Quick Answer: Choose a gas tankless water heater for a large household, multiple bathrooms, or a cold climate — it delivers far higher flow (roughly 5–12 GPM vs. 2–8 GPM for electric) and, where natural gas is available, costs about 10–15% less to run. Choose an electric tankless for a smaller or warm-climate home, an apartment/ADU, or point-of-use — it’s cheaper to buy and install, needs no gas line or venting, and runs ~99% efficient. The deciding factors are your peak GPM demand, your climate (cold water lowers electric flow the most), and whether you already have gas service.
Both electric and gas tankless water heaters give you endless on-demand hot water, but they suit very different homes. The choice really comes down to how much hot water you need at once, how cold your incoming water gets, and what utilities you already have. Here’s how they compare across the factors that decide it.
Electric vs gas tankless at a glance
| Factor | Electric Tankless | Gas Tankless |
|---|---|---|
| Peak flow rate | ~2–8 GPM | ~5–12 GPM |
| Efficiency | 98–99%+ at the unit | ~80–85% non-condensing; up to ~0.96 UEF condensing |
| Install cost | ~$800–$1,500 (may need panel upgrade) | ~$1,000–$1,500+ (gas line + venting) |
| Operating cost | Higher per unit of energy | ~10–15% cheaper where gas is available |
| Venting | None | Required (PVC or stainless) |
| Cold-climate performance | Weaker (flow drops with cold inlet) | Stronger (handles high demand) |
| Best for | Small/warm homes, apartments, point-of-use | Large homes, multiple baths, cold climates |
Flow rate: gas pulls ahead
This is the biggest difference. A gas unit like the Rinnai RU199iN can push up to ~11 GPM, enough to run two or three fixtures at once. The largest 36 kW electric units — the Stiebel Eltron Tempra 36 Plus or Rheem RTEX-36 — top out around 7–8 GPM in warm climates, and less when the incoming water is cold. Since an average home needs roughly 5.5–7.5 GPM at peak, gas clears that easily while electric pushes its biggest units to the limit.
Climate matters more for electric
Tankless GPM depends on temperature rise — how far the heater must lift the incoming water to your target temperature. In a warm Sunbelt climate the inlet water might already be 65–70°F, so even a modest unit hits its rated flow. In a Northern winter the inlet can be near 40°F, and the same unit may deliver half its rated GPM. This hits electric hardest, which is why gas is the safer whole-home choice in cold regions.
Efficiency and operating cost
Electric tankless is ~98–99% efficient at the unit with no venting or standby losses. Gas is less efficient at the unit (~80–85% non-condensing, up to ~0.96 UEF for condensing), but natural gas is usually cheaper per unit of energy — so where natural gas is available, gas typically costs about 10–15% less to operate. Some analyses put gas’s total cost of ownership several thousand dollars lower over 15 years despite the higher install, purely on fuel cost. If you only have propane or expensive gas, that advantage shrinks.
Install cost and complexity
- Electric: No venting, simpler placement — but a whole-home 36 kW unit can draw ~150A and may require a 200A panel and new dedicated circuits. In an older home, that electrical upgrade is the hidden cost.
- Gas: Needs proper venting (cheap PVC for condensing, pricier stainless for non-condensing) and possibly a larger gas line. That typically makes gas the more expensive install where the infrastructure isn’t already there.
Which should you buy?
- Large household / 3+ bathrooms / cold climate / already have gas: Buy gas. Start with our best gas tankless picks.
- Smaller or warm-climate home / no gas line / apartment or ADU: Buy electric. See our best electric tankless picks.
- Just one sink or shower far from the main heater: A small point-of-use electric unit is the simplest fix.
- Still weighing tankless against a tank at all? Read tankless vs tank.
The bottom line
Go gas if you have a large household, multiple bathrooms, or a cold climate and an existing gas line — you’ll get the higher flow and lower running cost. Go electric for a smaller or warm-climate home, an apartment, or point-of-use, where the simpler, cheaper install and ~99% efficiency win. Match the unit to your peak GPM and climate, confirm your gas line or electrical panel can support it, and you’ll get endless hot water either way.