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According to the government of Canada, an ENERGY STAR certified tankless water heater uses 30% less energy, on average, than a storage tank type. (https://www.nrcan.gc.ca/energy/products/categories/water-heaters/14541)  Not only does this save you money, but it also reduces your carbon footprint!  As you do your homework on tankless water heaters, you will come across the two types – condensing and non-condensing.  When it comes to energy efficiency, go with a condensing model.  Here’s a quick explanation of the difference between the two.

The fuel in your tankless water heater creates steam or water vapour as a byproduct.  A non-condensing tankless water heater will vent these hot byproducts, which cool down outside the unit. This stuff is hot, with temperatures around 150 degrees C , and must be vented through heat resistant, corrosion resistant channels.  When heat is vented, energy is wasted. Non-condensing units have efficiencies around 80%, meaning around 20% of the heat is wasted through the venting of this condensation.

Condensing tankless water heaters recycle that extra heat and only vent the vapour when it’s no longer useful for the heating process, somewhere around 38 degrees C.  Since the vapour from a condensing tankless water heater vent is much cooler, it doesn’t require the same expensive venting material. A standard PVC pipe is often used, as it can easily withstand the heat and the corrosiveness of the vapour.  Since the condensing unit captures and reuses the residual exhaust heat, you get efficiency in the area of 98%.

If, energy efficiency is the prime reason for going with a tankless water heater, condensing units should be your first choice.