Condensing vs. Noncondensing Tankless Water Heater: Which is the Better Option?

Do you often find yourself taking cold showers if you are second in line to get ready in the morning? If your water heating tank isn’t doing its job in your household, investing in a tankless water heater may be the best decision you’ll ever make. These water heaters provide an endless stream of hot water, no bulky water tank required. 

Overall, condensing tankless water heaters have better efficiency ratings, last longer, and are better for the environment. The primary difference between condensing and non-condensing tankless water heaters is how they handle steam. 

However, both condensing and non-condensing tankless water heaters are excellent options for homeowners looking to do away with hot water tanks.

Compared: Non-Condensing and Condensing Tankless Water Heaters

Efficiency Rating0.81 UEF0.91 UEF (better)
Environmental ImpactMuch better than a regular water heater, but not as great as a condensing systemLower carbon footprint than non-condensing model
InvestmentLess expensive installationMore expensive installation
InstallationEasier installation: connects directly to home’s preexisting ventilation systemTrickier installation: two heat exchangers necessary instead of one in non-condensing model
Longevity Exhaust and ventilation system may wear out faster than condensing modelsPipes may wear out faster than non-condensing models
SavingsLess savings as it instantly releases vaporMore savings due to recycling of byproducts

Thanks to tankless water heaters, the days of waiting 30 minutes to shower after your housemate are over. The only question is whether to purchase a condensing or non-condensing model. 

What Is A Tankless Water Heater?

A tankless water heater does away with this contraption and heats water instantaneously. As the water flows through pipes, heat exchanger coils warm the fluid on the way to its destination. 

A tankless water heater’s main perk is that, unlike a standard system, there is an endless hot water supply. This is an outstanding feature, especially for large households that quickly deplete their water tank. Once installed, they work incredibly well to heat your home’s water and have a great lifespan compared to traditional water heaters.

Tankless Water Heater

Note: Tankless water heaters also go by inline, flash, instantaneous, instant-on, on-demand, and continuous flow water heaters. Don’t get confused; they’re all the same thing. 

How is Water Heated in a Tankless Water Heater?

A tankless water heater works by sensing when water flows through your home’s pipes and heating it to the desired temperature. A negative feedback loop raises the temperature to be as hot as you would like. This functions by sending the water back through the pipes until it reaches the perfect temperature. 

When water isn’t flowing, the heater automatically turns off. Not only is this an excellent safety feature, but it also has both energy-saving and cost-saving benefits. A typical water heating tank is constantly working. This isn’t the case with a tankless heater. 

Tankless water heater system

The main contraption in a tankless water heater is a copper heat exchanger. They have a high thermal conductivity which means that they are excellent heat conductors. In turn, your home’s water supply can get hot incredibly fast. 

The coils can endure heat up to 1000 degrees Celsius. Yes, getting water to reach this temperature is impossible. 

However, a heatless water tank is an excellent option for those who like boiling hot showers. Either electric or gas heating can warm up a tankless water heater; whichever you use for your home is perfect. Some models are even powered by wind. 

Both condensing and non-condensing tanks have excellent reliability, sustainability, and cost-effectiveness. However, an essential difference separates the two on the market. 

What’s The Difference Between Condensing And Non-Condensing Tankless Water Heaters?

The primary difference between condensing and non-condensing tankless water heaters is how they handle steam. When water heats, it produces a vapor that can cool on various household appliances and lead to additional wear and tear. 

Both deal with this steam in different ways. Non-condensing models immediately vent it away, while condensing water heaters recycle the moisture. There are pros and cons to both, although the majority of models are non-condensing. 

Non-condensing tankless water heaters populate the vast majority of the market. They have excellent features, like connecting to a preexisting venting system. However, they also tend to be more costly than condensing models. 

How Does Non-Condensing Tankless Water Heater Works?

A non-condensing model functions by immediately venting steam from the unit after its use. This, in turn, cools down the tankless water heater. These systems can get much hotter than condensing heaters which is why this vapor release is essential. We’re talking upwards of 300 degrees Fahrenheit. 

Non-Condensing Tankless System

Unlike condensing models, this tankless water heater model only has one heat exchanger instead of two. This exhaust would be looped back through the heating system in a condensing model. 

The Pros Of Non-Condending Water Heater 

Cheap Initial Setup and Installation
One of the biggest perks of the non-condensing water heater is set up. Since it attaches directly to a home’s preexisting ventilation system, the setup is fast and affordable. 

They Drain Immediately
Unlike condensing water heaters, non-condensing heaters drain their excess fluid and fumes immediately. This means that there is low corrosion from the buildup of vapor. It is excellent for longevity. 

They Are Energy Efficient
Non-condensing heaters are incredibly energy efficient as they do not need to stay on constantly to heat water. If you are trying to save some money on the electric bill, these are a great option compared to a standard water heater. 

