Tankless water heater installation: A step-by-step guide

Key takeaways:

Tankless water heaters are more energy-efficient than traditional storage tank heaters, potentially saving 24-34% on energy consumption if used around 41 gallons daily. 

These units are compact, can be mounted on walls, and are suitable for both residential and commercial applications, saving valuable floor space. 

Tankless water heaters typically have a life expectancy of over 20 years with easily replaceable parts, compared to 10-15 years for traditional storage water heaters. 

Proper preparation, including having the right tools, understanding local building codes, and ensuring adequate ventilation, is crucial for a safe and efficient installation of both electric and natural gas tankless water heaters. 

We’re out of hot water! 

If you have a large household, this phrase is probably one of your least favorite to hear during your morning routine. 

If you are looking to upgrade your water heater, a tankless water heater may eliminate this concern. 

Besides providing hot water supply to your home, both residential and commercial tankless water heaters are typically smaller than traditional water heaters and are more energy efficient. The U.S. Department of Energy reports that a tankless water heater is 24% more energy-efficient than storage tank water heaters—as long as you use around 41 gallons daily. However, even if you double that amount, they are still 8% more efficient. 

In this article, we have provided a step-by-step guide to installing both gas and electric tankless water heaters. Let’s dive in and see how you can upgrade your current water heater.

 

Understanding tankless water heaters 

A tankless water heater, also known as an on-demand water heater, heats water only when needed, eliminating the need for a storage tank. Unlike traditional water heaters, which store and continuously heat a large volume of water, tankless units heat water directly as it passes through the unit. 

Differences between tankless and traditional water heaters 

  • Energy efficiency: Tankless water heaters are more energy-efficient because they heat water only when needed, reducing energy waste associated with maintaining a hot water tank. 
  • Continuous hot water supply: They provide a constant hot water supply, as they don't rely on a limited storage tank. 
  • Space-saving design: Tankless units are compact and can be mounted on walls, saving valuable floor space in your home. 

Tankless water heaters offer significant benefits, including lower energy bills, unlimited hot water, and a smaller, more versatile design that can fit in tight spaces. These advantages make them popular for modern households looking to improve energy efficiency and convenience. 

Also, according to energy.gov, most tankless water heaters have a life expectancy of more than 20 years. They also have easily replaceable parts that may extend their life by many more years. In contrast, storage water heaters last 10–15 years. Tankless water heaters avoid the standby heat losses associated with storage water heaters, making them a far better option than traditional water heaters.

 

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Step one: Preparing for installation

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Proper preparation is crucial for a smooth and successful tankless water heater installation. Before you begin your tankless water heater installation, ensure you have all the necessary tools and materials. Here's a comprehensive list of what you'll need: 

Water heater unit: The main component is to choose a model that fits your household's hot water needs. 

Pipe fittings: Various sizes of pipe fittings will be required to connect the water lines. 

Mounting brackets: Essential for securely fastening the unit to the wall. 

Wrenches: Adjustable and pipe wrenches are needed for tightening and loosening fittings. 

Pipe cutter: This is necessary for cutting pipes to the required length. 

Screwdriver: This is used to secure mounting brackets and other components. 

Safety gear: Gloves and goggles are required to protect your hands and eyes during installation. 

Teflon tape: Tape is used to seal pipe threads and prevent leaks. 

Voltage tester: You’ll need this to ensure the electrical supply is off before you start working. 

Bucket and towels: These are used to manage water spills during installation. 

Having these tools and materials ready will help streamline the installation process. Additionally, review the manufacturer’s installation manual for any specific requirements or additional tools that might be needed. This preparation sets the stage for a safe and efficient tankless water heater installation, ensuring you can complete the task without unnecessary delays.

 

Step two: Safety precautions

man turning handle on pipes

 

Turning off the main water supply and power 

Before installing, ensure the main water supply and power are turned off. This is crucial to prevent water damage and electrical hazards. Use a voltage tester to confirm the power is off. 

