I am replacing my A.O. Smith electric water heater with a Stiebel Eltron tankless water heater. This water heater needs 3 inputs of 40amp 125v. My existing A.O. Smith water heater is next to a gas furnace. The house circuit breaker panel is about 30 feet away on a different wall. This panel is already maxed out. I know I have to install a sub panel but my question is can I place this next to the existing panel and run 3 x 8awg cables to the new water heater which is going into where the A.O. Smith water heater is? Also do the new wires need to be in a conduit? I have a removable tiled drop ceiling.

  • Why are you going tankless here, if I may ask? Jul 30, 2020 at 11:49
  • 1
    Are you sure it's 125 Volts?
    – JACK
    Jul 30, 2020 at 12:48
  • 2
    I checked the specs and all models call for 208-240volts. Power requirements are very high for tankless electric WHs. The OP said his existing panel was already maxed out. Did he/she insure there is enough capacity there? If you go forward with it, I'd run conduit with THWN. Running 8/3 cable will give you more ground wires than needed and possibly more neutrals that needed. BTW several of us here are NOT big fans of tankless electric WHs. Jul 30, 2020 at 13:06
  • 3
    Answers go down there, George.
    – isherwood
    Jul 30, 2020 at 13:28
  • Welcome to Home Improvement. Pictures of the existing panel (with cover off - be careful) are always helpful. While you're waiting for an answer, take the tour to learn how to get the most out of this site.
    – FreeMan
    Jul 30, 2020 at 13:59

2 Answers 2


Can you install a sub panel next to a main panel. The answer is yes what it is for is not an issue.

However you have a maxed out panel, a maxed out panel doesn’t mean it can’t be done. Tankless water heaters are power hogs and your existing panel probably will not have the ampacity to carry the load even understanding a 30 amp 240v breaker will be removed.

I have installed quite a few tankless and for a whole house model a new larger panel is almost always required.

Just a side note you really should talk to several people that have whole house tankless, I had a customer that put a whole house in with a new service then we added point of use electrics in the bathrooms and kitchen he was so unhappy with the unit that he removed the tankless went back to a large tanked electric but kept the point of use electric heaters cost over 10k I have had multiple customers unhappy with the performance of tankless electrics and I am happy to put them in good $ but don’t like unhappy customers.

Yes you can add a sub but we don’t know if your service is large enough to supply a load this large in addition to your other loads.

  • Amen to that, Ed. I don't really like any tankless to start with and certainly don't like electric tankless. Electricity demand is going to continue to increase with electric car charging and cities banning Natural gas for heating. Many more are considering banning it. So it seems counter-intuitive to add power hungry tankless electric WHs. to the electrical grid. I hope this comment doesn't get me in trouble, but it is something to think about. Jul 30, 2020 at 15:12
  • I have 200amps coming into the house and the only major draw right now is the A.O.Smith water heater, clothes dryer and the whole house AC. Almost all lighting has changed to LED. Furnace is on gas
    – arvinp
    Jul 30, 2020 at 17:23
  • 200 amp with gas range / oven may be doable, normally when gas is available gas is cheaper for water heating, you will probably like the performance of a tankless gas better than electric I am sure it will be cheaper especially if on a smart meter and the set your rate by peak usage.
    – Ed Beal
    Jul 30, 2020 at 17:55

Yes, you can place the new sub-panel right next to the existing one assuming you still have the correct clearance/working space. (moved my comment to an answer at isherwood's request). Ed already answered it by now.

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