Tankless Water Heater Installation: A Complete Guide

That bulky water heater taking up space in your closet or garage does one thing: it stores hot water until you need it. But what if you could get hot water instantly, without the tank? That’s the promise of a tankless water heater. These compact, highly efficient units are a popular upgrade for homeowners looking to save space and energy. If you’re considering making the switch, this guide will demystify the tankless water heater installation process. We’ll cover the benefits, the key differences between gas and electric models, and provide a clear, step-by-step guide to getting your new unit up and running safely.

Key Takeaways

• Match the Heater to Your Home’s Systems: A tankless heater’s performance depends on a proper match. Calculate your peak hot water demand to choose the right capacity, and have a professional confirm your gas and electrical lines can support the new unit’s requirements before you buy.
• Prioritize Safety During Installation: This isn’t a typical DIY project. Incorrectly handling gas lines, electrical wiring, or ventilation can create serious hazards like leaks or carbon monoxide exposure. Always follow manufacturer instructions and local codes precisely.
• Plan for Professional Help and Long-Term Care: For complex steps like upgrading gas lines or for peace of mind, hiring a licensed professional is the safest choice. Once installed, protect your investment and ensure efficiency by descaling the unit annually to prevent mineral buildup.

What Is a Tankless Water Heater?

If you’ve ever had to cut a shower short because the hot water ran out, you’re familiar with the main limitation of a traditional water heater. Those bulky tanks can only store a finite amount of hot water, and once it’s gone, you have to wait for it to reheat. A tankless water heater, also known as an on-demand water heater, completely changes the game. Instead of storing water, it heats it instantly as it passes through the unit.

When you turn on a hot water tap, cold water flows into the heater, where a powerful gas burner or electric element brings it to the desired temperature in seconds. This means you get a continuous, endless supply of hot water for as long as you need it. Because these systems don’t waste energy keeping a large tank of water hot around the clock, they are significantly more energy-efficient, which is great for both the environment and your utility bills. Plus, their compact size frees up valuable real estate in your home. Upgrading to a tankless water heater is a practical investment in your home’s comfort and efficiency.

The Benefits of Going Tankless

The most celebrated perk of going tankless is the endless supply of hot water. You can run the dishwasher, do a load of laundry, and still take a long, hot shower without worrying about it turning cold. Beyond that convenience, tankless models are incredibly energy-efficient, potentially cutting your water heating bills significantly since they aren’t wasting energy keeping a tank of water hot 24/7.

These units also boast a much longer lifespan—often lasting 20 years or more, which is nearly double that of a traditional tank heater. While the initial investment can be higher, the long-term energy savings and extended lifespan make them a cost-effective choice. The compact, wall-mounted design also saves a surprising amount of space. Of course, the right choice depends on your home’s needs and current plumbing system.

Gas vs. Electric: Which Is Right for You?

Choosing between a gas or electric tankless water heater often comes down to your home’s existing utilities and your performance needs. Gas-powered models typically offer a higher flow rate, meaning they can supply hot water to multiple appliances at once more effectively. While they often have a higher upfront cost, they tend to be more cost-effective to run over time, especially if you already have a natural gas connection.

Electric models, on the other hand, are generally less expensive to purchase and easier to install, particularly if your home isn’t equipped for gas. They are highly efficient and compact, but may struggle to keep up with heavy demand in larger households. It’s also worth noting that even gas heaters require a dedicated electrical outlet to power their electronic controls.

4 Key Things to Consider Before You Install

Switching to a tankless water heater is an exciting upgrade, but a little planning is essential before you start the installation. Taking the time to think through these key areas will save you from headaches down the road and ensure your new heater works perfectly from day one. From picking the right size to understanding local rules, here’s what you need to consider.

Find the Right Size for Your Home

When it comes to tankless water heaters, “sizing” isn’t about physical dimensions—it’s about capacity. You need a unit that can meet your household’s peak demand for hot water. Think about the busiest time of day in your home. Could you be running a shower, the dishwasher, and a load of laundry all at once? A properly sized unit will handle that without breaking a sweat. To figure this out, you’ll need to calculate the flow rate (gallons per minute) and the required temperature rise. Getting this right is crucial, which is why getting professional advice on water heater services can make all the difference.

