I am building a house and I’m considering a tankless hot water system for the entire house. I live in New Brunswick, Canada and I will only have regular electricity via NB Power. We don’t have gas. So is a hot water on demand aka tankless system still good if I don’t have gas. Is it efficient? Can’t seem to get a straight answer from anyone I’ve asked.

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    Gas tankless for a typical home is about 200kBTU peak. For an electric equivalent, that equals 60kW, or a 250A 2-pole breaker just for hot water. This is almost certainly larger than the entire existing electrical service to your house. Smaller on-demand electric is practical at endpoints like sinks where the demand is low, but for whole-home water you're much better to go with a high quality electric tank.
    – J...
    Dec 15, 2021 at 14:23
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    How large is the house you are planning? How many people are in the household? Is the cold water input to the water heater very cold in NB? Do you want the house designed to maximize efficiency or are you going for high end features such as high flow shower heads or a whirlpool spa? Dec 15, 2021 at 15:59
  • 4
    Perhaps an electric heat pump (aka hybrid) water heater might suit your needs (these are made with tanks though.... but have very good efficiency). Dec 15, 2021 at 17:01
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    @Harper-ReinstateMonica A tankless heater is like pouring cold water into the top of a kettle, and expecting boiling water to come out of the spout immediately. It requires a ridiculous amount of power.
    – Simon B
    Dec 15, 2021 at 19:32
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    @CaiusJard Well, heat pumps were already suggested above. It's just noise to repeat it. You can appreciate that not everyone can afford $30k to drill a ground source heat pump loop. It's Canada - heating water with a heat pump freezes your house otherwise and it's too cold for outdoor air source (see my comment above) without some other supplement.
    – J...
    Dec 17, 2021 at 13:31

9 Answers 9


The catch with any type of electrical heating element is how fast does it need to come up to temperature? The faster and hotter it needs to be, the more electricity it will use. Electric tank water heaters don't have a huge problem because they can heat the water slowly. This means tankless water heaters for the whole house are going to be problematic in how much water you need, and how fast you need it. I picked a Rheem Retex-36 (36kW heater), which is one of the larger ones you can buy. This image they distribute illustrates a significant hurdle

Rheem Retex-36 Water Heater

There's some important things to note

  1. You need 300A service because this unit can eat 150A by itself. Most houses get 200A as a standard. Your electrical utility may not be able to provide that, depending on where you live. And you might have to have both new service wires and a new panel to boot.
  2. You need four 40A 240v circuits for this (8-gauge wire isn't cheap either). Even if you have a nicer 40-slot panel, this will take up 20% of that just for the water heater. And these will have to run back to your main panel (or you can add more cost buy putting a 200A subpanel next to the heater).

To be fair, I picked one of the largest you can get. There is a Retex-18, which has half of the electrical requirements (and no service upgrades needed at 75A), but also half the hot water.

Try a different track

There's three alternatives here

  1. Go with a tank. Yes, it means more hassle with plumbing, but it's vastly more economical than trying to redo your whole house electrical.
  2. Go propane. Get a tank and run it to your tankless gas. I have a natural gas version and it works great. This does mean you'll have to vent it.
  3. Mix a smaller whole-house tankless with some point-of-use. This might be impractical on the front-end (due to cost), but it would avoid some of the other problems. These smaller units can give you that "instant on" kick, while not needing a ton of electrical (especially if they are small tanks). The catch here is you'll want a dedicated circuit for each heater, plus you'll need to buy each heater you want to add. But since it's unlikely they'll all be on at the same time, you should be good on your electrical panel.
  • Most houses in my area are 100A service, a 300A service for residential seems crazy!
    – element11
    Dec 15, 2021 at 16:59
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    There's nothing like a cold winter day, taking a nice hot shower, hair all soaped up, and the power goes out...and then 40F water starts coming out of the shower faucet.
    – rtaft
    Dec 15, 2021 at 20:52
  • I think people going this route is very risky for society at large. Major cities (New York most recently) are banning natural gas in new construction, insisting they are all electric, heating, cooking, everything. Combine that with on demand electric water heaters with their HUGE electrical demand and consider people charging their electric vehicles (EVs). So you come home from work, plug in your EV car, you or your spouse start cooking dinner on your electric range and the other is taking a shower....geeze, what could go wrong. Dec 17, 2021 at 16:14
  • @GeorgeAnderson: Aren't EV chargers available with smart scheduling (i.e. the charging must be completed at a designated time, but the rate of charge in the interim can shift to account for other demand)?
    – Ben Voigt
    Dec 17, 2021 at 21:05

In theory, it sounds great - only heat what you use. In practice, it requires a huge amount of electricity when running. A storage (tank) heater spreads the electricity usage over time which cuts peak demand. Modern tanks are very well insulated, so little is lost when the tank is sitting waiting to be used. In addition, while traditional storage heaters and on-demand heaters are both giant toasters (resistance heat), new heat pump heaters can be much more efficient.

