Learning how to install tankless water heater is the best way to cut energy bills and get hot water whenever you need it. The process involves mounting the unit, connecting water and gas or electrical lines, and setting up the right vent system. It takes a skilled DIYer about 4 to 8 hours, but if done right, it pays off for 20 years or more.
This guide walks you through every step of tankless water heater installation. You will get clear steps for both gas and electric models, a full tools list, costs, common mistakes, and expert tips from licensed plumbers at Derks Plumbing.
What Is a Tankless Water Heater?
A tankless water heater, also called an on-demand water heater, heats water only when you turn on a faucet. Unlike a traditional tank, it does not store hot water. Cold water flows through a heat exchanger inside the unit. A gas burner or electric heating element brings it up to your set temperature in seconds.
The result? You never run out of hot water. And you stop paying to reheat 40 to 80 gallons all day long, even when no one is home.
Here is a quick comparison:
Feature | Tankless Heater | Tank Heater |
Hot water supply | Unlimited (up to GPM limit) | Limited by tank size |
Energy use | Heats only when needed | Heats constantly (standby loss) |
Lifespan | 15 to 20+ years | 10 to 12 years |
Size | Wall-mounted, compact | Large floor unit |
Upfront cost | Higher | Lower |
According to the U.S. Department of Energy, tankless units are 24% to 34% more energy efficient than storage tank heaters for homes that use around 41 gallons of hot water per day.
What Should You Consider For The Installation Process?
Do not buy a unit and start drilling. A few upfront checks will save you big headaches later.
1. Size the Unit Correctly (GPM and Temperature Rise)
GPM stands for Gallons Per Minute. It tells you how much hot water the unit can deliver at once. Add up the flow rates of every fixture you might run at the same time.
- Kitchen faucet: 1.5 GPM
- Shower: 2.0 GPM
- Dishwasher: 1.5 GPM
- Washing machine: 2.0 GPM
If you run a shower and the kitchen sink at once, you need at least a 3.5 GPM unit.
Temperature rise matters too. If your incoming cold water is 50 degrees F and you want 120 degrees F, the unit must raise the water 70 degrees. Colder climates need a higher BTU unit to hit that number.
Pro Tip: Undersizing is the most common DIY mistake. Always go slightly larger than you think you need.
2. Gas Line Capacity
Most gas tankless heaters need a 3/4-inch gas line. Many older homes only have a 1/2-inch line. A line that is too small will starve the unit for fuel. You will get error codes, cold water, and damage to the heat exchanger over time.
Check your gas meter capacity too. A large tankless unit can pull 199,000 BTU or more. Your meter must be rated to handle that load.
3. Electrical Panel Capacity
Electric tankless water heaters pull a lot of power, often 120 to 200 amps. Older electrical panels may not support that. You may need a panel upgrade before the electric tankless water heater installation can happen.
4. Venting (Gas Models Only)
Your old tank vent will not work. Tankless gas heaters need one of three vent types:
- Direct vent: Pulls air from outside and exhausts outside through concentric pipes
- Power vent: Uses a fan to push exhaust out through a single pipe
- Atmospheric vent: Relies on natural draft (less common in modern units)
Condensing models can use PVC or CPVC pipe since exhaust temperatures are lower. Non-condensing models need Category III stainless steel vent pipe because exhaust can exceed 300 degrees F.
5. Water Quality
Hard water is the enemy of tankless systems. Calcium and lime build up inside the heat exchanger and block water flow. If your area has hard water, install a water softener upstream of the unit. Plan to flush the system with white vinegar once a year using an isolation valve kit.
6. Permits
Most cities require a permit for tankless water heater installation. Skipping it can cause issues when you sell your home or make an insurance claim. Always check with your local building department first.
Tools and Materials Needed
Having the right tools before you start prevents mid-job trips to the hardware store.
Tools
- Pipe wrench and adjustable wrench
- Pipe cutter (for copper) or PEX crimping tool
- Drill and masonry bits (if mounting on concrete or brick)
- Level
- Manometer (to check gas pressure)
- Gas leak detector or sniffer
- Voltage tester (for electric models)
- Teflon tape and pipe thread sealant
- Bucket and shop towels
Materials
- Tankless water heater unit (properly sized for your home)
- Isolation valve kit with hose connections
- 3/4-inch gas line connector and CSST supply line (gas models)
- Category III stainless steel or PVC vent pipe (depending on unit type)
- Flexible water supply lines
- Pressure-reducing valve (if water pressure exceeds 80 PSI)
- Sediment trap and shut-off valve (gas models)
- Expansion tank (if you have a closed plumbing system)
- Condensate trap and drain line (condensing gas models only)
Step-by-Step Guide: How to Install Tankless Water Heater
Step 1: Turn Off All Utilities
Before you touch anything, shut off the main water supply to your home. Turn off the gas at the main valve. Flip the circuit breaker for your water heater to the off position. Open a hot water faucet somewhere in the house to release pressure from the lines. Let it drip until it stops.
