Tankless Water Heater Electrical Requirements: What Every Homeowner Should Know

With the appeal of endless hot water, lower utility bills, and a space-saving design, on-demand tankless water heaters seem like an easy upgrade. But here’s what most people don’t hear upfront: your home’s electrical system MIGHT NOT BE up to the task.

Going tankless isn’t just about choosing a good brand—it’s about whether your panel can handle the load. These units often need significant amperage, higher voltage, and a solid panel capacity. It’s not complicated, but it’s critical to get it right.

In this guide, I’ll break down exactly what kind of ELECTRICAL SETUP you need for your electric or gas (propane) tankless water heater. Let’s begin!

What Your Tankless Water Heater Really Needs To Run Right

One of the biggest mistakes I see folks make is assuming that going tank-free is just a matter of swapping out the unit. NOT QUITE. Whether you’re installing a gas or electric tankless water heater, the electrical requirements matter—and they can be a dealbreaker if your setup isn’t ready. Let’s break it down.

First, yes—even GAS TANKLESS HEATERS still need electricity. That trips a lot of people up. The propane gas heats the water, sure, but electricity powers the control board, thermostat, sensors, and the ignition system. It’s the brain of the unit, and without that, nothing’s firing up.

Voltage: 120V Vs. 240V — What You Need To Know

Let’s talk voltage first.

For gas tankless water heaters, the demand is pretty light. Most run on 120 volts AC, which is standard in just about every home in the U.S. That voltage doesn’t heat your water—it just runs the electronics. Simple stuff.

You might run into some “electric-ready” gas models designed to convert to 240V, but unless you’re modifying your system or planning ahead for flexibility, that’s not something most folks need to worry about.

Now with electric tankless heaters, voltage is a whole different animal. These units need real muscle to heat water on demand. Most full-size electric tank-free models require 240 volts, and if you’re looking at a point-of-use unit (for a sink or a small bathroom), some of those can run on 120V—but they’re limited in output.

BOTTOM LINE: 240V is standard for electric whole-house models in many countries, and you’ll want a dedicated circuit to keep everything running smoothly and safely.

Amperage: Can Your Electrical Panel Keep Up?

Here’s where a lot of homeowners hit a wall.

Gas tankless heaters don’t draw much amperage, because again, they’re not using electricity to heat water. You’re typically looking at 1 to 5 amps, even on units with added features like a recirculation pump or an electronic vent fan. Not a big deal.

But electric tankless water heaters? That’s a different story. These units pull between 40 and 170 amps, depending on their size and how much hot water they’re cranking out. A larger unit on a 240V line might draw 130 to 150 amps, easily. Smaller models can run in the 50-amp range, but that’s still a serious load.

And here’s the part most people miss: many U.S. homes have just a 100-amp service panel. That’s not going to cut it if you want a whole-house electric tankless system. You’ll likely need to upgrade to a 200-amp panel, or even higher if you’ve already got a heavy electrical load from other appliances.

Always—and I mean always—check your panel before you buy the unit to ensure its longevity.

Wattage Requirements

Wattage is just volts times amps, so it makes sense that gas models are on the low end and electric units demand a lot more.

GAS tankless water heaters usually draw 100 to 200 watts during regular operation, with a quick spike up to 400 watts during startup. That’s easy to handle, and most homes already have what’s needed to support that—just make sure the circuit is clean and dedicated.

With ELECTRIC tankless systems, wattage scales with performance. The more hot water you want at once, the more wattage you’re going to need. Here’s a ballpark breakdown:

• Small whole-house unit: 12.2 kW
• Mid-range model: 24 kW
• Large high-demand unit: 36 kW
• Point-of-use models: 3–12 kW

So yeah—36,000 watts is no joke. You’ll need the proper wiring, breakers, and panel capacity to back that up. And again, this is why I always push people to check manufacturer specs first and talk to an electrician before pulling the trigger.

Circuit Breaker Size: Don’t Skip This Step

The circuit breaker might not be the first thing people think about when installing an on-demand tankless water heater, but it’s one of the most important parts of the setup. Whether you’re going with a gas or electric unit, the breaker is your first line of defense against electrical overloads, shorts, and potential fire hazards.

Now, I know this part trips up a lot of folks. Breaker sizing sounds technical, but it’s actually pretty simple once you know what to look for.

How to Calculate Breaker Size (The Right Way)

Here’s how I break it down for homeowners:

• Step one: Find out the amperage rating of your tankless water heater. You’ll find that in the spec sheet or user manual.
• Step two: multiply that amperage by 1.25. That’s based on the National Electrical Code (NEC) requirement for continuous loads—basically a built-in safety margin.

