If you’ve ever stood in a cold shower because your 40-gallon tank ran out, you already understand the frustration that drives most people toward tankless water heaters. But the bigger question isn’t why to switch, it’s how to do it right.Knowing how to install tankless water heater is not as straightforward as swapping one appliance for another. There are gas lines, electrical panels, venting systems, and local building codes involved. Get it right, and you’ll enjoy endless hot water and lower energy bills for 20-plus years. Get it wrong, and you’re looking at carbon monoxide risks, voided warranties, and expensive repairs.
At Derks Plumbing, we’ve installed hundreds of tankless systems across Los Angeles County. In this guide, we’ll walk you through everything from what to consider before you buy, to the actual installation steps, to the mistakes that cost homeowners thousands of dollars every year.
What Is a Tankless Water Heater?
A tankless water heater, sometimes called an on-demand water heater, heats water directly as it flows through the unit with no storage tank involved. When you open a hot water tap, cold water enters the unit, passes over a heat exchanger, and exits at your set temperature within seconds.
Gas models use burners ranging from 90,000 to 200,000 BTUs per hour. Electric models use resistance heating elements drawing 80 to 150 amps. Both types deliver hot water continuously, as long as demand doesn’t exceed the unit’s rated flow capacity.
The key difference from a traditional tank heater: you stop paying to keep 50 gallons of water hot around the clock. That standby energy loss accounts for 15–30% of a typical household’s water heating costs.
What Should You Consider For The Installation Process?
Before purchasing a unit or picking up a wrench, several factors will determine whether your installation is straightforward or complex.
Gas Line Capacity Most existing 1/2-inch gas lines cannot supply the volume a tankless unit demands. Upgrading to a 3/4-inch or 1-inch line from the meter to the unit is frequently required and typically costs $500–$1,500 depending on the run distance.
Electrical Requirements Even gas tankless units need a 120V outlet for controls and ignition. Electric tankless water heater installation is more demanding; most whole-home electric units require a 240V circuit with breakers ranging from 60 to 125 amps. Your main panel may need an upgrade before proceeding.
Venting Tankless gas water heater installation always requires direct venting to the exterior. The low exhaust temperature means old gravity-fed chimney vents won’t work. You’ll need either horizontal sidewall venting or vertical roof venting using manufacturer-specified stainless steel pipe.
Water Pressure and Hardness Incoming pressure over 80 PSI will damage the heat exchanger over time. If your home’s pressure runs high, add a pressure-reducing valve before the unit. In areas with hard water above 120 PPM, a whole-home water softener will significantly extend the unit’s lifespan.
Local Permits Most jurisdictions require permits for gas, plumbing, and electrical work. Inspections typically run $100–$300. Skipping permits can void your homeowner’s insurance and create problems when you sell the property.
Tools and Materials Needed
Tools:
- Two pipe wrenches
- Tubing cutter and deburring tool
- Propane torch (for copper soldering)
- Drill with spade bits and hole saw
- Level and tape measure
- Voltage tester
- Gas leak detector or soapy water solution
- Wire strippers and screwdrivers
Materials for Gas Installation:
- Black iron pipe and fittings (sized per your gas demand)
- Gas-rated shut-off valve and sediment trap
- Gas-rated pipe thread sealant
- Pressure test gauge
Materials for Water Lines:
- Type L copper pipe or approved flexible lines
- Ball valves for inlet and outlet isolation
- Pressure relief valve rated to 150 PSI
- Expansion tank (required if backflow prevention is present)
- Pipe insulation
Venting Materials:
- Manufacturer-specified stainless steel vent pipe
- Vent termination cap
- High-temp silicone sealant
Electrical Supplies (for electric tankless water heater installation):
- Minimum 6-gauge copper wire (or larger per unit spec)
- Double-pole circuit breakers sized to the unit
- Wire nuts and a junction box
Step-by-Step Guide: How to Install Tankless Water Heater
Step 1: Remove the Old Water Heater
Shut off the main water supply. Turn off gas at the meter or flip the circuit breaker for electric units. Attach a garden hose to the drain valve and open it fully. Open an upstairs hot water tap to break the vacuum and allow the tank to drain completely. This usually takes 20–40 minutes.
Once empty, disconnect the gas line at the union fitting. Disconnect both water lines. Use a hand truck to remove the old tank safely.
Step 2: Upgrade the Gas Line (Gas Units Only)
This is the step most DIY installations skip and it’s the one that causes the most problems.
Run a new black iron pipe line of the appropriate diameter from your gas meter to the installation location. Use two wrenches on every joint one to hold the fitting stationary, one to turn the pipe. Apply gas-rated thread sealant to male threads only; never apply it to female threads where it can break off and block the gas valve.
Install a tee fitting, a sediment trap (at least 3 inches of downward-pointing capped nipple), and a shut-off valve at the heater connection. After assembly, pressure-test the line at 15 PSI and hold for 15 minutes. Any pressure drop requires leak detection with soapy water before you proceed.