Step 2: Remove the Old Water Heater
Disconnect the cold water inlet and hot water outlet lines. Use a bucket to catch any water left in the pipes. For gas heaters, disconnect the gas line at the union fitting. For electric heaters, cap the wires safely after confirming the breaker is off. Disconnect the vent pipe.
Drain the old tank fully by connecting a garden hose to the drain valve at the bottom. Once empty, remove the unit. Do not put it in the trash. Contact a local recycling or hazardous waste center. Old tanks can contain sensors with mercury.
Inspect the wall for water damage before moving on. Repair any soft drywall or rot now.
Step 3: Mount the New Unit
Choose a solid wall location close to your main hot water usage points. For whole-house systems, a central location near the gas line and water main works best.
Use the mounting template that comes with your unit. Mark the wall and check with a level. Drive lag bolts into wall studs for a secure hold. If there are no studs in the right spot, use a 3/4-inch plywood backing board first.
Hang the unit on the mounting bracket. Confirm it is level and stable. Tankless units get heavy when water fills the lines.
Step 4: Connect the Water Lines
Connect the cold water inlet and hot water outlet using the isolation valve kit. These valves are not optional. They let you flush the system with vinegar each year without cutting the pipes. Without them, you cannot clean out mineral buildup and the unit will fail early.
Use copper pipe or PEX-B depending on your local building codes. Wrap all threaded connections with Teflon tape. Tighten fittings snugly but do not over-torque.
If your home water pressure exceeds 80 PSI, install a pressure-reducing valve on the cold water inlet line. High pressure damages the internal components over time.
If you have a closed plumbing system, install a small expansion tank on the cold water line near the unit. Closed systems have no place for expanded water to go, and pressure spikes can damage the heater.
Step 5: Connect the Gas Line (Gas Models Only)
Run the gas line from your existing supply to the unit. Install a sediment trap (also called a drip leg) directly before the unit. It catches dirt and debris that could clog the gas valve.
Install a dedicated shut-off valve on the gas line so you can service the unit without cutting supply to the rest of the house.
Use a CSST supply line or rigid black iron pipe as required by your local code. Connect using an approved gas line connector. Tighten all fittings firmly.
Use a manometer to check gas pressure. Most units require between 4 and 10 inches of water column (WC) for natural gas. Check your unit’s manual for the exact spec.
After connecting, turn the gas on slowly and check every joint with a spray bottle of soapy water. Bubbles mean a leak. Do not move forward until every joint is bubble-free.
Step 6: Install the Vent System (Gas Models Only)
Run the exhaust vent pipe from the unit to the outside of your home. Follow the manufacturer’s clearance rules exactly. The vent termination point must be at least 12 inches from any window, door, or air intake.
Vent pipes must slope away from the unit slightly so any condensation drains out rather than back into the burner. A 1/4-inch slope per foot is standard.
Use the correct vent material. Condensing units (which produce cooler exhaust) can use PVC or CPVC. Non-condensing units need Category III stainless steel. Using the wrong material is a fire risk.
For condensing units, install the condensate trap and run a drain line to a floor drain or condensate neutralizer. Do not skip this step or the unit will shut down on error.
Step 7: Connect the Electrical (Electric Models)
Electric tankless water heater installation requires dedicated circuit breakers. Most whole-house units need two or three 40- to 60-amp double-pole breakers. Check your unit’s wiring diagram for exact requirements.
Run the correct gauge wire from your breaker panel to the unit. The wire gauge must match the breaker size. Under-gauged wire is a fire hazard.
All connections must follow NEC (National Electrical Code) guidelines. If you are not confident in high-voltage wiring, hire a licensed electrician for this step. This is not where to cut corners.
For gas models, most units still need a standard 120V outlet nearby for the control board, fan, and igniter.
Step 8: Test the System
Turn the water supply back on slowly. Open the isolation valves. Check every water connection for drips.
For gas units, turn the gas back on and re-check all joints with soapy water. Then restore power and follow the manufacturer’s start-up procedure to light the unit.
For electric units, restore power at the breaker panel.
Open two or three hot water faucets in the house. Let water run for two to three minutes. Check for consistent temperature and strong flow. Set the thermostat to 120 degrees F, which is the safe standard for most homes.
Check the unit’s display for any error codes. Consult the manual if any codes appear before moving on.
You can read about: How to Install a Heat Pump Water Heater
How Much Does It Cost to Install a Tankless Water Heater?
Costs vary depending on unit type, your home’s existing infrastructure, and whether you DIY or hire a pro.
