How To Install A Tankless Water Heater? A Guide for Gas and Electric Models

Installing a tankless water heater might seem straightforward—just mount it on the wall, hook up a few pipes, and you’re done, right? Not quite. While these modern, energy-efficient systems are a fantastic upgrade from traditional water tanks, their INSTALLATION is anything but a simple plug-and-play process.

To ensure optimal performance, safety, and efficiency, you need to consider key factors like electrical intricacies, placement, gas line capacity, venting requirements, water pressure, and even local building codes. Plus, the installation process differs depending on whether you’re setting up an electric or gas geyser.

In this guide, I’ll walk you through the STEP-BY-STEP installation process for both electric and gas tankless water heaters—so you can set up your system correctly and enjoy endless hot water without costly mistakes.

I have created the above infographic outlining all the essential steps for installation of gas and electric tankless water heaters. But before we proceed into details, there are several critical checks to ensure COMPATIBILITY and prevent FUNCTIONALITY issues.

Pre-Installation Requirements (ESSENTIAL)

I’m assuming you’ve already chosen an on-demand heater that matches your household’s hot water needs. With that in mind, let’s cover the essential prerequisites:

A. Checking Electrical Compatibility

Even gas-powered tank-free water geysers require electricity to power their microprocessor and digital controls. That means you’ll need a 120 V power source nearby.

Additionally, whether you’re installing an electric or gas-powered heater, your home’s electrical demand may increase. It’s a good idea to have an electrician assess the current LOAD CAPACITY and determine whether an upgrade is needed before installation. I have written a detailed article about electrical requirements, where you can find detailed information about voltage, amperage, wattage, panel capacity, and more!

B. Checking Gas Supply (For Gas Heaters)

If you’re installing a gas tankless heater, your existing gas line might not be sufficient. Many homes have a standard ½-inch gas line, but most heater models require a ¾-inch line to deliver enough fuel for proper operation. Before installation, consult a licensed plumber to evaluate and upgrade your gas supply if necessary.

C. Choosing A Suitable Installation Location

Instantaneous water heaters are compact and can be installed almost anywhere, including outdoors. However, placement depends on ventilation requirements and local code restrictions. Some homeowners prefer installing them in a closet, but the model type matters:

• Direct-vent models work well in tight indoor spaces.
• Power-vent models require additional clearance for proper airflow.

For homes with limited indoor space, I often recommend an outdoor installation—it frees up space and simplifies venting.

D. Preparing The Installation Space

Once you’ve chosen the location, ensure the area is clean, dry, and structurally capable of supporting its weight. Also, make sure:

• There’s enough CLEARANCE for easy access and maintenance (a cramped space can lead to costly servicing issues).
• Power connections, gas lines, and venting are easily ACCESSIBLE for both installation and future repairs.

E. Checking Ventilation Requirements

Proper venting is crucial for safe operation, especially for gas units. Unlike traditional water heaters, tankless models require gas-tight, corrosion-resistant Category III stainless steel or PVC vents to prevent carbon monoxide leaks. However, if you’re installing a condensing tank-free heater, you can use PVC or polypropylene since their exhaust gases are cooler.

F. Securing Permits and Approvals

If you hire a professional, they’ll ensure compliance with local building codes and regulations. But if you’re doing it yourself, check whether a permit is required in your area. This typically involves submitting an application, paying a fee, and possibly having an inspection.

Once these essential prerequisites are addressed, we can move on to the step-by-step installation process to get your heater up and running efficiently.

How To Install A Tankless Water Heater? Here’s A Step-by-Step Guide

If you want to maximize the benefits of going TANK-FREE and extend its longevity, I highly recommend seeking professional assistance to install your on-demand water geyser. However, if you are determined to do it yourself, I am detailing the steps below (separately for electric and gas tankless water heaters) for your reference.

Please note that I am assuming you have already taken down your previous water heating unit. So, now, let us proceed with the installation of our new heater.

Installing An Electric Tankless Water Heater

1. Turn Off Power & Water—No Exceptions

Electric water heaters use high voltage, and even a SMALL MISTAKE can lead to a blown circuit, damage, or a nasty electric shock. Start by shutting off the power at the circuit breaker and labeling it to prevent accidental reactivation. Never assume the power is off—always confirm with a voltage tester.

Next, TURN OFF THE WATER SUPPLY to prevent leaks or flooding during installation. If you’re replacing an old appliance, be sure to drain the water lines first to avoid unnecessary mess and water damage. Prioritizing these steps ensures a safer and smoother installation.

I can’t tell you how many times I’ve arrived at a job where someone forgot this step, and they were left with a flooded room or a shock. Even expert DIYers make this mistake— so, never assume power is off, always test.

