Propane vs. Electric – Which One Is Right for You?

A Propane Tankless Water Heater or an Electric Tankless Water Heater. Which is Right for You?

Tankless water heaters are a great way to improve your hot water efficiency and ensure that

you have an adequate supply of hot water for your family’s daily routine. Sometimes known as

“on-demand” water heaters, they also free up space by eliminating the need for a large hot

water heater. Tankless water heaters can be either electric or propane. Let’s explore the cost,

efficiency, and sustainability of both types.


There are three important cost elements to consider when searching for a tankless water

heater: cost of the unit, cost of installation and cost of operation.

Propane tankless water heaters may cost $3500 per unit. The installation can be very expensive

due to complex venting and combustion air supply requirements, which requires hiring a

professional to pipe the unit properly.

Electric tankless water heaters cost about $500 – $1200 per unit. They can be installed closer to

the source where hot water is needed because they have a smaller profile and do not require

ventilation, so no home retrofit should be required.


Newer propane tankless water heaters can get efficiencies of up to 98% while electric tankless

water heaters operate at the same efficiency. But, propane gas is cheaper than electricity which

means you save more money annually by choosing a propane tankless water heater.


Propane gas is considered the cleanest burning fossil fuel, so it is more environmentally friendly

than using electricity. Both types of tankless water heaters should be expected to last about 20

years, which is significantly more than the 10-year average of traditional tank hot water heaters.

For propane tankless water heaters, an annual service inspection is recommended to ensure

proper operation throughout the system. Electric tankless water heaters do not need annual


It is important to research the total cost of a tankless water system before choosing to install

one. It will pay for itself over time through energy savings. There are many other reasons to

choose a tankless water system. Hot water on demand is nice to have if you are the last one in

the shower in the morning. The space required for a tankless system is also significantly smaller

than that of a tank, which free up lots of storage space in your home.

Contact our professionals at American Air Heating & Air Conditioning to discuss which

tankless heater may be right for you.