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Tankless Water Heater – What to Know Before You Buy
Oct
If you are looking for a new water heating tank, you might want to consider a tankless hot water heater. These on demand water heaters might be relatively new to Canada but they have been a vital appliance in many European and Asian homes for decades. Tankless water heaters are exactly what their name implies, a water heating system that does not use a tank to heat and store hot water.
How Does Tankless a Water Heater Work?
Unlike traditional hot water tanks, on demand hot water heaters have heating elements or heat exchangers that warm cold water as it passes through the lines. Because the water is heated as it is used, you have a continual flow of hot water. Unlike traditional water heaters, a tankless water heater does not use tanks to heat and store water. The water heaters can be electric or gas.
Tankless Water Heater Advantages and Disadvantages
A tankless water heater price is considerably more than traditional hot water tanks. On average, a tankless water heater can range in price between $1,000 to $2,500 plus installation costs. Whereas a traditional water heaters range in price between $800 to $1,500 plus installation. However, once installed, your energy-efficient, on demand hot water heater can last over 20 years with regular maintenance and use up to 70% less energy.
Tankless water heating systems take up less space in your home so you can enjoy extra storage and living space in your home. Because the water is heated as it is used, you can enjoy and endless supply of instant hot water whereas water tanks have to refill once emptied.
How to Select an On-Demand Water Heater
Hot water on demand tanks vary in size and price. One of the most important decisions you will need to make is how big of you will need for your home. The size of tank needed is calculated by measuring water flow in gallons per minute (GPM) and temperature rise, or how much the temperature must rise above the ground temperature to achieve the desired water temperature. At Northwind HVAC, we can help you choose the right tankless water heater for your home.
Depending on the type of heating system you have, you can choose between an electric water heater or a gas water heater. Electric hot water tanks are designed differently than the gas heaters and are more energy efficient. Gas tanks run on natural gas or propane hot water on demand.
Tankless Water Heater Installation and Maintenance
On average, it can cost anywhere between $1,000 to $4,500 to install a tankless hot water heater. Some things to consider when installing a tankless water heater are:
- Building size and location
- Type of fuel used
- Climate
- Building code requirements in your jurisdiction
- Safety
If you are installing a tankless water heater in your home, it is better to get a professional contractor who is experienced with plumbing and heating fixtures to install your system to make sure it is done properly. Once installed, tankless heaters require regular maintenance to keep your unit clean and working properly. Many parts can be replaced if they are malfunctioning, worn, or damaged.
Tankless Water Heater Features
Tankless water heaters run on electric or gas power. Electric water heaters have elements to heat the cold water as it passes through the pipes. Gas heaters like the propane tankless water heater uses heat exchangers and a pilot light to increase the water temperature.
Tankless water heaters do not have a tank to store water. Instead, they have electric heating panels
Tankless Water Heater vs Hot Water Tank
Hot water tanks store hot water in large tanks. Because water sits in the tank until used, energy is continuously used to warm the water. Once the tank is emptied, you must wait till it refills before using hot water.
Tankless water heaters warm water as it flows through the pipes so there is no water storage system. Electric on demand water heaters and propane tankless water heaters are wall mounted so they take up less space. On demand hot water heaters are more energy efficient because they only warm water when you turn on the hot water faucets. Hot water tanks are cheaper than tankless water tanks but they have a shorter lifespan.
Electric Tankless Water Heater vs Propane Tankless Water Heater
Electric hot water heaters use electricity to heat the water. They are more energy efficient and can warm water more quickly than propane hot water tanks. Gas water heaters use propane or natural gas and require a pilot light to heat the water so they are not as energy efficient. Gas water heaters require different safety precautions including installing a ventilation system for to avoid fire, combustion, toxic fumes, or injury.
Propane tankless water heaters cost more than electric hot water tanks but gas tanks have a better GPM.
FAQs
Can you run out of hot water with a tankless water heater?
No. Tankless water heaters do not warm a prefilled tank of water. The tankless system warms water as it is needed and passes through the pipes so only heat what you need, when you need it.
Are tankless water heaters worth the money?
Purchasing a tankless water heater can cost between $1,000 to $2,500. While the initial cost is higher, tankless hot water tanks last longer and use up to 70% less energy to heat water than standard water tanks. If you are looking for long term savings, a tankless water heater is worth the money.
