How to Install a Tankless Water Heater

Why this matters

Tankless water heater installs are a premium-margin plumbing service: typical project, 4-8 hours labor. Customer gets endless hot water, smaller footprint, longer equipment life (20+ years vs 10-12 for tank). Done wrong (undersized gas line, wrong venting, no condensate drain), tankless underperforms + frustrates customers. This is the working procedure.

When tankless wins

Strong candidates:

• Family with high hot-water demand (4+ bath, large laundry, frequent guests)
• Existing tank failing replacement (cost differential smaller)
• Small mechanical room (tankless is wall-mounted, frees floor space)
• High utility costs (energy savings 20-40% over tank gas)
• Owner staying long-term (20+ year ROI)
• Owner replacing functional tank (often not worth swapping early)

Weak candidates:

• Light hot water demand (single occupancy, small home)
• Cold incoming water (Northeast winter; needs larger unit)
• Old gas service that can't be upsized
• Hard water (scale builds on heat exchanger; descale required annually)

Sizing

A tankless is rated as a flow rate AT a temperature rise, never as a bare gpm. The relationship:

BTU/hr delivered = gpm x 500 x temperature rise (F)
gpm = BTU/hr delivered / (500 x rise)

Work it for a 199,000 BTU/hr input unit at roughly 0.82 thermal efficiency, so about 163,000 BTU/hr delivered, set to 120°F:

• 70°F incoming, rise 50°F: 163,000 / (500 x 50) = 6.5 gpm
• 50°F incoming, rise 70°F: 163,000 / (500 x 70) = 4.7 gpm
• 40°F incoming, rise 80°F: 163,000 / (500 x 80) = 4.1 gpm

Same unit, same setpoint, and the winter number is a third lower. The fixture demand does not shrink in January. That is why cold incoming water needs a BIGGER unit, not a smaller flow target: size to the coldest incoming water of the year, not the annual average. Pull the manufacturer's flow-vs-rise curve for the specific model and read your gpm off the rise you actually have.

Translation to fixtures:

• Shower: 1.5-2.5 gpm
• Dishwasher: 1.5-2 gpm
• Washing machine: 1.5-2 gpm
• Kitchen sink: 1.5-2 gpm

If customer wants 2 showers simultaneously + dishwasher: 5-6 gpm. Pick a tankless rated for that flow at customer's incoming temp.

Most popular sizes:

• 6-7 gpm: unit (Rinnai RU130, Navien NPE-240, A.O. Smith ATI-340)
• 7-9 gpm: unit (Rinnai RU180, Navien NPE-A2 240)
• 9-11 gpm: unit (Rinnai RU199, premium series)

Gas line sizing

Tankless units consume more BTU than tank water heaters:

• Tank: 30,000-40,000 BTU
• Tankless: 150,000-200,000 BTU (5x higher peak demand)

Most homes need a gas line upgrade for tankless. Size off the NFPA 54 Chapter 6 capacity tables (schedule 40 metallic, natural gas, 0.5 in w.c. drop, 0.60 specific gravity), reading the longest run from the meter to the appliance, not the length of the branch. At 1,000 BTU per cubic foot, a 150,000 BTU unit is 150 CFH and a 199,000 BTU unit is 199 CFH.

• 1/2 inch tops out around 131 CFH at 10 ft and falls to 55 CFH at 50 ft. It does not carry a 150,000 BTU tankless at any length. Do not reuse the existing 1/2 inch tank line
• 3/4 inch carries 273 CFH at 10 ft, 151 at 30 ft, 114 at 50 ft. Good for 150 CFH out to about 30 ft, or for 199 CFH only on a very short run
• 1 inch carries 514 CFH at 10 ft, 243 at 40 ft, 148 at 100 ft. That is the usual answer for a 199,000 BTU unit on a typical house run

Add the other appliances on the same segment before you pick a size, and verify against the table in the adopted edition.

If existing line undersized: re-pipe OR install dedicated line for tankless. add to project.

Venting

Two types of tankless:

Non-condensing:

• Combustion gases ~300°F
• Stainless steel Category III vent (positive pressure)
• More expensive vent + harder to install
• Less common now

Condensing (modern standard):

• Combustion gases ~120°F
• PVC vent (Schedule 40)
• Cheaper + easier vent
• Slightly higher efficiency
• Produces condensate (drain needed)

For most installs: condensing. PVC venting through wall or roof, 2-3" diameter typical, max length per manufacturer.

Electrical

• 120V dedicated 15A circuit for controls + igniter
• Some premium units 240V (verify)
• Disconnecting means within sight of the unit per NEC Article 422 and the install manual (an outdoor unit gets a weatherproof one; an indoor unit does not need the disconnect outdoors)

Materials + tools

• Tankless heater unit
• Mounting bracket + lag screws (or plywood backer)
• Black iron pipe + fittings for gas (or CSST flex if certified)
• Pipe dope (gas-rated)
• 3/4" copper or PEX for water supply + outlet
• PVC for vent (Sch 40, primer + cement)
• Condensate drain line (PVC or 1/2" PE)
• 240V or 120V cable + disconnect
• Wall plate / penetration sleeve
• Standard plumbing + HVAC tools
• Pressure test gauge for gas
• Combustion analyzer for commissioning