Step 3: Mount the Unit
Build a solid backing board of 3/4-inch plywood between studs if you’re installing on drywall the unit weighs 40–80 pounds fully filled. Use the mounting bracket included with your unit and check level in both directions. An unlevel installation can trap air and cause operational noise.
Maintain all required clearances specified in your manual. Typical requirements are 6 inches on sides, 12 inches above, and 6 inches below. Ignoring clearances creates fire risk and voids the manufacturer warranty.
Step 4: Connect the Water Lines
Install ball valves on both the hot outlet and cold inlet within 2 feet of the unit. These allow you to service the heater without shutting down your entire home.
When soldering copper, clean all mating surfaces with emery cloth until shiny, apply flux to both the pipe and fitting interior, heat the joint until flux sizzles, then feed solder into the joint not the flame. A properly made joint shows a complete ring of silver solder around the fitting.
Install the pressure relief valve on the hot outlet and run a discharge line to within 6 inches of the floor or directly to a drain. Never plug or redirect this line upward; it is a critical safety component.
If your home uses a check valve or backflow preventer on the main, install a 2-gallon expansion tank on the cold inlet side. Without it, thermal expansion has no relief path and will damage your system over time.
Step 5: Install Venting (Gas Units)
Use only the vent kit specified by the manufacturer. Generic pipe voids your warranty and, in some cases, creates carbon monoxide risks.
For horizontal sidewall venting, maintain a minimum slope of 1/4-inch per foot back toward the unit so condensate drains properly. Cut the exterior wall opening 1/2-inch larger than the vent pipe diameter, install the termination cap, and seal the exterior penetration with high-temp silicone.
Keep the vent termination at least 4 feet from any window, door, or air intake, 12 inches above grade, and 3 feet from any inside corner of the building.
Condensing units produce 1–2 gallons of mildly acidic condensate per day. This must drain to a floor drain, utility sink, or condensate pump never into a septic system or directly onto soil near the foundation.
Step 6: Wire the Electrical (Electric Units)
Switch off your main breaker before opening the panel. Use a voltage tester to confirm power is fully disconnected do not rely on the breaker label alone.
Install the required breakers. A 27kW unit typically requires a 125-amp breaker; check your unit’s specification sheet. Run the appropriate gauge wire from the panel to the unit location, securing it every 4.5 feet. Strip insulation carefully to avoid nicking the copper strands, then connect per the wiring diagram in your owner’s manual. Pull each connection firmly after making it to confirm it won’t vibrate loose over time.
All connections must be enclosed in an approved junction box with a cover plate; no open connections are permitted under code.
Step 7: Test and Start Up
Open the cold water supply slowly and inspect every connection for leaks. Purge air from the system by opening all hot water taps until water flows without sputtering.
For gas units, turn on gas at the shut-off valve and test every joint with soapy water. Do not proceed until you’ve confirmed zero bubbles at every connection.
Energize the unit. The display should illuminate. Set temperature to 110–120°F the recommended safe range that balances comfort with scald prevention.
Open a hot water tap. The unit should ignite within a few seconds and stabilize at your set temperature within 30 seconds. If it doesn’t fire or shows an error code, consult the troubleshooting section of your owner’s manual before attempting any further adjustments.
You can read about: How to Install a Heat Pump Water Heater
How Much Does It Cost to Install a Tankless Water Heater?
Full installation by a licensed professional typically runs between $1,500 and $4,500. Here’s what drives that range:
Item | Typical Cost |
Gas tankless unit | $800–$1,500 |
Electric tankless unit | $500–$900 |
Labor (basic install) | $500–$1,200 |
Gas line upgrade | $500–$1,500 |
Electrical panel upgrade | $1,500–$3,000 |
Venting installation | $300–$800 |
Permits and inspections | $100–$400 |
DIY electric tankless water heater installation reduces labor costs, but panel work still requires a licensed electrician in most jurisdictions. Tankless gas water heater installation must always be performed by a licensed gas fitter.
The good news: most gas units save $100–$150 annually in energy costs. Many utility companies also offer rebates of $200–$500 for high-efficiency models. Check dsireusa.org for incentives in your area.
Common Installation Mistakes to Avoid
Undersizing the Unit Calculates your peak simultaneous demand before buying. A master shower runs 2.5 GPM. A dishwasher adds 1.5 GPM. Morning usage with multiple fixtures running can easily require 8–10 GPM. In colder climates, incoming groundwater temperatures of 40°F demand significantly higher BTU capacity to reach 120°F output. Undersizing is the most common complaint we hear from homeowners who attempted their own installation.
Skipping the Gas Line Upgrade An undersized gas supply causes short-cycling, inconsistent temperatures, and error codes. Most homes have 1/2-inch lines that simply cannot support the flow rate a tankless unit demands. This upgrade is not optional, it’s foundational.