How long do tankless water heaters last?
With regular maintenance and care, a on demand hot water heater can last 20 years or longer.
Do tankless water heaters increase home value?
To prolong the life of your tankless water heater, you should clean and inspect your appliance regularly. Water lines, heating elements, also called, heat exchangers, and other parts can become damaged or worn over time and need to be replaced.
At Northwinds HVAC, we have the knowledge and experience to for all your tankless hot water heater installation needs.
RELATED ARTICLE: HVAC Installation Cost 2020
✓ Expert Note — Our licensed Gas Technicians have installed and serviced hundreds of water heating systems across Ontario. The comparisons and cost figures below reflect current 2025 equipment pricing and Ontario contractor rates.
Frequently Asked Questions About Water Heaters in Ontario
How much does a tankless water heater cost in Ontario in 2025?
Tankless water heater installation in Ontario typically costs $2,500–$4,500 for a natural gas unit, installed. The unit itself costs $900–$2,200 depending on capacity (flow rate in GPM) and brand. Installation includes gas line work, venting, and water connections. Condensing tankless units (high-efficiency, 95%+ EF) cost more upfront but save $150–$300 annually compared to a standard storage tank. Navien, Rinnai, and Noritz are the most common brands we install.
How long does a tankless water heater last?
A well-maintained tankless water heater lasts 20–25 years – roughly twice as long as a traditional tank heater (8–12 years). Annual descaling (flushing with white vinegar or a descaling solution) is essential in Ontario, where hard water is common. Most manufacturers offer 10–15 year warranties on the heat exchanger when the unit is installed by a licensed technician and maintained according to schedule.
What size tankless water heater do I need for a typical Ontario home?
Sizing is based on peak flow demand (gallons per minute) and temperature rise needed. In Ontario, cold water entering the heater is typically 5–10°C. To raise it to 49°C (120°F), you need about a 39°C temperature rise. A family of 4 with 2 bathrooms typically needs a 9–10 GPM unit. Homes with multiple simultaneous hot water demands (shower + dishwasher + laundry) should size up. Our technicians do a proper sizing calculation before recommending a unit.
Is a tankless water heater better than a hot water tank?
Tankless units offer endless hot water, use 20–30% less energy, and last twice as long. They’re better for most households. However, tankless requires a higher gas flow rate (often 150,000–200,000 BTU/hr) – some homes need gas line upgrades to support this. They also have higher upfront costs and can’t supply large simultaneous demands without proper sizing. A storage tank is simpler and cheaper upfront but less efficient and has a shorter lifespan.
How often should I flush my hot water tank?
Ontario’s water is moderately hard in most regions, causing mineral buildup (scale) on heating elements and the tank bottom. Flush your hot water tank once per year by connecting a hose to the drain valve and letting it run until the water runs clear. This removes sediment that reduces efficiency and shortens tank life. For tankless units, a full descaling flush is recommended every 1–2 years depending on local water hardness.
What are signs my water heater needs to be replaced?
Key warning signs: the unit is over 10–12 years old (tank) or 20+ years (tankless), you notice rust-coloured water from hot taps, the tank is making popping or rumbling noises (sediment), the pilot light keeps going out, water is not getting as hot as it used to, or you notice water pooling around the base of the tank. A leaking tank cannot be repaired – it needs immediate replacement to prevent water damage.
Are there rebates for water heater installation in Ontario?
Enbridge Gas offers rebates for high-efficiency water heaters, including tankless condensing units (typically $150–$250). The Canada Greener Homes Grant includes water heating upgrades but requires an EnerGuide audit. Some municipalities and local utilities have their own programs. Always ask about current offers at the time of purchase – rebate programs change frequently and our team stays up to date.
Written by
David Tremblay
Heating & Ventilation Specialist | G2 Gas Technician (TSSA)
David Tremblay is a licensed heating and ventilation specialist with 12 years of field experience across Barrie, Collingwood, Muskoka, and surrounding Simcoe County communities. Holding a G2 Gas Technician licence from the TSSA and certification in commercial refrigeration, David focuses on water heating systems, indoor air quality, humidification, and whole-home ventilation. He is well-versed in Ontario Building Code requirements and helps homeowners understand seasonal HVAC maintenance and system optimization.