In addition to local infrastructure (e.g., a larger service feed due to higher peak demand, a larger main breaker, big wires between your panel and your on-demand water heater), in some areas, this peak demand will have an impact on your bottom line. Most residential areas (that I know of, US-centric) don't charge residential users a peak demand charge. But due to the very real costs involved with high peak usage, some utilities are starting to charge either a peak demand fee (e.g., $10/kW for the highest 15 or 30-minute period of each month) or higher usage (per kWh) charges during peak times (typically weekday afternoons). On-demand water heaters definitely impact peak demand, which could easily translate into $100 or per month, even though total usage should be roughly the same as a tanked heater. They also don't allow any time-shifting - it has to run whenever you need it. With a tanked heater you could, within some practical constraints, even put it on a timer so that it wouldn't run at all in peak times and, as long as you didn't take long showers in the middle of the day, you would still have hot water.

  • 1
    I work in a utilities-adjacent company and from what I've been seeing, I would bet that the majority of consumers will be on demand and/or time of use plans within the lifetime of OP's hypothetical tankless water heater.
    – stannius
    Dec 15, 2021 at 16:48
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    @stannius: Only if lack of consumer protection forces them onto such plans, which are always bounded-gain and unbounded-loss gambling propositions for the consumer. (See: Texas ice storm) Dec 16, 2021 at 19:33
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    There is nothing inherently wrong with demand and/or time of use plans. Arguably, they are exposing true costs and therefore ending unnecessary subsidies. Consumers can then make their choice between convenience and cost. The problem is if this gets abused as an excuse to not build proper infrastructure. Dec 16, 2021 at 19:39

I'm going to be blunt here and just say NOOOOOOOO. I'm kinda OK with tankless if you have propane or natural gas, but the power requirements for an electric tankless are very high. Also, in your new build, if you have any fancy showers with multiple heads, it's really doubtful a tankless could adequately supply. Modern tank type water heaters are very well insulated and standby loss is virtually non existent. Not only that, you have a lot of pre-heated water ready to use. And one more thing, if you are in an area that has variable electric rates associated with time of day usage, you could program a controller to only use power during the less expensive periods for a tank type WH. You can't do that with an on demand WH...well, I suppose you could but it might result in some cold showers!

  • 2
    A tankless heater with limited power/throughput will motivate the user to use less water, and high water consumption is a problem in many locations - or will be in near future. And with less warm water per shower, also much energy is saved. Most tankless heaters come with special nozzles or valves which mix more air into the water to maximize the volume without loss of comfort. In combination with a counterstream heat exchanger tankless systems are worth to be considered.
    – xeeka
    Dec 16, 2021 at 4:07

I just wanted to throw my $0.02 in here as I have recently done a lot of research on this.

One technology you may not have thought of is a Heat Pump hot water heater. Yes, this uses a tank but also uses the "miracle" of a heat pump to transfer heat from the environment into your tank.

Heat pumps operate at greater than 100% efficiency (some up to 300%~400%) because they do not generate heat directly but rather use the energy to MOVE heat from one area to another. The heat pump technology itself is not new, so you can get fairly large units that have an outdoor condenser, great for systems where the home heating and hot water will both be electric.

Recently a few manufacturers have released standalone Heat Pump Hot water units that you might find easy to install. The heat pump will draw heat from your house and put it in your tank.

A second note that I would mention if you do elect to use some form of an instantaneous electric HWT...consider installing them only under the sink in the furthest bathroom/powder rooms. You might not save on install costs, but you can save on your bills over time by not wasting all the hot water your kids/guests run in the lines to a far away location in your house. I think having an instantaneous HWT in a central location is sort of the worst of both worlds.


A tank less heater may save costs because the stand -by losses are very low, and because the anti-legionella heating is not necessary. Modern bare wire heaters avoid limestone coatings since the wire expands/moves when heated and contracts when cooling down.

The power demand for (electronically controlled) water heaters can be decreased by installing a counterstream heat exchanger at least for the showers (e.g. see Rob the Plumber videos on YT for inexpensive DIY-exchangers).

In theory nearly 100%, in practice 20-70% of the energy can be recovered. The exchanger reduces the high power demand to the very beginning of the showering, when the water in the lines is still cold.

