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Tankless Water Heaters in Ontario: When They Make Sense, When a Heat Pump Water Heater Beats Them, and Sizing for a Real House
Heating and efficiency Hot water From a builder
Tankless Water Heaters in Ontario: When They Make Sense, When a Heat Pump Water Heater Beats Them, and Sizing for a Real House
We installed our first tankless units twenty-five years ago when they were exotic, and we still install them, but not everywhere, and not for the reason the brochure gives. Hot water is about a fifth of a house’s energy, which makes the heater worth ten minutes of thought.
Short version: A gas tankless (on-demand) water heater heats water only when a tap opens, so it has no standby loss, lasts 20 years, mounts on a wall and never runs out, and a condensing unit is 94 to 98 percent efficient. Installed in a new Ontario house it costs $3,500 to $6,500, more if the gas line and venting need upgrading. It needs to be sized for our incoming water temperature (5 degrees C in winter), which means a big unit for two showers at once; it needs annual descaling on hard water; and electric tankless is impractical for a whole house on a normal service. Where there is no gas, or where energy use is the goal, a heat pump water heater ($3,000 to $5,000) uses half to a third of the energy of either and is the better buy. A combi tankless boiler can run radiant floors and domestic hot water from one box in a small, tight house.
How it works and what it saves
A storage tank keeps 150 to 230 litres hot all day; the standby loss is 15 to 25 percent of a household’s water heating. A tankless unit fires a modulating burner when it senses flow, heats the water passing through, and stops. No standby loss, no running out, a box the size of a carry-on suitcase on the wall. Condensing models squeeze the exhaust for the last few points of efficiency and vent in plastic pipe. Against a standard gas tank, expect 20 to 30 percent less gas for hot water; against a power-vented high-efficiency tank, less than that. The saving is real and modest; the endless shower and the floor space are what people actually notice.
Sizing for Ontario
Tankless units are rated in litres (or gallons) per minute at a given temperature rise. Our incoming water is 4 to 8 degrees C in winter, so raising it to 45 is a 40-degree rise, which cuts a unit’s flow to about half its brochure number. A shower is 7 to 9 litres per minute; two showers and a dishwasher at once is 20 or more. In practice a family house needs the largest residential unit (around 200,000 BTU) or two units, and the gas line has to carry it: a 3/4 inch or 1 inch line from the meter, which an existing 1/2 inch furnace line will not. Undersizing is the most common tankless complaint and it shows up in January. Plumbing in a new house covers where it sits in the system.
Where it makes sense
- A house with gas at the road that wants endless hot water and the floor space, and will accept a modest energy saving over a tank.
- A small, tight house or cottage on radiant floors, where a combi unit (one tankless boiler for the floor and the taps) saves a separate boiler. We have done this on cottages for years; size the heating side from a heat loss, not from the hot water. Radiant floor heating cost covers the rest of that system.
- A booster for a solar thermal system or a snow-melt loop.
- Replacing a tank in a mechanical room with no space for a heat pump unit.
Where something else is better
| Situation | Better choice | Why |
|---|---|---|
| No gas line (rural, all-electric house) | Heat pump water heater, $3,000 to $5,000 | Electric tankless for a whole house needs 100 amps or more; a heat pump tank uses a third of the energy of any electric heater |
| Energy use is the goal | Heat pump water heater | Uses half to a third of the energy of a gas tankless, no combustion, qualifies for rebates |
| Hard well water, no softener | Tank, or tankless with a softener and annual descaling | Scale chokes a tankless heat exchanger; it is the number one failure |
| Big simultaneous demand, a hot tub, teenagers | Large tank, or two tankless units | One residential tankless cannot do three showers at 5-degree inlet |
| A house with a heat pump and solar | Heat pump water heater | It runs on the electricity you are already making |
A heat pump water heater pulls heat from the mechanical room air and cools and dehumidifies it, which is a benefit in a basement in summer and a small cost in heating in winter; give it a room with some volume. Cold-climate heat pumps covers the space-heating side of the same logic.
What goes wrong
- Scale: on hard water, descale yearly or add a softener; a neglected unit loses capacity and then fails.
- The cold-water sandwich: a burst of cold between hot draws; a small buffer tank or a recirculation setting fixes it.
- The gas line was never upsized, so the unit starves at full fire.
- Venting run too long or wrong material; condensing units need their own plastic vent and a condensate drain.
- The unit was sized from a summer brochure number; the first January is the complaint.
- Freeze: an exterior-mounted unit in Ontario needs its freeze protection powered and its lines protected; we keep them inside.
Cost in 2026
A condensing gas tankless installed in a new house runs $3,500 to $6,500 including venting and condensate, plus $500 to $1,500 if the gas line needs upsizing; a combi unit for radiant and domestic water $5,000 to $8,000; a heat pump water heater $3,000 to $5,000 installed; a power-vented gas tank $2,000 to $3,500. Service life: tankless 20 years with descaling; heat pump tank 12 to 15; standard tank 8 to 12. The home heating guide puts water heating next to the space heating choices it should be made with.
Related guides on this site
Sources and further reading
Questions people ask
Is a tankless water heater worth it in Ontario?
Where gas is available and you value endless hot water and wall-mounted space, yes: 20 to 30 percent less gas than a standard tank and a 20-year life, for $3,500 to $6,500 installed. Where there is no gas or energy use is the priority, a heat pump water heater uses far less energy and is the better buy.
What size tankless water heater do I need in Ontario?
Size for a 40-degree C rise, because winter inlet water is about 5 degrees. A family house needs the largest residential unit (about 200,000 BTU, roughly 15 to 20 litres per minute at that rise) or two units, and a gas line that can feed it.
Can a tankless heater run radiant floor heating?
A combi unit designed for it can, in a small tight house or cottage: one box for the floor loop and the domestic hot water. Size the heating side from a CSA F280 heat loss, and keep the domestic side separate from the glycol loop through a heat exchanger.
What maintenance does a tankless water heater need?
Annual descaling (flushing with a vinegar or citric solution), especially on hard water, cleaning the inlet filter, and checking the condensate drain and vent. Skip the descaling and the unit loses capacity and fails early.
NEW: Size a tankless for a January morning
A calculator that turns your incoming water temperature and the showers running at once into the flow and BTU/h you need, plus combi vs tankless and whether to rent or buy.
Tankless sizing calculator · Combi vs tankless · Rent or buy a water heater
Size it from a heat loss, not a guess
Every heating choice starts with the heat loss of your actual house. OntarioHeatLoss.ca produces the CSA F280 calculation and the mechanical design your permit needs, anywhere in Ontario.
Reviewed and updated October 2026. Costs are Ontario ranges, not quotes; code references are to the Ontario Building Code in force at that date.
It’s great to learn that tankless water heaters are known to be efficient. My wife and I are wanting to make our home more energy-efficient. I’ll tell her that we should get a tankless water heater for our home.
Tankless water heaters are the best source to save energy and get high benefits compared to tank water heaters. Tankless water heaters save energy, time, and space.
Absolutely! Since a water heater isnβt an everyday purchase, you likely not have put much research into how they work, what they do, what style to get, and how to maintain yours to extend its lifespan. Thank you so much for sharing this!
It discusses the benefits of tankless water heaters compared to traditional tank-based water heaters, such as energy efficiency, space-saving design, unlimited hot water supply, and longer lifespan. The article also explains how tankless water heaters work, the different types available (including electric and gas-powered models), and considerations for installation and maintenance. It aims to educate readers about the features and advantages of tankless water heaters and help them make informed decisions when considering this type of water heating system for their homes.