Choose the Best Location and Venting

One of the best perks of a tankless water heater is its compact size, which gives you more flexibility in where to install it. However, the location is heavily dependent on proper venting, especially for gas models. These units require specific venting materials—often PVC—and the exhaust must be routed outside, a safe distance away from any windows, doors, or air intakes to prevent dangerous fumes from entering your home. Following local building codes for placement and venting isn’t just a suggestion; it’s a critical safety measure for your family.

Check Your Gas and Electrical Systems

Tankless water heaters are powerful, and they need the right utility support to function correctly. Gas models consume a large amount of gas in short bursts, which means your existing gas line might be too small to keep up. In many cases, you’ll need to upgrade to a larger, 3/4-inch line. Additionally, all tankless units require a dedicated 120-volt electrical outlet to power their digital controls and sensors. Before you buy a unit, it’s a good idea to have a professional assess your home’s current plumbing systems to see what upgrades might be necessary.

Understand Local Permits and Codes

Any time you’re working with gas and plumbing lines, you need to follow local regulations. Here in the Fort Collins area, installing a new water heater typically requires a permit and a professional inspection. This process is in place to protect you. An inspector will verify that the installation meets all safety standards, catching any potential mistakes that could lead to dangerous situations like gas leaks or carbon monoxide exposure. Working with a licensed professional ensures that all the necessary permits are pulled and that your new heater will pass inspection without any issues. If you have questions about local requirements, it’s always best to contact a professional.

Gathering Your Tools and Materials

There’s nothing worse than getting halfway through a project only to realize you’re missing a crucial tool or part. Before you even think about touching your old water heater, let’s get everything you need organized and ready to go. Taking the time to gather your supplies now will make the entire installation process feel much smoother and more manageable. A well-prepared workspace is a safe and efficient one, and it helps you stay focused on the task at hand instead of making extra trips to the hardware store.

Your Essential Tool Checklist

Every installation is a little different depending on the model you’ve chosen and your home’s existing setup, but a few tools are almost always necessary. You’ll want to have a reliable drill, a set of wrenches, a pipe cutter, and a level. Don’t forget the basics like a tape measure, screwdrivers, and pliers. Having everything laid out and within reach will make each step flow into the next. If you open your toolbox and find it’s looking a little sparse, or if you’re unsure about handling specialized plumbing connections, it’s never a bad idea to pause and consult a professional.

Required Parts and Components

Beyond the tools, you’ll need specific components to connect your new unit properly. Chief among these are isolation valves with service ports. These are non-negotiable. They allow you to shut off the water supply directly to the heater, which makes future maintenance—like descaling to remove mineral buildup—incredibly simple. For electric models, you’ll also need to double-check the voltage settings inside the unit. It often comes preset to 240 volts but might need to be switched to 208 volts to match your home’s electrical system. Make sure you have the correct pipes, fittings, and venting materials specified by the manufacturer.

Preparing Your Safety Gear

Safety is the most important part of any DIY project, especially one involving gas or high-voltage electricity. Before you start, put on safety glasses and gloves. The very first step of the installation itself should be shutting off the power at the main breaker and closing the main gas valve. If you’re installing a gas unit, inspect your gas lines. Many tankless models require a higher gas flow, which often means upgrading from a ½-inch to a 1-inch pipe. If you feel even slightly unsure about working with your home’s electrical panel or gas lines, please stop and call a professional. It’s always better to be safe.

How to Install Your Tankless Water Heater: A Step-by-Step Guide

Alright, you’ve done your research and you’re ready to install your new tankless water heater. This guide will walk you through the essential steps, but remember: your manufacturer’s manual is your ultimate source of truth. Every model is slightly different, so always follow its specific instructions. This project involves gas, water, and electricity, so safety has to be your top priority. If at any point you feel unsure, it’s always best to pause and call a professional. A proper installation is what ensures your unit runs efficiently and safely for years to come, giving you that endless hot water you’ve been looking forward to. Taking on a project like this can be incredibly rewarding, but it requires careful planning and attention to detail. Before you even open the box, read the entire installation manual from front to back. Familiarize yourself with all the parts, the required tools, and the specific safety warnings for your model. This isn’t a project to rush through on a Saturday afternoon. Set aside ample time, clear your workspace, and let your family know what you’re doing so you won’t be interrupted. A successful installation means more than just connecting a few pipes; it’s about understanding how the system works and respecting the potential hazards involved. Getting it right means peace of mind, lower energy bills, and reliable performance. Getting it wrong can lead to water damage, gas leaks, or an inefficient unit that fails prematurely. So, take a deep breath, lay out your tools, and let’s walk through this process one step at a time.

