Can You Use a Tankless Water Heater in Cold Climates?

Amy Pawlukiewicz
Written by Amy Pawlukiewicz
Updated November 9, 2021
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If you install a tankless water heater in a cold climate, you’ll probably find yourself in hot water—in a good way

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Tankless water heaters have increased in popularity over the past few years due to their energy efficiency and the positive effect they have on homeowner’s utility bills. But what happens if you live in a colder climate? Here’s the lowdown on how to choose a tankless water heater that won’t leave you out in the cold.

What Is a Tankless Water Heater?

A tankless water heater is a small unit that heats water on demand, versus traditional tanks that heat and store a large amount of hot water for use throughout the day. There’s a heat exchanger inside the unit, so when you turn on the hot water from your faucet, the exchanger heats the water as it flows through the unit.

Different Types of Tankless Water Heaters

Modern independent tankless water heater in a room

As with most appliances, there are two primary options when it comes to fueling your tankless water heater: gas and electric. Of the two, the gas water heater generally works more efficiently and quickly to heat water. 

Although they are more efficient, gas powered heaters also require electrical power. So, if you live in an area with frequent power outages, you may want to pass on the tankless option.

Do Tankless Water Heaters Work in Cold Climates?

Tankless water heaters are a good option for homes located in both warm weather and cold weather climates. However, there are several factors that can play into how well the heaters work in chillier climates. 

If you live in a colder climate, a gas heater is definitely a better option than an electric model because gas heated tankless water heaters produce higher flow rates than their electric counterparts. Whether they’re tankless or not, electric water heaters don’t heat water as quickly or efficiently as their gas counterparts. 

To keep your home comfortable in cold weather, be sure to install the correct size tankless water heater. A professional tankless water heater installer can recommend the appropriate size based on how hard the tank will need to work to raise your home’s water temperature, plus the flow rate needed to meet the demands of your location’s climate.

The Pros and Cons of Going Tankless In Cold Climates

There are pros and cons when it comes to converting to a tankless water heating system while living in a cold climate. 

The Pros of Tankless Water Heaters

Tankless water heaters are more energy efficient than traditional water heaters, since they heat water on an as-needed basis. Since the water is heated on demand, there should be an endless supply of hot water, eliminating the frustrating conundrum of running out of hot water during your shower. They also take up less space than a traditional unit, so a tankless water heater can easily fit in a laundry room or a small closet.

If you’re looking to reduce your utility bills, a tankless water heater is a good place to start. According to, tankless water heaters can be 24% to 34% more energy efficient than traditional heaters. Even in homes that use a lot of hot water, tankless water heaters are generally between 8% and 14% more efficient. They avoid the standby heat losses that regular tank water heaters experience, thereby conserving energy.

The Cons of Tankless Water Heaters

On the flip side, flow rate is limited with this type of water heater, which is why you may find yourself with no hot water with a tankless water heater if your demand is too high or if the unit’s capacity is too small. If you want to run your dishwasher and take a hot shower at the same time, you could run into a problem.

In colder climates, it’s more difficult for a tankless water heater to heat water quickly, so your water may not get as hot as you would like. Some homeowners choose to install more than one tankless unit in their homes to avoid this problem.

Cost to Install a Tankless Water Heater

Tankless water heaters cost between $1,175 and $3,370 to install. Keep in mind that electric models are usually less expensive than gas models. Electric tankless units run between $500 and $700, while gas models cost between $1,000 and $1,200

The hourly labor rates charged by professional installers will depend on your geographic area, the size of the project, and other factors. You may be eligible for a tax credit for switching to a tankless heater, so make sure to do your research on your utility company’s website.

Cost To Install a Tankless Water Heater by Location

Below are the average costs to install tankless water heaters in five U.S. cities. 

  • Boston: $2,700

  • Chicago: $2,100

  • New York: $2,200

  • Salt Lake City: $3,600

  • San Francisco: $2,600

What to Consider When Hiring a Pro

When hiring a professional to install your tankless water heater, make sure that you hire someone who can help you choose the appropriate-sized model for your location. You don’t want to install a water heater only to find out that you’re not getting enough hot water to fit your needs. Your pro will also have to insulate the pipes that are feeding the unit to ensure that the water stays hot from the time it leaves the unit to the time it reaches your fixture.

If your unit is going to be installed outdoors, your pro will need to winterize it. Some tankless water heater manufacturers recommend that you avoid installing a unit where the temperature could drop below 35 degrees Fahrenheit, so consider that factor when picking an installation location.

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