Propane v Electric Tankless Heater: Which Is Best?

propane v electric tankless heater

You finally decided to go tankless, and then, there is another decision to make- which tankless heater is the best? In a battle between an electric tankless and propane tankless water heater, we should consider all the factors, pros and cons of each heater and put it in relation with homeowner’s needs and expectations to get a wider picture of which one prevails.

In most of the time, our choice between these two will be deterred by the lack of electrical power or availability of natural gas or propane to our home.

Now, let’s leave the availability aside (assume that you can pick either one of them) and try to figure out which one is better, propane or electric tankless heater.

Price and installation

Let’s take baby steps, and start from the beginning. The only thing that seems pretty clear is the price- we can declare our winner right now (for this round at least). So, if we take typical examples of both tankless heater types, we can see that the difference goes up to $500 between these two.

While you can find an electric water heater for $500- $700, propane tankless heater would require a bit bigger investment (around $1000-$1200).

Installation costs differ, and are mostly defined by the desired location of installation, and the availability of adequate power source (gas, electricity).

Electric tankless water heaters are very high power appliances. Since they run completely on demand and must do the job of a traditional, storage water heater in a few moments rather than throughout a whole day, the peak electrical consumption of an electric tankless water heater is relatively high (but still a lot less electricity consumption overall).

As well, in cold areas or demanding applications (high flow rate), it may be needed for the house or business to have a 200 AMP electrical service to run an electric tankless water heater. For less demanding applications or in warmer areas, only a 100, 125, or 150 AMP electrical service will be enough.

This is an important thing to bear in mind as not all houses and businesses have such electrical power available and upgrades can often be expensive.

On the other side, installation of a propane tankless water heater would be a highly uneconomical solution if your building/house doesn’t already have an existing propane service. In many situations, the installation of a gas tankless water heater demands that the diameter of the incoming gas line to be increased to handle the additional fuel requirements of a gas tankless water heater.

On top of it, propane tankless heaters demand appropriate venting system. That can escalate quickly to a really expensive project, especially if sidewall venting is a must.

Also, keep in mind that regular, existing vent systems simply won’t be enough, and that you’ll probably need a specialized air vent system due to high-gas consumption.

Of course, doesn’t mean that you will necessarily spend money on everything of the aforementioned, but it’s nice to consider and predict such expenses.

Due to the size of an electric tankless water heater, it will be pretty easy to install them almost anywhere you want. On the other side, propane tankless water heaters won’t offer such versatility of installation locations.

So, the bottom line is that electric tankless water heaters are much more cost effective, especially if you are facing some difficulties of installing propane tankless water heater that we mentioned above.

Flow rate

You probably already know what flow rate means. It’s a measure for gallons of hot water per minute. Shortly, if you are living in a regular household with 2-3 family members, this one might not be that important to you.

A properly sized electric tankless water heater can produce from 4 gallons to 8 gallons of hot water per minute, all depending on the area you are leaving in (hot or cold) and the exposure of your tankless water heater to weather conditions.

If your habits, patterns of water usage are normal, even 4 gallons per minute will be enough. However, if you need more than 8 gallons per minute (intend to run several large appliances), then a propane tankless water heater is what you are looking for.

True, they are a bit pricier, but electric heater can’t compete with the flow rate of a propane tankless water heater.

Therefore, when the flow rate is in the matter, propane tankless water heaters are unmatched.

Energy costs

We have come to the most important part- operating costs. Shortly, propane gas heaters are (on average) 10-15% cheaper than electric tankless water heaters. That’s the shortest answer.

Keep in mind that the prices vary and that 10-15% can also vary. At present, with the prices of gas and electricity such as they are, we can definitely say that electric tankless heaters are more cost-effective.

The thing worth mentioning is the thermal efficiency. You might have already learned that electric water heaters are up to 99% thermally efficient.

On the other side, we have propane tankless water heaters which are (in best case scenarios) 80% to 85% energy efficient. Even though propane is much cheaper fuel than electricity, this efficiency can really make a difference. On top of efficiency, we have a longer service life, and cheaper installation costs. All of these can easily outweigh the small current operating cost difference which would amount to only a few dollars per month for most families.

Since tankless heaters can last up to 30 years, there are some things that need to be considered on the long-run.

Let’s do some statistics. Between 1994 and 2005, consumer electricity prices rose 12.8%. Can you guess how much was it in the gas scenario? 114.5%!!! Almost every analysis says that the natural gas will not stop at that 114.5%. We are in 2019, and imagine how much will the price of gas be in 2039. True, electricity price is also forecast to grow, but at a much slower rate.

So, what if some world gas shortage occurs in the future? The prices of propane will whoop to 1000%, I guess. And right out of the blue, you are left with no hot water at all, due to uneconomical heating prices.

On the long run, statistically is more likely that electric tankless water heater will be more cost-effective. And when I say “long-run” I mean in the next few years- the future is near.

Environmental impact

You are already familiar with the greenhouse gas emissions situation. As consumers, we are encouraged to reduce any type of gas usage and therefore its emission, and save the planet if possible. So, if you ask me, electric water heaters are more environmentally friendly solutions.

While switching from storage water heater to any type of tankless system is a good environmental choice, in most regions, especially those that generate electricity from sources that do not increase greenhouse gases (hydro-electric generators, nuclear, wind, etc.), switching to a tankless electric heater is even a better choice.

Keep in mind that much fewer resources and energy are used to manufacture an electric tankless water heater (as they are significantly smaller).


When it comes to maintenance, electric tankless water heaters are pretty straightforward- all the parts are easily changeable. Other than ensuring that the inlet screen filter that prevents large debris from entering the system is free and clear of obstructions, no maintenance is required.

On the other side, propane tankless water heaters need at least once in a year inspection to ensure the safety of operation and combustion.

Overall, electric tankless water heaters tend to be much easier to maintain, troubleshoot, diagnose, and repair.


If we take into account everything mentioned above, we may easily conclude which one is better. If you are asking me, I would always go with the electric type over propane. With the enormous rise of gas prices, the cost-effectiveness of the propane tankless water heater is endangered.

So, to sum it up:

Electric tankless water heaters come at a lower price, but the installation process might be a bit pricier. It all depends on the location where you intend to install it. Propane tankless water heater offers much better flow rate, but if you don’t intend to use more than 8 gallons per minute, electric heaters will do the job just fine.

Electric tankless heaters are more energy efficient, as they operate at 99% of efficiency! On top of it, they are more environmental (eco) friendly, and the maintenance is less demanding than with propane type.

The winner is clear, it’s only left for you to decide which one you prefer!

Hopefully, this article gave some insight into who prevails- Electric tankless water heater vs propane tankless water heater.

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