Step 1: Shut Off Utilities and Remove the Old Unit

Before you touch a single pipe, your first job is to create a safe workspace. Head to your main utility connections and shut off the gas, water, and electricity to your old water heater. Double-check that everything is off before proceeding. Next, you’ll need to drain the old tank completely—this can take a while, so be patient. Once it’s empty, you can carefully disconnect the water, gas, and electrical lines. With everything detached, you can finally remove the old unit and clear the space for its modern replacement. Have some towels and a bucket handy, as there will likely be some residual water.

Step 2: Mount the New Tankless Heater

Now for the exciting part: getting the new unit on the wall. Find a solid mounting location, making sure to anchor the mounting bracket directly into the wall studs for maximum stability. Most tankless heaters come with a template to help you position it correctly, so use it! Grab a level to ensure the unit is perfectly straight before you secure it. Following the manufacturer’s placement guidelines is key here, as it ensures proper operation and venting down the line. Take your time to get this right—a securely mounted unit is a safe unit. Double-check that you’ve left enough clearance around the unit for future maintenance and proper airflow.

Step 3: Connect the Water Lines

With your heater mounted, it’s time to hook up the water. You’ll be connecting the cold water inlet and the hot water outlet, which are typically located at the bottom of the unit and are clearly marked. You can use either copper or flexible PEX piping for these connections, depending on your home’s existing plumbing and local codes. This is also the ideal time to install isolation valves on both lines. These valves are a lifesaver for future maintenance, as they allow you to service the unit without shutting off water to your entire house. A little extra effort here will save you a lot of headaches later on.

Step 4: Make the Gas and Electrical Connections

This is the most technical part of the installation, where precision is non-negotiable. For the gas line, you’ll need to connect it to the heater, making sure to install a sediment trap and a dedicated shut-off valve. Use pipe dope or Teflon tape on all threaded connections to create a perfect, leak-proof seal. For the electrical work, you’ll either plug the unit into a nearby outlet or hardwire it directly, depending on the model. If you’re not 100% confident working with gas or electrical systems, this is the perfect time to contact a professional for water heater services. It’s always better to be safe than sorry.

Step 5: Install Venting and Test Everything

You’re in the home stretch! The final step is installing the venting system. Most high-efficiency tankless units require two PVC pipes: one for intake air and one for exhaust. You’ll need to drill holes to the exterior of your home, ensuring you meet the manufacturer’s clearance requirements from windows, doors, and other vents. Once the venting is secure, it’s time for the moment of truth. Slowly turn the water, gas, and power back on. Check every gas connection for leaks using a soapy water solution—if you see bubbles, shut the gas off immediately and tighten the fitting. Finally, turn on a hot water tap and make sure your new heater fires up and delivers that glorious, endless hot water.

Critical Safety Precautions for Installation

When you’re installing a tankless water heater, safety isn’t just a suggestion—it’s the most important part of the job. You’re working with gas, electricity, and water all at once, which means there’s no room for error. Taking shortcuts here can lead to serious risks for your home and family. Before you even pick up a tool, make sure you understand these critical precautions. Getting this part right ensures your new heater runs efficiently and, more importantly, safely for years to come.

Working Safely with Gas Lines

Gas lines demand your full attention. Tankless water heaters use a lot more gas in short bursts than traditional tank models, so your home’s existing gas line might not be up to the task. It’s common to need a larger line—often 3/4-inch or bigger—run from the meter to the unit. In some cases, your utility company may even need to install a larger gas meter. When making connections, always use the correct pipe dope or gas-rated tape. Once you’re done, check every joint for leaks using a soapy water solution. If you see bubbles, you have a leak. Never, ever use a flame to check for gas leaks. If you’re not completely confident, this is the perfect time to call in a professional for plumbing services.

Following Proper Electrical Grounding Rules

Even if you’re installing a gas unit, there will be some electrical work involved. The first and most important rule is to shut off the power at the main breaker before you touch a single wire. For electric models, proper grounding is non-negotiable. Grounding provides a safe path for electricity to travel in case of a fault, protecting you from electric shock. While many tankless units don’t draw enough power to require a dedicated circuit, they still need to be wired correctly according to all local electrical codes. Double-check your work and make sure all connections are secure before you even think about turning the power back on.

