Condensing tankless heaters are more energy-efficient as they utilize exhaust heat to preheat incoming water, while non-condensing models release exhaust gases without heat recovery, making them less efficient and typically less expensive upfront.
Choosing between a condensing and non-condensing tankless water heater impacts efficiency, cost, and installation. This guide breaks down the pros, cons, and ideal use cases for each type.
How Tankless Water Heaters Work
Tankless water heaters heat water on demand using either gas or electric elements. Cold water flows through a heat exchanger, where it’s instantly heated before reaching your faucet. Unlike traditional tank models, they provide endless hot water without standby energy losses.
Gas vs Electric Tankless Systems
Gas models (both condensing and non-condensing) use burners for heating, while electric versions rely on heating coils. Gas units typically deliver higher flow rates but require proper venting. For electric options, see our guide to the best instant water heaters for showers.
Condensing Tankless Heaters Explained
Condensing units capture exhaust heat that would otherwise be wasted, boosting efficiency to 90% or higher. Here’s how they work:
- Use a primary heat exchanger to warm water with burner flames
- Route exhaust gases through a secondary heat exchanger
- Extract additional heat from exhaust, causing condensation
- Vent cooled exhaust through PVC piping
Advantages of Condensing Models
| Feature | Benefit |
|---|---|
| 90%+ efficiency | Lower energy bills |
| PVC venting | Easier, cheaper installation |
| Lower exhaust temps | Safer operation |
Disadvantages to Consider
Condensing models have higher upfront costs (typically $1,000-$2,000). The condensation process creates mildly acidic water that requires stainless steel components to prevent corrosion. According to U.S. Department of Energy, proper maintenance is crucial for longevity.
Non-Condensing Tankless Heaters Explained
Non-condensing models are simpler systems with one heat exchanger. They vent hot exhaust gases directly outside, operating at 80-85% efficiency.
Key Benefits
- Lower purchase price ($500-$1,500)
- Can often use existing venting when replacing tank heaters
- No acidic condensation to manage
Limitations
These units require expensive, heat-resistant vent materials (stainless steel) due to 300°F+ exhaust temperatures. They’re less efficient in cold climates where incoming water is colder. For alternative venting options, see our direct vent vs power vent comparison.
Head-to-Head Comparison
| Factor | Condensing | Non-Condensing |
|---|---|---|
| Efficiency | 90-98% | 80-85% |
| Vent Material | PVC | Stainless steel |
| Installation Cost | Higher | Lower |
| Operating Cost | Lower | Higher |
| Lifespan | 15-20 years | 20+ years |
Which Should You Choose?
When to Select Condensing
Choose condensing if:
- You prioritize energy savings
- You need new venting installed
- You live in a cold climate
- You can handle higher upfront costs
When Non-Condensing Makes Sense
Opt for non-condensing when:
- Budget is primary concern
- Replacing a tank heater with existing venting
- In a mild climate
- You want simpler maintenance
For large homes, consider installing two units in parallel to meet high demand.
Installation Considerations
Both types require professional installation. Key factors include:
- Gas line size: Tankless heaters need larger gas lines than tank models
- Venting: Condensing units need PVC, non-condensing require metal
- Location: Both types can be installed indoors or outdoors in mild climates
The ACHR News recommends annual maintenance for optimal performance, including descaling and filter cleaning.
Long-Term Costs
While condensing models cost more initially, they typically pay back the difference in 3-7 years through energy savings. Non-condensing units have lower repair costs but higher operating expenses.
Maintenance Requirements
- Condensing: Annual descaling, condensate neutralizer checks
- Non-condensing: Biannual descaling, vent inspections
For hard water areas, consider the best descaler for tankless heaters to prevent mineral buildup.