Ventilation considerations 

Proper ventilation is essential when installing a tankless water heater, especially for natural gas models. Ensure the installation area is well ventilated to avoid the buildup of harmful gases. Follow the manufacturer's guidelines for venting to the outside to ensure a safe and efficient operation.

 

Step three: Site preparation

Choosing an appropriate location

Select a location close to water and power sources for easy access. The site should be well-ventilated, easily accessible for maintenance, and away from high-traffic areas to avoid accidental damage. 

Checking local building codes and regulations 

Ensure your installation complies with local building codes and regulations. These codes are designed to ensure safety and proper operation. Check with your local authorities or a professional installer to confirm that your chosen location and installation plan meet all requirements and standards.

 

Step four: Removing the old water heater

Draining the old unit

It needs to be safely drained before you can remove the old water heater.  

  1. Start by turning off the water supply to the heater.  
  1.  Next, attach a hose to the drain valve at the bottom of the heater and place the other end in a floor drain or outside to direct the water safely away from your home.  
  1. Open the drain valve and allow the water to flow out. To speed up the process, you can open a hot water faucet in your home to let air into the system and ensure complete drainage. Be cautious of hot water to avoid burns. 

draining the tankless water heater

 

Disconnecting power and water lines

Once the water heater is drained, disconnect the power and water lines.

disconnecting the wires on a tankless water heaters  

If you have an electric water heater, use a voltage tester to ensure the power is off at the circuit breaker. 

For gas water heaters, turn off the gas supply. Remove the cover plate and unscrew the connections to disconnect the electrical wires from the heater. Use a pipe wrench to disconnect the water lines. Start with the cold water inlet, then disconnect the hot water outlet. Be prepared for some residual water to spill from the pipes. 

By following these steps, you can safely remove the old water heater and install your new tankless unit.

 

Step five: Installing the new tankless water heater

new tankless water heater

 

Mounting the unit 

  1. Attach the mounting bracket provided with the unit to the wall, ensuring it is level. 
  1. Confirm it's near the necessary utilities (water, gas, and electric supply) and has adequate ventilation. 
  1. Use a stud finder to locate wall studs for secure mounting. 
  1. Lift the water heater and secure it onto the bracket according to the manufacturer’s instructions, ensuring it is firmly attached and stable.  

Connecting water lines 

Next, connect the water lines. Start with the cold water inlet and attach the pipe using appropriate fittings, such as unions and shutoff valves, making future maintenance easier. Use Teflon tape on the threaded connections to ensure a tight seal and prevent leaks. Then, connect the hot water outlet to the hot water line leading into your home. Make sure all connections are secure and double-check for any potential leaks before proceeding. 

Connecting the gas line (if applicable) 

If your tankless water heater uses gas, connect the gas line following the manufacturer’s guidelines. Verify the gas supply is turned off before beginning. Use a flexible gas line and appropriate fittings to connect the gas supply to the heater.  

Connecting electrical supply 

For the electrical supply, follow the manufacturer's wiring diagram. Connect the unit to a dedicated circuit breaker that meets the heater's voltage and amperage requirements. Use a voltage tester to confirm that there is no electrical current before making connections. Make sure all electrical connections are secure and insulated for a proper electric tankless water heater installation. 

Ventilation setup 

Proper ventilation is crucial for gas-powered tankless water heaters. Install the vent piping according to the manufacturer’s instructions, ensuring it leads to the outside to expel exhaust gases safely. Use approved vent materials and secure all connections tightly. Check for any obstructions in the vent path and ensure adequate clearance around the vent terminations.

By carefully following these steps, you can safely and efficiently install your new tankless water heater, providing you with reliable and continuous hot water. 


The information in this article is intended to provide guidance on the proper maintenance and care of systems and appliances in the home. Not all of the topics mentioned are covered by our home warranty or maintenance plans. Please review your home warranty contract carefully to understand your coverage. 

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