Ensuring Correct Ventilation to Prevent CO Risks

For any gas-powered appliance, proper ventilation is essential to prevent the risk of carbon monoxide (CO) poisoning. Unlike some older appliances, tankless water heaters cannot be vented into an existing chimney. They require their own dedicated vent pipe that runs directly outside. Most modern units use a “sealed combustion” system, which is a great safety feature. This means they pull fresh air for combustion from the outdoors and send all exhaust gases back outside. Pay close attention to the manufacturer’s instructions regarding how far the vent needs to be from windows, doors, and other air intakes to ensure exhaust fumes don’t find their way back into your home. Proper installation of water heaters is key to your family’s safety.

Common Installation Mistakes to Avoid

Installing a tankless water heater can feel like a major win for your home, but a few common slip-ups can turn that victory into a headache. Getting the details right from the start saves you from future repairs and ensures your new unit runs efficiently and safely. Let’s walk through some of the most frequent installation mistakes so you can sidestep them completely. Paying attention to these key areas will help you get the most out of your investment and enjoy endless hot water without any issues down the road.

Incorrect Gas Line Sizing and Venting

One of the biggest hurdles is getting the gas line right. Tankless heaters need more gas in short bursts than traditional tanks, so your existing line is likely too small. You’ll probably need to upgrade to a larger line—often 3/4-inch or bigger. Venting is another key area. Unlike old tank heaters, many new tankless models are “condensing appliances” and require special venting that runs horizontally through an exterior wall. Proper water heater services ensure these systems have the fuel and airflow they need to work correctly.

Improperly Handling Condensation and Drainage

High-efficiency tankless heaters create condensation during normal operation—it’s not a leak. You’ll need a plan for where this water will go, which usually means running a drain line to a floor drain. For gas units, this condensation is slightly acidic. To protect your pipes from long-term damage, it’s smart to connect the drain line to a neutralizer before it enters your home’s plumbing system. This simple step preserves your pipes for years to come.

Skipping Isolation Valves and Other Safety Parts

It can be tempting to skip small parts during installation, but that’s a mistake. Always install isolation valves, which let you shut off water to the heater for easy maintenance like descaling. Even more important is the pressure relief valve. This is a non-negotiable safety feature that protects the unit and your home if the pressure or temperature gets too high. Professionals know these components are crucial for protecting your entire system, right down to the drain and sewer lines.

Know When to Call a Professional

While tackling a home improvement project yourself can be incredibly rewarding, some jobs are best left to the experts. Installing a tankless water heater often falls into that category. It involves a mix of plumbing, electrical, and gas work where a small mistake can lead to big problems. Recognizing when to step back and call for help isn’t admitting defeat—it’s making a smart, safe choice for your home and family. If you find yourself hesitating at any point, it’s a good sign that bringing in a professional is the right move.

For Complex Gas or Electrical Work

A tankless water heater installation can quickly become more complicated than it looks. You might discover that your existing gas line is too small to fuel the new unit, which means it needs to be upsized. Or, if you’re installing an electric model, you may need to run a completely new, dedicated circuit from your breaker panel. These aren’t simple DIY tasks; they require a deep understanding of system requirements and safety protocols. Our team has the expertise to handle these complex water heater services, ensuring every connection is secure, safe, and built to last.

To Meet Local Codes and Pass Inspection

Every city, including Fort Collins, has specific building codes that govern plumbing and electrical work. These rules are in place to keep you safe. A professional installer understands these local requirements inside and out, from pulling the right permits to ensuring the final installation passes inspection. An inspector can spot dangerous mistakes you might have missed, giving you confidence that the job was done right. Handling the permits and inspections yourself can be a headache, but a licensed technician manages this process for you, ensuring your new water heater is fully compliant.

When the Job Is Beyond Your DIY Comfort Zone

It’s important to be honest with yourself about your skills. If the thought of cutting into water pipes or working with electrical wiring makes you nervous, trust that feeling. The risks associated with an improper installation—like gas leaks, carbon monoxide exposure, or water damage—are serious. This isn’t a project for learning on the fly. If you’re feeling overwhelmed or unsure about any step, putting the tools down is the wisest thing you can do. Getting professional plumbing help provides peace of mind that your heater is installed safely and will work efficiently for years to come.

