Thinking of Switching to a Tankless Water Heater? Here is how & what to Consider

January 27, 2026
Tankless water heater installed in a residential utility room, providing on demand hot water and improved energy efficiency

If you find you are facing high energy costs, you can help reduce your costs by switching to a tankless water heater. Here we discuss tankless water heaters and how to switch from a tank water heater to a tankless.


HOW DOES A TANKLESS WATER HEATER WORK?

Tankless water systems provide hot water by heating water when someone turns on a hot water faucet. Instead of a tank, it is a wall-mounted system that heats and delivers water to the faucets throughout your home on demand.


WHAT DOES IT COST TO SWITCH TO TANKLESS WATER HEATER?

Tankless water heaters range between $600 to $3000. However, installation costs vary quite a bit based on many factors that impact price such as tank size, electric or gas tanks, where you plan to install it, venting and more. Your water heater professional will provide a quote, so you understand all the costs involved.

ELECTRIC TANKLESS WATER HEATER INSTALLATION REQUIREMENTS 

Requirements are based on the type of water heater you choose. First, there is a choice between gas and electric. Electric-powered heaters are easier to install and therefore cheaper than gas. The installer just needs to connect a few wires and pipes. Gas tanks require a gas line that has to be run through your home if you either don’t have one, or it is not in a suitable position. They cost twice as much, but they also use less energy than electric versions.



Next, there are condensing and non-condensing tankless heaters. Non-condensing heaters use a heat exchange system that vents hot exhaust outside so some consideration must be given to the vent installation. Condensing water heaters actually put that hot air to use to help heat water, but they are pricier to install as the systems are more complex. 

IS A TANKLESS WATER HEATER WORTH THE COST? 

Because tankless heaters heat water as it is used, they save you between 24% to 34% if you use about 150 litres a day and between 8%-14% if you use upwards of 300 litres per day. As well, you’ll get a longer life out of your tankless system. If you plan to stay in your home forever, this provides even more value over time. 

WHAT SIZE TANKLESS WATER HEATER DO I NEED? 

To find the right capacity for your water heater, you need to understand your water flow rate. Here are some basic flow rates to help you calculate your flow rate:

  • Standard Dishwasher: 2 GPM/High-Efficiency Dishwasher: 1 GPM
  • Faucet: 1 GPM
  • Shower: 2 GPM
  • Rain Shower Head: 5 GPM
  • Standard Washing Machine: 2.5 GPM/High-Efficiency Washing Machine: 1 GPM

You can see what difference high-efficiency appliances have on your water usage. 

TANKLESS WATER HEATER PROS AND CONS 

To understand why you might choose a tankless water heater, here are the pros and cons:

Pros

  • A constant supply of hot water
  • Compact size to fit easily on a wall
  • No risk for water damage due to ruptured tanks
  • Use less energy thanks to zero standby heat loss
  • Energy bill savings of up to 34%
  • Lasts up to 10 years longer than conventional heaters


Cons

  • The large financial investment required upfront
  • High installation costs, especially for gas and venting models
  • Can cause bursts of cold and hot water if you turn the faucet on and off quickly
  • Inconsistent temperatures sometimes
  • Not good for running multiple fixtures
  • Hard to run lukewarm water
  • Higher maintenance that requires flushing to remove mineral build-up 

Have questions for our HVAC experts regarding a new tankless water heater installation? Contact our team today in Pickering, Oshawa, and Ajax. 

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