistance heat is close to 100% efficient at turning electricity into heat. But that does not automatically make it the best electric water heating option. A heat pump water heater uses electricity differently. Instead of creating heat directly, it moves heat from the surrounding air into the water. That is why heat pump water heaters can use much less electricity than standard electric resistance water heaters.

So if the goal is an all-electric home, the better conversation is usually not electric tankless versus gas. It is electric tankless versus heat pump water heater.

For most full-size homes, a heat pump water heater is usually the better electric option. It stores hot water, has better real-world capacity for normal household use, and uses far less electricity than straight electric resistance heating.

When electric tankless can make sense

Electric tankless can still be useful in the right situation.

It may make sense for a single sink that is far from the main water heater. It can work in a small studio, tiny home, office, shop bathroom, or low-demand ADU. It can also be used as a booster in some specialty situations.

The key is that the demand needs to be small and predictable.

Where electric tankless usually gets homeowners in trouble is whole-house use. A 3-bedroom or 4-bedroom home with multiple bathrooms is a very different situation from a handwashing sink or a small detached unit.

Better options for most homeowners

For a home with natural gas available, a gas tankless water heater may be an option if the gas line, venting, condensate drain, and installation conditions are right. Gas tankless is much better suited for higher flow rates than electric tankless.

For an all-electric home, a heat pump water heater is usually the stronger option. It gives the home stored hot water, better peak-use performance, and much better electrical efficiency than straight electric resistance water heating.

For larger homes, it may also be worth planning the plumbing layout carefully. If the home is new construction, this is the time to think about a dedicated recirculation line, water heater location, fixture layout, and whether one central system or multiple systems make more sense.

Our recommendation

We generally do not recommend electric tankless water heaters for whole-house use unless the home has been specifically designed around that system and the electrical service has been confirmed by a qualified electrician.

For most homeowners, electric tankless looks better online than it performs in the real world. The unit may be small, but the electrical demand is not. And even after the electrical work is done, performance can still be disappointing when multiple fixtures are used at the same time.

If you are trying to go all-electric, look hard at a heat pump water heater first. If you are trying to save space or get endless hot water, compare that against a properly sized gas tankless unit or a well-designed heat pump system.

The best water heater is not the one with the most exciting marketing. It is the one that can reliably meet your household’s actual hot water demand without creating unnecessary installation cost, electrical load, or performance problems.

Contact us today for a free visit, we can discuss your options and pricing.

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