  • "Modern blank wire heaters" What is a "blank wire heater"? term I've never heard of...
    – FreeMan
    Dec 15, 2021 at 13:52
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    @FreeMan Thanks for the hint, bare wire heater was meant.
    – xeeka
    Dec 15, 2021 at 14:40

TLDR: On demand will save some money, but with electricity (or propane) as volume increases the saving diminish. The savings often aren't huge, and come with complications.

It's hard to get a straight answer because savings decreases with volume. Basically there is a specific amount of energy available from electricity (3412 btu's per Kw/h). If your use is low you will save more, but then you need to calculate cost of operating a smaller storage tank. Then the installation and commissioning cost runs a bit higher.

There are also other considerations, like if you live in a climate where you heat more than you cool and you locate a storage tank strategically then the energy lost is less significant because it can contribute to heating living space.

A lot of the stories about dissatisfaction with on demand comes from overpromising and under engineering to fit within the available electric service. Shouldn't be a big issue since you are planning before construction phase the larger service may not be such a big issue, it is possible with EVSE provisions a basic 200A service is not going to be adequate anyway, and you will be putting in a 320/400A service.

Propane is a consideration in volatile climates where you may need to heat while the grid is down, but price of propane fluctuates greatly, your breakeven price kwh to gallon price point is about 20:1. Right now (eia.gov US average pricing) you would be saving about 20% on the energy side of the equation, but I have been way upside-down before and with the political war on oil I would expect to see higher propane prices. Savings comes with inconvenience of tank location and access, zoning and HOA issues, tank lease or testing if you own and change vendors, delivery drivers damaging landscaping. Experiences vary greatly, personality type is a factor too.

  • Great answer. I agree. I have a 1,000 gallon propane tank that's buried and all you see is a small riser (about 16" in diameter) to allow access for reading the fill level and filling it up. I"m not part of an HOA, so no worries there. As cities push for all electric, you can bet that electric rates will skyrocket. crazy times. Dec 16, 2021 at 4:33
  • @GeorgeAnderson -- if we can only get the transmission situation in North America unbottlenecked Dec 18, 2021 at 2:27

As others have said, electrically heating water on demand is, well, tricky to say the least.

Gas "combi" boilers are pretty common in the UK, and work well enough in a lot of cases. The "rule of thumb" used is usually the size of the property - if it's likely to only have a couple of inhabitants, then a combi really is a good option. However, if it's bigger, then a tank of some sort is usually better - it's a trade-off of course, and it all depends how much hot water you actually use (which no one really knows). For places with no gas though, we find electric showers and maybe a couple of electrical heaters for specific taps - but they all lose some water pressure when producing very hot water (especially if the mains water temperature is low).

I'll just throw in a couple of alternatives (I'm in the UK, so I have no idea about Canadian rules around such things - YMMV). The first is what we call a "sealed unit" - an unvented hot tank. They're typically not that big and very well insulated, and can be heated electrically. The water pressure out of such a tank is the same as going in - when you draw water, cold is pushed in and hot comes out - there's no additionally pumping required. To avoid the bugs, you need to keep the water temperature at about 60-65C, which can be a bit hot out of the tap. You can use a thermostatic "blending valve" to mix in a bit of cold with the hot so the water in the pipes is more like 50C. You'll need alternative solutions if you wanted some wet underfloor heating or radiators though.

The other option is a heat store. These tend to be bigger, and not really for the faint of heart. Here, the water is also electrically heated (and via other sources, if you have any), and barring extended absences will be permanently kept hot. If you want any hot water, it's pulled from the cold mains, passed through a long coil of pipes inside the tank and comes out hot. That is, the stuff coming out the taps is different from the stuff in the tank (so no worries about bugs). You can also run underfloor heating from the same thing, and in some cases regular radiators as well.


Check your power supply limits.
[Then scream]

For comfort, you will need around 20 Kilo-watt heater for showers and baths. The regular old fashion boiler is fine with 2-4 kilowatt power, as it can heat water over longer period.
Is that within your whole house power supply? Are you ready to put a thick wires where the heater will be?


Do you have a family?

Do you and your family like baths?

The problem with tankless heaters is that you need a lot of power to fill a bath in a reasonable time. I have a 38KW gas "combi boiler" (instant heat for hot water plus a heating loop for heating the radiators) and it's still noticeably slower to fill a bath at my place than at my parents place where they have a traditional tank. Not a huge issue for me as I live alone, but I wouldn't want it with a family.

While electric Tankless heaters of similar power apparently do exist, as Machavity points out they are a PITA to provision the electricity supply for.

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