The Cons

Loses 30% of Combustion Gas: Don’t get us wrong, non-condensing heaters are still an environmentally friendly option compared to standard tanks. However, they release more carbon emissions than condensing models. 

Pricy Venting Costs: Due to how high the temperatures of emissions can get, venting non-condensing water heaters can get costly. However, the price saved on energy still outweighs this cost. 

Condensing water heaters recycle the extra heat vapor created from producing hot water, making them more cost-effective and energy-saving. However, they can be more expensive to install as they do not connect to your home’s preexisting ventilation system like non-condensing heaters. 

How Does A Condensing Tankless Water Heater Works?

Condensing water heaters work by holding onto water vapor to reuse it in the process of heating. Once this vapor is no longer needed, the system disposes of it. This is considered a closed system. 

The vapor produced in a condensing system is much cooler than in a non-condensing system, so expensive venting installation isn’t necessary. Vapor is cooled in a secondary unit before being recycled back into the water supply. 

Condensing Tank System

The Pros of A Condensing Tankless Water Heater

Cheap Maintenance
Since the pH level of the acidic vapor is not high enough to corrode metal, maintenance is affordable for condensing tanks. They also only require PVC venting since the vapor temperatures are lower. 

Great for the Environment
Compared to a standard water heater and a non-condensing model, the condensing heater is the best environmental option. The small amount of waste that they produce is safely disposed of. 

Energy Saving
Condensing tanks are the most cost-effective option when it comes to your energy bill. They also have an efficiency score of 90% or higher, so they are top-of-the-line energy savers. 

Excellent in Colder Places
Condensing tankless water heaters heat quickly and with low energy consumption. This makes them the perfect heater in colder climates.  

What Are The Cons 

Setup is Expensive and Complex
A condensing system requires an expert, as you must install new gas lines and venting systems. A Condensing water heater unit can also range from $600 to $1800, not including setup costs. 

Best Tankless Water Heaters

There are plenty of excellent tankless water heaters on the market. They come in a range of prices and can have different features. Some also have lower setup costs than others. 

Rheem RTEX-18 Tankless Water Heater: Although Rheem’s brother model, the RTEX-24, has a higher water flow rate, the RTEX-18 is the clear winner. It has a rating of 9.8/10 on Buyers Guide and an energy efficiency ratio of 99.8%. It is the most environmentally friendly model on the market. This model offers a 4.4 gallons per minute (GPM) hot water flow rate, small dimensions, and an electric heating system. 

Rheem RTEX-18

Camplex AY132 Portable Tankless Water Heater: Not only is this an extremely cost-effective model, but it is also portable! This makes it an excellent choice for individuals trying to heat water in campers and mini homes. It is powered by propane, can hold 5L of tap water, and is highly ranked for energy efficiency. 

Camplex AY132

Rinnai V Series Tankless Water Heater: This model is ENERGY STAR certified and has an excellent hot water flow rate of 6.5 GPM. You can also purchase it for under $700. It can be powered by either natural gas or propane, depending on your home’s heating system. 

Rinnai V Series

Best Condensing Water Heaters

Non-condensing models tend to dominate the market. However, condensing water heaters may be the better option. There are plenty of great ones that are cost-effective, energy efficient, and great for your personal hot water needs. 

Rinnai RUC98iN: Rinnai, once again, makes the list of the top three best tankless water heaters. This condensing model has a lot going for it. One of the most interesting aspects of it is that both wind and natural gas power it. This makes it extremely energy efficient and great for the environment. It also has a space-saving design and ultra-low NOx emissions. 

Rheem RTGH-84DVLN: This model is gas-powered and comes with a cord to connect to your home’s source of electricity. It is one of the smaller models at only 9.75X18.5X27.5 inches. The flow rate is also high at 8.4 GPM. This Rheem model also ranks highly for carbon footprint and is great in colder climates. It can withstand outdoor temperatures as low as -30 degrees Fahrenheit. 

Noritz NRC66DVNG: This model by Noritz is low NOx and has an excellent energy efficiency rating. It provides an endless stream of hot water. Bonus: It has easy ventilation, making installation less of a hassle. 

The Installation

Installing a tankless water heater isn’t exactly an easy DIY project. Calling a professional to consult and install may be your best option if you want one in your home. Especially if you plan on using a condensing model. It can be tempting to save money and do it yourself, but having a professional do the heavy lifting may save you maintenance costs and stress later. 


Tankless water heaters are excellent options for homeowners who want a more cost-effective, environmentally friendly, and energy-efficient water heater. 

Both condensing models and non-condensing have pros and cons that should be considered before purchasing yours. 

While non-condensing models are easier and cheaper to install, condensing water heaters are the best option due to their small environmental impact and energy-saving potential. In the long run, you will pay less for a condensing heater than a non-condensing one. 

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