Let’s say your tankless unit is rated for 40 amps:

Breaker size = 40 amps × 1.25 = 50 amps

Now here’s an interesting thing—don’t install a breaker that’s rated for the exact calculated value. That might seem like the right move, but it doesn’t leave you any breathing room if there’s a surge or spike. So instead of locking in a 50-amp breaker, I’d go with the next standard size up—like 60 amps—or use dual 50-amp breakers (double-pole), depending on your panel and wiring.

In general, standard breaker sizes for electric tankless heaters range from 40 to 70 amps, but that depends on the model and how many heating elements it has.

Gas Vs. Electric: What’s The Difference?

If you’re running a gas-powered heater, the breaker size is usually small because the electricity is just powering the electronics, not the heating. You’ll probably only need a 15-amp or 20-amp breaker for most gas models.

But if you’re installing an electric tankless heater, especially a whole-house system, you’re going to need a much bigger breaker—and sometimes multiple breakers, if the unit has more than one internal heating element. In that case, each element needs its own circuit and breaker, and the loads should be calculated individually, then totaled to make sure your panel can handle it.

My Take

If you want the most accurate breaker sizing, your best bet is to check the manufacturer’s specs in the user manual. But let me be real with you—even if you’re comfortable doing the math, I always recommend bringing in a LICENSED ELECTRICIAN to confirm the numbers and inspect your panel. It’s not just about making things work—it’s about making them safe.

Wiring And Panel Capacity

Let’s talk wiring—because when it comes to tankless water heaters, especially the electric ones, this is where a lot of homeowners underestimate what’s involved.

Most tankless units in the U.S. are hardwired, not plug-and-play. The only exception is very small point-of-use models, which sometimes come with a regular plug. But if you’re running anything larger—or if you’re going whole-house—you’re going to need a dedicated power circuit. No sharing with other appliances, period. That’s the only way to avoid overloading and nuisance tripping.

For Gas Tankless Heaters

Even though gas geysers are powered primarily by natural gas or propane, they still need a bit of electricity to run their controls—think ignition, sensors, circuit board, or even a recirculation pump if your unit has one.

The good news is that the electrical demand is pretty LOW. In most cases, you can get away with 14 or 10 AWG copper wire, depending on the amperage and model specs. If it’s a plug-in model, a grounded, 3-prong outlet is the standard.

And here’s a bonus—you probably won’t need to upgrade your electrical panel. Most homes with a 100-amp service panel can handle a gas tankless heater just fine.

For Electric Tankless Heaters

Now here’s where things scale up fast.

Electric tankless units pull a lot more energy, especially whole-house systems (calculate yours here). Your wiring has to match that demand—not just the amps, but the breaker size and wire gauge too. For example:

• A smaller 3.5 kW unit at 240V, pulling 29 amps, can use a single 10 AWG wire.
• A mid-size or large 24 kW unit at 240V, drawing close to 100 amps, might need three separate 8 AWG copper wires, one for each circuit.

That’s not light-duty wiring. You’re also going to need a 200-amp main panel, plus room for multiple double-pole breakers. If your home is still running on a 100-amp panel, you’ll need to upgrade. No way around it.

My Advice

Always follow the manufacturer’s wiring recommendations—they’ll give you the exact breaker size, wire gauge, and circuit count you need. And while I’m a big fan of DIY for certain things, this is one area where I strongly suggest hiring a licensed electrician.

Not only are they going to make sure everything is sized and grounded correctly, but they’ll also know your local code requirements, which can differ from county to county. And trust me—code compliance matters, especially if you ever plan to sell your house or need insurance claims to go smoothly.

Read Full Comparison: Electric Vs Gas Tankless Water Heater

NEC Guidelines (National Electrical Code) For Tankless Water Heaters

The National Electrical Code (NEC) provides specific guidelines for the safe installation and wiring of tankless water heaters for our homes, whether powered by electricity or gas, and comprises electrical components.