Using Wrong Vent Materials PVC, single-wall metal, and old chimney liners are not approved for tankless water heater installation. Only use materials specified in the unit’s installation manual. Carbon monoxide from improperly vented exhaust is odorless, colorless, and potentially fatal.
Forgetting the Expansion Tank If your home has a pressure-reducing valve, backflow preventer, or check valve, you have a closed system. Thermal expansion from the heated water has nowhere to go. Without an expansion tank, you’ll experience pressure spikes that gradually damage pipe joints, valves, and the unit itself.
Ignoring Minimum Flow Rate Most tankless units need at least 0.5 GPM to activate the burner or elements. Some low-flow fixtures especially older faucets may not meet this threshold, resulting in cold water output at those fixtures even after installation. Verify your fixtures’ flow rates before finalizing the installation.
When to Call a Professional
Some parts of this project are genuinely DIY-accessible for a skilled homeowner mounting the unit, connecting water lines with SharkBite fittings, or running new supply piping. But several tasks require licensed professionals in most U.S. jurisdictions:
Gas line work — Any modification to gas piping requires a licensed gas fitter. Mistakes cause leaks, fires, and carbon monoxide incidents. In most states, unlicensed gas work also voids homeowner’s insurance.
Electrical panel upgrades — Installing new breakers or upgrading service inside your main panel carries real electrocution risk. This is not the place to learn on the job.
Permit-required work — Professional installers know local codes, handle permit applications, and accompany inspectors. DIY jobs that fail inspection require expensive corrections.
No prior soldering experience — A single failed solder joint inside a wall cavity can cause thousands of dollars in water damage. If you haven’t sweated copper before, practice on scrap pipe before working on your actual system.
Find A Local Water Heater Professionals
Finding a qualified installer matters more than finding a cheap one. Look for contractors who carry state plumbing and gas fitter licenses, carry liability insurance of at least $1 million, and can provide written estimates that itemize labor, materials, and permit costs separately. Ask specifically whether they handle permit acquisition and what warranty they offer on labor.
If you’re in greater Los Angeles, the team at Derks Plumbing provides certified Tankless Water Heater installation in Eagle Rock with experienced technicians who understand LA County code requirements. We’ve performed hundreds of tankless installs gas and electric across 15 service areas throughout Los Angeles County.
Get at least three written quotes before committing, and verify each contractor’s license status through your state licensing board.
Conclusion
Understanding how to install tankless water heater gives you a real advantage whether you’re managing the project yourself or working with a contractor. You’ll ask better questions, avoid common oversights, and make smarter decisions at every stage.
If you take one thing from this guide, let it be this: the installation itself is only as good as the preparation that precedes it. Sizing the gas line correctly, choosing the right venting configuration, and ensuring your electrical panel has adequate capacity will determine whether your unit performs for 20 years or gives you problems from day one.
Ready to move forward? Contact Derks Plumbing today for a free consultation. Our certified technicians will assess your home’s existing infrastructure, recommend the right unit for your household’s demand, and handle everything from permits to final inspection so you get the job done right the first time.
FAQs
Can I install a tankless water heater myself?
Electric tankless water heater installation is within reach for homeowners with solid electrical skills, but gas installations require a licensed professional in most jurisdictions. Gas line work involves pressure testing, proper sediment traps, and strict code compliance mistakes creating fire and carbon monoxide hazards that put your household at risk.
How long does tankless water heater installation take?
A straightforward replacement where gas lines and electrical service are already adequate typically takes 4–6 hours. Installations requiring a gas line upgrade, panel work, or complex venting through multiple walls often span two full days. Your installer should be able to give you an honest time estimate once they’ve seen the existing setup.
Do tankless water heaters work well in cold climates?
Yes, but you need to size the unit for your local groundwater temperature. A unit rated for 8 GPM in Southern California may only deliver 5 GPM in a northern state where groundwater enters at 38°F. Always check the manufacturer’s GPM ratings at your specific inlet temperature, not just the headline capacity number.
What maintenance does a tankless water heater require?
In hard water areas, flush the heat exchanger annually to remove mineral buildup. This service costs roughly $100–$150 from a qualified plumber. Clean the inlet filter screen monthly by removing it and rinsing under running water. Inspect venting terminations each season for blockages from debris or pest nesting. With proper maintenance, a quality unit should provide 20 or more years of reliable service.
Is a tankless water heater worth the investment?
For most households, yes but the payback period matters. Gas units typically save $100–$150 annually in energy costs. At a total installed cost of $2,500, that’s roughly a 17-year payback on energy savings alone. However, the 20-plus-year lifespan versus 10–12 years for a tank heater, the elimination of standby heat loss, and the improved hot water availability make it a sound long-term investment, particularly if you’re already facing a tank replacement.