Maintaining Your New Tankless Water Heater

Your new tankless water heater is a fantastic investment in your home’s comfort and efficiency. To keep it running smoothly for years to come, a little routine care is all it takes. Proper maintenance not only extends the lifespan of your unit but also ensures it operates at peak performance, saving you money on energy bills and preventing unexpected breakdowns. Think of it as simple upkeep that protects your investment and guarantees you’ll always have hot water when you need it. From simple DIY checks to knowing when to call in a pro, here’s what you need to know to keep your system in top shape.

Your Regular Descaling and Cleaning Checklist

Hard water is common here in Colorado, and over time, mineral deposits like calcium and magnesium can build up inside your tankless water heater. This buildup, known as scale, forces your unit to work harder and can reduce its efficiency. To prevent this, you should descale your heater about once a year. This involves flushing the system with a vinegar solution to dissolve the mineral buildup. While you’re at it, it’s a good idea to clean the air and water filters to remove any sediment or debris. These simple steps help maintain water flow and protect the internal components of your heater, ensuring it runs efficiently and lasts longer.

Warning Signs That Point to a Problem

Your tankless water heater will usually give you a few hints when something isn’t right. One of the most common signs is a noticeable drop in water pressure or water that fluctuates between hot and lukewarm. You might also notice that it takes longer to get hot water or that the water isn’t as hot as it used to be. Strange noises, like rumbling or popping, can also indicate mineral buildup or a more serious issue. If you spot any of these warning signs, it’s best to address them quickly. Ignoring them can lead to bigger problems, so it’s a good time to schedule a professional water heater service.

The Importance of Annual Professional Maintenance

While DIY cleaning is great, nothing beats a yearly check-up from a qualified technician. A professional has the tools and expertise to perform a thorough inspection that goes beyond basic cleaning. They can check the gas pressure, inspect electrical connections, and look for any signs of wear and tear that you might miss. An annual service call ensures your unit is operating safely and efficiently. It’s also the best way to catch small issues before they turn into costly repairs. Scheduling regular professional maintenance is the easiest way to get peace of mind and make sure your tankless water heater provides reliable service for its entire lifespan.

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Frequently Asked Questions

Is the higher upfront cost of a tankless water heater really worth it? It’s true that the initial investment for a tankless model is higher than a traditional tank heater, but it pays off in the long run. Because these units only heat water when you need it, they are far more energy-efficient, which you’ll see reflected in your monthly utility bills. They also last nearly twice as long—often 20 years or more. When you factor in the energy savings over a longer lifespan and the convenience of endless hot water, it proves to be a smart investment for your home.

How do I know what size tankless water heater my home needs? Sizing a tankless unit is all about meeting your household’s peak demand, not about physical dimensions. You need to consider how many hot water appliances you might run at the same time. For example, could a shower be running while the dishwasher is on? A professional calculates this using your home’s flow rate and the required temperature rise—which is how much the heater needs to warm up the cold water coming into your home. Getting this calculation right ensures you’ll never run out of hot water, even on the busiest mornings.

What happens to my hot water if the power goes out? This is a great question. Since both gas and electric tankless water heaters rely on an electronic control panel to operate, neither type will function during a power outage. The unit needs electricity to ignite the burner (on a gas model) and manage the water flow and temperature. So, if the power goes out, you will not have access to hot water until it is restored.

How often should I really be descaling my unit? For homes in our area, descaling your tankless water heater once a year is a solid rule of thumb. Our water tends to be quite hard, and mineral buildup is the number one enemy of these efficient machines. An annual flush with a simple vinegar solution keeps the internal parts clean and running at peak performance. If you know your home has particularly hard water, you might consider doing it more frequently or looking into a water treatment solution to protect your investment.

Can I vent my new tankless heater through my old water heater’s chimney? No, you should never vent a modern tankless water heater through an old chimney. Tankless units have very specific ventilation requirements to ensure safety and efficiency. Most high-efficiency models require dedicated PVC pipes for both air intake and exhaust, which are typically run directly through an exterior wall. Using an old chimney is not only against building codes but can also create a serious risk of carbon monoxide exposure.