Condensing vs Non-Condensing Tankless Water Heaters

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Tankless water heaters are becoming more and more popular in the United States each year. Many people are choosing them over traditional tank-style water heaters because they take up less space, last longer, and save energy.

Tankless water heaters have become especially popular for homeowners in the Pacific Northwest that want to save on the high cost of propane or heating oil bills. They are considered “high efficiency” water heaters because they only heat the water as it passes through the unit, unlike a tank-style heater which heats up an entire tank of water.

Another advantage of tankless water heaters is that they are much more environmentally friendly because they don’t rely on fossil fuels to heat the water. They use electricity or natural gas which are both much cleaner energy sources.

Tankless water heaters can greatly reduce the amount of wasted water and wasted heating energy because they only heat the water as needed. Traditional tank-style models constantly heat the entire volume of water whether you need it or not.

The downside of a tankless system is that while they are “on-demand,” meaning that they turn on and off as needed, you will need to have enough water flow to activate the unit. This is because the tankless water heater has no “reserve” of hot water. On the positive side, tankless units allow you to precisely control the temperature of the water, and since they only heat the water as needed, they will cycle on and off infrequently.

There are two main types of tankless water heaters: condensing and non-condensing. So which one is right for you? Let’s take a closer look!

Condensing tankless water heater:

A condensing tankless water heater is the most efficient type of tankless unit. It has a heat exchanger just like a regular water heater, but the burner is external to the unit. This allows for better airflow. The burner pulls in fresh air just like an actual furnace, which produces flue gas that must be routed outside of the home through separate piping.

Condensing water heaters recover more latent energy than non-condensing tankless units. This means they recover more heat from the flue gases, which is the heat that would normally be exhausted to the outdoors.

The waste heat recovery makes it possible for condensing tankless water heaters to achieve higher efficiency ratings than non-condensing models. Some condensing units are rated at over 90% efficiency!

A condensing tankless water heater will also last longer than a non-condensing unit. This is because the heat exchanger and burner are one and the same, and since there is no exhaust (flue) piping, it doesn’t have to endure as much stress from being subjected to high temperatures.

Furthermore, a condensing tankless water heater is a sealed combustion system, which means it doesn’t emit any carbon monoxide into the home and is, therefore, a much safer unit to have inside your home.

However, condensing tankless water heaters can be more expensive than non-condensing models because of the greater efficiency and sealed combustion system. In addition, they require separate venting from the appliance which is not required for a standard tank-style heater. The venting route can be costly and difficult to install.

Non-condensing tankless water heater:

A non-condensing unit saves on energy because it doesn’t need the extra energy to recover heat, but it does need some additional insulation (the exhaust (flue) piping) to protect against cold temperatures. However, this type of heater is generally cheaper than a condensing unit.

A non-condensing tankless water heater also tends to last longer because it doesn’t need the extra energy to extract heat from the flue gases like its condensing counterpart. Just like traditional tank-style water heaters, this appliance will cycle on and off as hot water is needed.

This is probably more desirable than a condensing model because it saves on energy and doesn’t require as much installation as the other type.

A non-condensing unit will not expel carbon monoxide, but it can emit water vapor. This means that any windows in the home where the venting is routed should be double-paned for optimum efficiency. However, condensation can build up on surrounding surfaces if they are not airtight, so you’ll want to keep this in mind when installing a non-condensing unit.

Furthermore, a non-condensing unit does require an air intake. This means the air being drawn in by the unit could be polluted if it’s located outside, so make sure you consult with your installer to determine where the best place should be for the intake vent.



Tankless water heaters offer many benefits to homeowners. One of the most significant is their ability to save energy and money on your monthly bills, but there are a few differences between condensing and non-condensing tankless water heater models that may make one more desirable than another for some families.

We hope you’ve enjoyed learning about the difference between condensing and non-condensing tankless water heaters. If you have any questions or want to learn more, please leave us a comment. We would love to hear from you!

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