2. Choose The Right Mounting Location (Not Just Anywhere Will Work)

Mounting your electric tankless water heater in the RIGHT location improves efficiency, longevity, and ease of cleaning. A poor placement can lead to longer wait times for hot water, difficult servicing, and even early failure.

For the best results, install the geyser close to major hot water fixtures like the kitchen and showers to reduce delays. If possible, choose an exterior wall to help with heat dissipation. Ensure at least 12–24 inches of clearance on all sides to allow proper airflow and easy access for upkeeping.

Avoid high-humidity areas like laundry rooms, as excess moisture can corrode the unit’s electronics. Also, never mount it directly onto drywall—secure it to wall studs or a plywood backer board for stability. Finally, use the provided screws and anchors to keep the heater firmly in place for a SAFE and DURABLE installation.

Before mounting the electric heater, remove the front cover by unscrewing any fasteners securing it. Some models require disconnecting the digital display (UI) before removing the panel—check the manual to avoid damaging internal wiring.

I’ve seen people mount these under sinks, in tight cabinets, or in unheated garages. That’s a recipe for disaster. Always think ahead about maintenance and performance.

3. Connect The Water Lines

Proper plumbing ensures the correct flow rate, maintains water pressure, and extends the lifespan of your water heater. For the best performance, use ¾” copper or stainless steel flex pipes, which provide durability and reliable flow. Install shutoff valves on both the hot and cold lines to make future maintenance (cleaning, flushing, descaling) easier.

To PREVENT LEAKS, wrap all threaded fittings with Teflon tape and pipe dope before tightening. Avoid using PEX near the geyser, as high temperatures can degrade it over time. The cold water inlet is usually on the right, but designs vary, so always check the user manual before connecting.

If your home’s water pressure exceeds 80 psi, install a pressure-reducing valve on the cold inlet to prevent damage. Some regions require temperature and pressure relief valves based on local codes, so check regulations in your area. If not required, consider adding a thermostatic valve for better temperature control and safety.

I’ve seen people rush this part, skip the shutoff valves, and then call me later when their water heater needed a simple fix but had to shut off water to the whole house. Spend the extra $10 on shutoff valves—future-you will thank you.

5. Purge the System (Before You Fry the Heating Elements)

Trapped air can burn out the heating elements instantly, making it the leading cause of premature failure. To prevent this, turn on the cold water supply before powering up the electric heater.

Next, open multiple hot water taps throughout your home to force out any trapped air. Let the water run for 2–3 minutes until there’s a steady flow with no sputtering or air pockets.

Finally, inspect all connections for leaks before turning on the power. Taking these steps ensures your tankless heater starts safely and operates efficiently.

I’ve had users call me days after installation, saying their unit stopped heating. Nine times out of ten, they didn’t purge the system properly and fried the elements. Don’t skip this!

Once you’ve confirmed no leaks, close all water outlets before moving to the next step.

6. Wire The Electrical (No Room For Mistakes Here)

Electric tankless water heaters draw high amperage, and even a single bad connection can lead to fires, breaker trips, or permanent damage. Always follow the manufacturer’s wiring diagram exactly to ensure safe operation.

Use the correct gauge wire—typically 6 AWG copper, though some models may require thicker wiring. Secure all connections tightly and use strain relief clamps to prevent movement, which can cause loose connections over time.

Proper grounding is mandatory—never skip this step. Ensure all wires are connected to their designated slots and that ground conductors are properly linked to the circuit breaker panel’s grounding busbar. Taking the time to wire it correctly protects both your heater and your home.

WARNING: If you’re not 100% confident in your electrical skills, hire an EXPERIENCED ELECTRICIAN. I’ve had to redo too many DIY wiring jobs where people undersized wires and nearly set their homes on fire.

7. Reattach The Front Cover & Power It Up

Reattach the front cover and securely fasten it before restoring power. Turn on the circuit breakers, then power up the heater and check for any error codes.

Set the water temperature—110–125°F is ideal for home use. Open a hot water tap and ensure the geyser activates as expected. Don’t just rely on the display—use a thermometer to verify the actual output temperature.

I have seen some people crank the temperature to 140°F, thinking hotter is better, but that’s a mistake. It’s UNSAFE, wastes energy, and accelerates scale buildup, which can shorten the heater’s lifespan.

As you can see, installing an electric tankless water heater involves multiple steps and requires experience with electrical wiring, water lines, and system troubleshooting. Taking the time to do it right ensures safe and efficient operation.