Procedure

Step 1: Site survey + plan

1. Locate mounting position (interior wall, mechanical room, garage)
2. Verify clearances: 12-24" front, 6-12" sides, 12+" top
3. Plan gas line route
4. Plan vent route (through-wall or through-roof)
5. Verify electrical access
6. Verify condensate drain path
7. Discuss with customer; photograph
8. Pull permit

Step 2: Remove old water heater (if applicable)

1. Shut gas + water at supplies
2. Drain old tank to laundry tub or floor drain
3. Disconnect water + gas
4. Cap old gas line (or repurpose)
5. Disconnect electric (if electric tank) or vent
6. Remove old tank

Step 3: Mount tankless

1. Mount bracket level on wall (stud or plywood backer)
2. Verify clearances + access
3. Hang unit on bracket
4. Some units have specific weight rating; verify

Step 4: Plumbing connections

1. Cold supply: 3/4" copper or PEX with shutoff
2. Hot output: 3/4" copper or PEX
3. Service valves (isolation valves at unit are highly recommended; manufacturer often supplies)
4. Recirculation loop if applicable
5. Pressure relief valve + discharge pipe (typically to floor)
6. Mixing valve at outlet if scalding protection required

Step 5: Gas connection

1. Run gas line if needed (size per NFPA 54)
2. Shutoff valve within 6 ft of unit
3. Sediment trap (drip leg)
4. Union for service
5. Flexible appliance connector to unit (or hard-pipe)
6. Pressure-test new gas piping per code
7. Soap-test connections

Step 6: Vent + intake

For condensing (typical):

1. PVC vent from unit, slight upward slope
2. Through wall or roof per manufacturer
3. Intake air pipe also (concentric vent: pipe-in-pipe; or separate intake)
4. Termination clearances (10+ ft from windows, doors, intakes)
5. Bird screen at exit

Step 7: Electrical

1. 120V or 240V cable from disconnect to unit
2. Verify breaker matches
3. Ground per NEC

Step 8: Condensate drain

1. Connect drain from unit to floor drain, condensate pump, or laundry tub
2. Acid-neutralizer cartridge inline (condensate pH 2.5-3.5; neutralizer raises to safe levels)
3. Verify slope + no traps

Step 9: Commission

1. Open water supply; bleed air from system
2. Open gas supply
3. Power up
4. Verify ignition
5. Test hot water at fixture; verify flow + temperature
6. Combustion analysis: CO2 7-9%, CO < 100 ppm
7. Verify recirculation (if applicable)
8. Test temperature setpoint

Step 10: Customer briefing + paperwork

1. Operating temperature setting
2. Annual descaling recommendation
3. Filter cleaning (water inlet screen)
4. Error code basics + Wi-Fi setup
5. Manuall service contract offer
6. Warranty registration
7. Photos + permits documentation

Acceptance criteria

• Hot water at all fixtures (flow + temperature)
• Gas pressure test passed
• Combustion within spec
• No leaks (gas, water, condensate)
• Customer signed + briefed
• Permit closed

Common pitfalls

• Undersized gas line: appliance starves at peak demand
• Wrong vent material: B-vent on condensing unit fails (corrosion)
• No condensate drain: water on the floor + acid damage
• No service valves: future servicing requires draining whole loop
• No customer education: customer doesn't descale; warranty void
• Skipping permit: AHJ + insurance issue
• Recirculation oversized: water heater short-cycles + fails early
• Hard water without softener: scale buildup; failure in 3-7 years

IRA + utility incentives

Incentives are paperwork, not sales magic. Handle them well and you close jobs the competitor loses; handle them casually and you own a denied rebate the customer expected you to deliver.

Federal side. The energy efficient home improvement credit reaches qualifying high-efficiency water heating equipment, which for tankless means the gas units that hit the listed efficiency tier, not every unit on the truck. Verify the specific model appears on the current qualified product listing before you promise anything. The credit is claimed by the homeowner on their return, it is a percentage of qualified cost against an annual cap, and it resets each tax year, so a customer stacking several upgrades may be better off splitting them across two years. Say that as information, then send them to their tax preparer. You are a plumber, not a tax advisor, and that sentence belongs in your proposal.

What you owe the customer at handoff:

• Itemized invoice separating equipment from labor, with the exact model number as it appears on the qualified list
• The manufacturer certification statement for that model
• Efficiency rating documentation
• Install date and address
• Permit number and final inspection record

Utility side. This is where jobs get lost. Most gas and electric utility programs require the model to be on their own qualified list, and many require pre-approval before the old unit comes out. Apply after the fact on a program that wanted pre-approval and the answer is no, with nothing you can do about it. Some programs also require the installing contractor to be on an approved list, which is a one-time signup worth doing before you need it. Ask three questions at the quote: pre-approval required, contractor list required, is this model listed.

Two rules that keep you out of trouble. Never quote net of incentives, quote the job and show the incentive as a separate line the customer may or may not receive. And re-verify program terms at every quote, because these programs change funding and eligibility mid-year and last quarter's answer is not evidence.

References

• NFPA 54 / ANSI Z223.1 National Fuel Gas Code
• ASME water heater + storage tank standards
• ENERGY STAR Water Heater Product List
• Manufacturer install manuals (Rinnai, Navien, A.O. Smith, Bosch, Bradford White)
• Manuall internal: Annual Tankless Water Heater Service, Heat Pump Water Heater Reference