Cost Item | DIY Cost | Professional Cost |
Electric tankless unit | $300 – $700 | $300 – $700 |
Gas tankless unit | $500 – $1,500 | $500 – $1,500 |
Labor (electric) | Your time | $300 – $600 |
Labor (gas) | Your time | $500 – $1,000 |
Gas line upgrade (if needed) | $250 – $800 | $250 – $1,200 |
Electrical panel upgrade (if needed) | $300 – $1,000 | $500 – $2,000 |
Venting (gas models) | $100 – $300 | $200 – $500 |
Total estimate | $400 – $2,000 | $1,500 – $3,500 |
Electric models cost less to install but may cost more to run monthly depending on local electricity rates. Gas models cost more upfront because of venting and gas line work, but they typically deliver better long-term savings.
Common Installation Mistakes to Avoid
Undersizing the Gas Line
A 1/2-inch gas line cannot feed a high-BTU tankless unit. The unit will starve for fuel, trigger error codes, and deliver cold water. Always upgrade to a 3/4-inch line if needed.
Skipping the Isolation Valve Kit
Without isolation valves, you cannot flush the heat exchanger with vinegar. Mineral buildup will eventually kill the unit. Install them during the original install, not later.
Using the Wrong Vent Material
Using a B-vent or standard flue pipe on a non-condensing tankless unit is a fire hazard. Always use Category III stainless steel. For condensing units, use PVC or CPVC as specified by the manufacturer.
Incorrect Vent Slope
Vent pipes must slope away from the heater so condensation drains out. If the pipe slopes toward the unit, water drips into the burner and causes damage.
Skipping the Expansion Tank
If your home has a closed plumbing system, pressure has nowhere to go. Without an expansion tank, pressure spikes can damage the unit and your pipes.
Skipping the Sediment Trap
A sediment trap on the gas line catches debris before it enters the gas valve. Skipping it risks a clogged valve and a dead unit.
Not Checking Gas Pressure
If inlet gas pressure is too low or too high, the unit will not fire correctly. Use a manometer to verify pressure before starting the unit for the first time.
Forgetting the Permit
An unpermitted install can void your warranty and cause problems when selling your home. Always pull the required permit before starting work.
When to Call a Professional
Some parts of a tankless install are DIY-friendly. Others are not.
Call a licensed plumber or HVAC technician if:
- You need to upsize or reroute the gas line
- Your gas pressure is not within spec
- You are not comfortable with high-voltage electrical work
- Your electrical panel needs an upgrade
- Local code requires a licensed contractor to pull the permit
- You are converting from a tank to a tankless system for the first time
A professional install done right the first time is far cheaper than fixing a mistake. Gas leaks and electrical fires are not risks worth taking to save a few hundred dollars.
Find A Local Water Heater Professionals
If you are in the Los Angeles area and want the job done right, Derks Plumbing handles full Tankless Water Heater Installation in Eagle Rock. Our licensed plumbers manage everything: gas line sizing, correct venting, permits, and code-compliant hookups for both gas and electric models.
We have served Eagle Rock and the greater Los Angeles area for years. We know the local codes, use the right materials, and never cut corners. Whether you need a simple swap or a full conversion from a tank system, we get it done safely and efficiently.
Call Derks Plumbing today or fill out our online form to schedule your tankless water heater install.
Conclusion
A proper tankless gas water heater installation or electric tankless water heater installation will deliver hot water on demand for 20 years or more. The key is doing it right: size the unit correctly, use the right vent materials, upgrade the gas line if needed, install isolation valves, and pull the permit.
Follow the steps in this guide and you will avoid the most common mistakes. When in doubt, especially with gas lines or high-voltage wiring, call a licensed plumber. The cost of professional help is always less than the cost of fixing a dangerous mistake.
FAQs
Can I install a tankless water heater myself?
Yes, if you are comfortable with plumbing, basic gas work, and your local codes allow it. Electric models are easier for DIYers. Gas models require more expertise, especially for venting and gas line sizing. Always pull the required permit.
How long does tankless water heater installation take?
A skilled DIYer typically needs 4 to 8 hours for a full install. A direct unit swap on an existing tankless setup takes 1 to 3 hours. A licensed plumber can often finish in 2 to 4 hours.
Do I need a permit to install a tankless water heater?
In most cities, yes. A permit ensures the installation gets inspected for safety. Skipping it can void your warranty and create issues when you sell your home. Check with your local building department first.
What size tankless water heater do I need?
Add up the GPM of all fixtures you might run at once, then factor in your temperature rise (incoming cold water temp versus desired output temp). Most whole-house systems need 7 to 10 GPM with a temperature rise of 60 to 70 degrees F.
Can I use the same vent pipe from my old tank heater?
No. Tankless gas heaters require different vent pipe materials and configurations. Non-condensing units need Category III stainless steel. Condensing units use PVC or CPVC. Never use a B-vent or standard flue pipe on a tankless unit.
How often does a tankless water heater need maintenance?
Flush the heat exchanger with white vinegar at least once a year. Homes with hard water should flush every 6 months. This is why isolation valves are critical during the install. Also clean the inlet filter screen annually.