While looking for additional resources, I came across this fantastic video from Jeff, explaining details of installing an electric tankless heater-

How To Install A Gas Tankless Water Heater?

If I have to compare, installing an electric tankless unit is relatively straightforward compared to a gas-fired model. This is because setting up gas-powered heaters requires paying close attention to details, as well as extreme caution, to avoid any chance of gas (LPG or propane) leaks.

Also, make sure you adhere to the Federal Safety Standards (especially the subpart H of part 192), the National Fuel and Gas Code, i.e., ANSI Z223.1/NFPA 54 in the USA, and/or applicable local regulations for installing your gas tankless heater.

That said, let us move ahead with the steps.

Step 1: Shut Off The LPG And Water Supply

At the very first step, we must shut off the gas supply from the main valve and turn off the water supply to the installation location.

I always double-check the gas shutoff using a pressure gauge or simply opening a nearby gas appliance to ensure the line is truly off. I’ve seen cases where homeowners assumed the valve was shut but later smelled LPG while working—never take chances with gas leaks!

Before anything else, I strongly recommend planning out the vent system for your water heater carefully, being mindful of the minimum clearance spaces recommended by the manufacturer. It is crucial that the vent system does not expel gas anywhere near the air intake pipes.

If you do not want separate inlet and exhaust vents, I recommend opting for 5-inch concentric vents; these are EASIER to install, requiring just one opening through the roof or wall. Moreover, they are safer, but do not forget to include a condensate trap.

Another quick suggestion here—do not plan on reusing older vent lines. I have encountered cases where people experienced poor performance and system failure after reusing old vent systems, so it is important to avoid this at all costs.

Step 2: Mount The Water Heater

Now, measure your gas tankless heater, and after keeping the required space allowance, mount it on the wall or place it on a stand, depending on the model you have. If it is designed for outdoor installation, do not attempt to install it indoors.

I’ve seen DIY installers mount their appliances too high or too low, making maintenance a nightmare. Always mount it at a height where you can easily access the gas valve, water filters, and condensate drain without needing a ladder or crouching uncomfortably.

Step 3: Install The Ventilation System

Ventilation setup depends on the type of tankless heater you purchased (or planning for one!) and the layout of your house.

If You Have A Condensing Tank-Free Geyser

For condensing gas tankless water heater, you can arrange for the vent to exhaust gases through a side wall or roof. We generally use 2-inch PVC or flexible polypropylene pipes for the vent because the exhaust is cooler. However, you cannot set up condensing heaters to vent through a chimney flue or share vents with other appliances. Also, don’t forget to connect a dedicated drain line through which the condensate (water vapor) will escape.

I’ve seen users install condensing units without a proper drain line for the condensate. Within weeks, they noticed pooling water and corrosion inside it. Never skip the drain line! If you’re in a colder climate, make sure the line is properly insulated to prevent freezing.

If You Have A Non-condensing Tankless Heater

For non-condensing water heaters, we MUST use solid metal venting that is resistant to both high corrosion and high temperatures. This is necessary because the exhaust gases are extremely hot and highly corrosive, requiring durable venting materials to ensure safe and efficient operation. Here, you do not need to set up a separate drain line because it does not generate condensate.

One of the most common mistakes I see is people using improper venting materials for non-condensing heaters. Using standard galvanized vent pipes can cause them to corrode quickly, leading to LPG leaks and dangerous gas buildup. Always use AL29-4C stainless steel or UPVC venting, depending on the model.

Also Compare: Condensing Vs Non-Condensing Water Heater

Step 4: Consider Direct and Power Venting

A. Direct Venting

More straightforward and cost-effective than power venting since it draws in outside air for the water heater through one vent and releases directly outside through another exhaust vent.

However, you will need appropriately sized pipes and ensure proper placement with the necessary clearances. Additionally, it is crucial to keep the system airtight and avoid sharp bends or angles in the pipes that might obstruct airflow.

Always install vent pipes with a slight upward slope (about 1/4 inch per foot) to ensure condensation does not pool inside, leading to blockages or corrosion over time.

B. Power Venting

This requires a more elaborate ventilation system, making installation more complex than direct venting. Power vents use a fan to draw in indoor air to heat the water and then expel the air outside after the heating is completed.

As such, installing power vents involves complex calculations of vent diameter, length, and placement. I strongly recommend referring to the manufacturer’s instructions for setting this up successfully, preventing potential hazards, and ensuring optimal performance of your gas tankless water heater.

Many people ignore the fact that power vent units need dedicated electrical circuits. Plugging them into an overloaded circuit can trip breakers and cause the geyser to shut down unexpectedly.

