Thinking about upgrading to a tankless water heater? You’re not alone. More and more homeowners are making the switch from traditional tank water heaters to on-demand models. Why? Because tankless water heaters only heat water when you need it, reducing energy waste and giving you virtually endless hot water. But before you dive in, we’re here to walk you through how to choose a tankless water heater that matches your needs, lifestyle, and budget.
At Simpson Plumbing, we’ve helped hundreds of homeowners across Vancouver, Camas, and Portland navigate their water heater choices. Let’s break it down.
Unlike traditional systems that store water in a tank and keep it hot 24/7, tankless water heaters operate on demand. When you turn on a hot water tap, the unit kicks on, heating cold water as it flows through the system. This gives you hot water on demand — no tank, no waiting, and no standby energy loss.
Because they don’t store water, tankless systems are more energy-efficient. They also last longer (up to 20 years), save space, and provide a steady supply of hot water when sized properly.
But that last part is key: “when sized properly.” Let’s talk about how to find the right fit.
Choosing the right size tankless water heater is crucial to ensure your home has enough hot water when you need it. When asking what size tankless water heater do I need, it’s important to consider factors like peak hot water demand, number of bathrooms, and local climate. Learning how to size a tankless water heater correctly will help you avoid issues like insufficient flow rate or unnecessarily high energy bills. This guide walks you through each key step to help you make an informed decision tailored to your home and lifestyle.
Let’s go over these six steps in more detail.
To size a tankless water heater correctly, you need to understand your household’s peak hot water demand — meaning the maximum amount of hot water your home might use at once.
Think about typical usage scenarios:
So, if someone’s taking a shower while the dishwasher and washing machine are running, you may need 6–8 GPM of hot water output at that time. If your unit can’t keep up, you’ll either run out of hot water or the temperature will drop.
Start by listing the appliances you might use at the same time and totaling their flow rates in GPM. This will give you a good estimate of your needed capacity.
The incoming water temperature — or average groundwater temperature — affects how hard your tankless water heater needs to work.
Here in the Pacific Northwest, groundwater temperatures can hover around 50°F. If you want hot water at 120 degrees, your heater will need to raise the water temperature by 70°F — this is known as the desired temperature rise.
Smaller units may struggle to achieve that increase if demand is high. That’s why calculating both your flow rate, GPM, and temperature rise is essential when shopping.
There are two main types of tankless water heaters: electric tankless water heaters and gas-powered systems (typically natural gas or propane). Each has pros and cons.
British Thermal Units (BTUs) are used to measure gas unit capacity. The higher the BTUs, the more water it can heat quickly. In general, gas units handle higher demand better than electric ones.
Bottom line: If you have a large family or use hot water in multiple rooms at once, gas is probably your best bet. For smaller homes or single-use areas (like a guest suite), electric may be enough.
The cost of tankless water heaters varies significantly. Electric models might start around $500–$700, while gas systems can range from $1,000 to $2,000 or more. But that’s just the unit.
Tankless water heater installation may require electrical upgrades, gas line work, or venting–depending on your home’s current setup.
On the flip side, tankless units are more energy-efficient, especially in homes with moderate water use. Over time, the energy savings can help offset the initial cost.
It’s smart to think about:
Simpson Plumbing always provides transparent estimates and helps you understand what you’re paying for — no hidden fees.
Most tankless water heaters are installed inside the home (usually in utility rooms or garages), but some are designed for outdoor installation. This can save indoor space and reduce venting needs, but you’ll need to protect the unit from freezing in cold weather.
Outdoor tankless water heaters are a good option for homes with limited space, as long as they’re installed correctly and safely.
Tankless systems are known for their long-term durability, but they do need maintenance. Sediment buildup — especially in hard water areas — can reduce efficiency over time.
Here’s how to keep your system running at peak performance:
Simpson Plumbing offers regular maintenance plans to help extend the life of your investment and prevent unexpected issues.
Let’s recap the main differences between a tankless water heater compared to a traditional tank system:
| Feature | Tank Water Heater | Tankless Water Heater |
| Energy Efficiency | Lower (keeps water hot all day) | Higher (heats water as needed) |
| Lifespan | 8–12 years | 15–20 years |
| Size | Bulky | Compact |
| Hot Water Supply | Limited by tank size | Unlimited (if sized correctly) |
| Upfront Cost | Lower | Higher |
| Maintenance | Less frequent | Requires descaling in hard water areas |
Can I replace my current tank water heater with a tankless model?
Yes, but it may require some upgrades. For example, tankless water heater installation might involve changes to your electrical system or gas lines. A Simpson Plumbing technician can assess your setup and provide a clear plan.
What size tankless water heater do I need for a family of four?
Most families of four need a unit with a flow rate of 8–10 GPM, depending on how many appliances are used simultaneously. The exact size depends on your desired hot water usage habits and incoming water temperature.
Are tankless water heaters really more efficient?
Yes. Since they only heat water when needed, tankless systems avoid standby energy loss. They’re typically 24–34% more efficient than traditional tanks, especially in homes that use less than 41 gallons of hot water per day.
Do electric tankless water heaters work well in cold climates?
They can, but they often struggle with a high temperature rise in homes with cooler groundwater temperatures. Gas models generally perform better in areas with colder climates.
How long does it take to install a tankless water heater?
Most installations take one full day, depending on the complexity of the job. Simpson Plumbing works quickly and cleanly to minimize disruption.
Choosing the right water heater is a big decision—and we’re here to make it easier. Whether you’re comparing models, sizing your system, or curious about the cost of tankless water heaters, Simpson Plumbing is your go-to local expert. We’ll walk you through every step, from choosing the best unit to professional tankless water heater installation, and we’ll do it with the honesty and transparency our customers expect and deserve.
Call today to schedule a consultation, or just reach out with your questions. We’re here to help you get the perfect system — and the perfect hot shower.
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