Here I am quickly mentioning some of the most relevant NEC regulations for our tank-free heater electrical requirements:

• Appropriately sized branch-circuit overload protection is required to match the rated load of the tankless heater. Additionally, we need to have a means of disconnect, like a circuit breaker or a local disconnect switch, for appliances rated over 300VA, which includes most instantaneous water geysers. (Article 422)
• Electric on-demand heaters are considered continuous loads, so the circuit must be sized correctly to handle 125% of this load. Along with that, circuit breakers must also be sized to withstand 125% of the continuous load. (Article 210)
• Circuit breakers must match the wire gauge and ampacity (maximum current-carrying capacity of a conductor within safety limits), and multiple heating elements will require multiple circuit breakers in certain cases. (Article 240)
• Unless otherwise specified, we must always use COPPER WIRES. (Article 310)
• The main service panel board must be rated 200 amperes for whole-house electric tankless models. (Article 408)
• While a dedicated circuit is recommended for gas models, it is MANDATORY for electric tankless water heaters.
• In specific cases, GFCI/AFCI breaker protection might be required if the tank-free heater is not hardwired.

These are some of the most vital NEC guidelines that directly relate to the electrical requirements of tank-free heaters. However, I would also highly recommend you check with your local building department for any additional guidelines or amendments to the NEC.

Common Mistakes (And How to Avoid Them)

Let me be straight with you—the electrical side of installing a tankless water heater isn’t something you want to wing. Over the years, I’ve seen folks (including some rookie installers) make simple errors that end up costing them big time. We’re talking about things like poor performance, tripped breakers, and even full-on electrical hazards.

So, whether you’re tackling this as a DIY project or just want to keep your electrician in check, here are the most common mistakes I’ve seen—and how you can avoid them:

1. Undersized Wire Gauge

This one’s a classic. People try to save a few bucks by using thinner wires—and end up overheating their instant water heater or frying their breaker. Worse, in extreme cases, it can lead to fire hazards. That’s why the wire size needs to match the unit’s amperage and breaker rating.

RULE OF THUMB: For larger electric tankless heaters, you’re looking at 6, 8, or even 4 AWG copper wire, depending on the model. Always size according to NEC guidelines and double-check the manufacturer’s specs.

2. Overly Long Wire Runs

The longer your copper wire, the more resistance it builds up, and that causes a voltage drop. If your on-demand heater is supposed to run at 240V but only gets 220V, you’re going to get lukewarm showers and angry houseguests.

To fix this:

• Keep the water heater close to your main panel if possible.
• Or use thicker gauge wire to compensate for the distance.

3. Sharing a Circuit With Other Appliances

Never—and I mean never—put your tankless unit on a shared circuit breaker. These instantaneous heaters draw serious current. Plugging one into a line that also powers your dishwasher, microwave, or anything else is a recipe for blown breakers, power dips, and potential wire damage inside your walls.

Solution? DEDICATED CIRCUIT. Always. And if your main panel is full, install a subpanel. It’s a small upgrade that’ll save you from big problems down the line.

4. Improper or Missing Grounding

You’d be surprised how many DIY installs skip this—or worse, ground it incorrectly. A tankless water heater that isn’t grounded properly is a serious shock risk.

Follow the NEC:

• Use at least 8 AWG copper for a system pulling 100 amps.
• Always connect the ground securely to the panel and bonding system.
• And when in doubt, call in a licensed electrician. This is not the area to cut corners.

5. No Local Disconnect Switch

This one gets overlooked constantly. If your on-demand water heater is tucked away in a garage, basement, or far from your electrical panel, you’re legally required (and practically smart) to install a local disconnect switch.

Why? Because if there’s a fault, or you need to do maintenance, you don’t want to sprint to the breaker panel. NEC says the disconnect must be within line of sight of the unit, and I agree 100%. It’s cheap, easy, and a huge safety benefit.

Final Tip from Me

Just because the unit looks small and sleek doesn’t mean it’s low-power. Tankless heaters are heavy-duty devices, especially on the electric side. One small wiring mistake now can lead to expensive damage later.

Read the manual, size everything properly, and don’t guess. And if anything seems unclear, get a licensed electrician involved—one who knows local code.

Electrical Installation: DIY vs. Professional

I totally get that the DIY route can be appealing, especially when you’re thinking about saving a bit of cash. But if you’re not absolutely sure about your abilities or experience with this kind of work, I can’t stress this enough—don’t risk it.

Installing the electrical setup for a tankless water heater isn’t something I’d recommend for most DIYers, even if you have some experience with electrical work.

I’ve done a lot of wiring in my day, but when I was installing it at my own home, I quickly realized the complexity involved—high-voltage wiring, circuit breaker setup, panel upgrades, and code compliance. It hit me that there was little margin for error, and the risks involved were simply too high. One wrong move could lead to fire hazards or worse, serious injury.

That’s why, even though I’ve got the knowledge, I turned to our own licensed electrician on the team. It was peace of mind well worth the extra investment. The job got done faster, and I passed code inspections for my instant water heater with no issues, and I haven’t had to worry about it since.