Step 5: Connect The Gas And Water Supply Lines

Gas Line Installation

• Connect the LPG (propane) supply line to the gas inlet valve of the tankless system.
• Try using flexible gas supply pipes, as they are easier to install and maintain.
• Use gas-rated Teflon tape on the threads.
• Install a gas shutoff valve for convenience during flushing.

WARNING: LPG leaks can be deadly. After installation of your water heater, always perform a BUBBLE TEST—apply soapy water to the gas connections and look for bubbles that indicate leaks. If you’re unsure, I highly recommend consulting an expert plumber nearby your location.

Water Line Installation

• Install a flow control valve on the cold water (inlet) pipe.
• Connect new inlet and hot water (outlet) pipes to the respective lines on the gas tankless system.
• Flush off any dirt inside the pipes before connecting them to the heater.

If you have hard water, consider installing a scale filter before the geyser. Scale buildup is one of the leading causes of early failure in gas heaters.

Step 6: Electrical Connections

Gas tankless water heaters need electricity to power up. Be very careful and attentive in this step!

We generally use a 240-volt circuit with a 30-ampere breaker, but this depends on the model and its size. Please closely follow the manufacturer’s recommendations and get the exact specifications to avoid electrical overloads and potential accidents.

I always tell people to use surge protectors on their tank-free heaters. A power surge can fry the control board, and I’ve seen replacements cost hundreds of dollars.

Step 7: Final Checks And Startup

Once you have verified the specifications accurately, connect the water heater to the power supply point, but don’t switch it on yet.

Next, turn on the gas line and conduct one final round of checking to rule out any possibility of leaks. You can use a gas leak detector or just soapy water to detect gas bubbles (this is my go-to technique), and once the inspection is complete, turn off the gas supply for a while.

Similarly, turn on the water supply line and check for leaks, and then turn on the hot water fixtures in your house to thoroughly purge away any residual air inside the pipes. Let the hot water run until all the air bubbles disappear.

Now that you have turned on the water supply, also turn the gas supply back on and connect the appliance to the power source.

Then, switch on your gas tankless heater, and test out some basic general functions by turning on a hot water faucet and following the instructions in the user manual.

I loved this video from Mr Post Frame with intricacies of installing a gas heater-

From the steps above, it is clear that installing a gas tankless is more COMPLEX than an electric tankless unit (detailed comparison here), especially the ventilation setup (the most crucial part, I would say). So, you might want to carefully read the user manual and then proceed to install this one.

Can You Install A Tankless Heater On Your Own?

Absolutely, you can install a instant water heater on your own, but that depends on your comfort level with plumbing, electrical work, and your overall DIY skills.

Let’s be honest: setting up water heaters is complex, as you can now see, with gas tankless units being significantly more complicated than electrically operated ones. If you are already experienced with these kinds of installations and following all local codes, etc., you might take the plunge. Otherwise, it will be worth calling in a professional.

Be very clear that this is not another quick weekend project if you are unfamiliar with the process; you MUST make sure to get all the steps right, including the venting and water connections and sealing to avoid leaks. And let us not forget about the electrical connections, ensuring the right voltage and circuit are in place.

You would rather not risk a single misstep that could end in a flooded basement, electrical shocks, or a brand-new damaged water heater! Besides, apart from SAFETY hazards, incorrect installation can also nullify its warranty.

So, if you ask me, allowing the experts to handle the intricacies of the task is a smarter choice.

Do You Need Special Plumbing For A Tankless Water Heater?

While I wouldn’t call it special per se, installing a tankless heater requires precise modifications to your plumbing infrastructure if it isn’t already set up for one. The basics remain the same—connecting to hot and cold water lines—but I trained my team to check typically for SPECIFIC FACTORS, such as:

These plumbing adjustments are nothing extraordinary, but they ensure proper groundwork and smooth compatibility for installing your on-demand water heater.

Pro Tips For Installation

After years of experience with tankless water heater installation, servicing, maintenance, and yes, troubleshooting, I’ve gathered some valuable insights. Here are a few expert tips (lessons learned) that I want to share with you:

Now that we’ve covered the steps, I think we can all agree—installing a tankless water heater is a solid upgrade for any home, but it’s no simple DIY job.

With all the plumbing modifications, precise electrical work, venting requirements, and the countless small details that demand attention, things can get complicated fast. And if you’re not completely confident in your skills, bringing in a pro isn’t just the safer option—it’s the smarter one.

Take it from me—it’s absolutely worth the peace of mind. At the end of the day, the GOAL is endless hot water, not endless frustration. So, let the experts handle the heavy lifting while you sit back and enjoy the benefits of going TANKLESS.