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Installing a tankless water heater means sizing it to your home’s flow demand, mounting it, and connecting water, gas, and venting. Because gas line, venting, and electrical work are involved, installation is best handled by a licensed plumber rather than done entirely as a DIY project.
A tankless water heater doesn’t just bolt onto the wall where the old tank sat. It needs the right flow-rate sizing for your household, a gas line rated for its higher BTU draw if it’s gas-fired, and a venting system engineered for its exhaust temperature and condensate. This guide walks through every stage of that process: sizing the unit correctly, mounting and connecting it, the gas and venting requirements specific to tankless equipment, and the mistakes that cause the most installation callbacks. It also covers which steps a confident homeowner can handle and which ones belong to a licensed plumber.
How Is a Tankless Installation Different From a Tank Water Heater?
A tankless installation differs from a tank water heater mainly in three ways: it’s sized by flow rate instead of storage volume, gas models often need a larger gas line, and venting requirements are more specific to the unit’s exhaust temperature and condensate output.
A tank replacement is largely a like-for-like swap: same general footprint, same water connections, often the same vent. A tankless unit changes the calculation on all three fronts. It draws gas at a higher rate during operation than a comparably sized tank, which can outstrip an existing gas line’s capacity. It also mounts on a wall rather than sitting on the floor, and depending on whether it’s a condensing or non-condensing model, it vents through entirely different materials than a standard atmospheric tank does.
Is Installing a Tankless Water Heater a DIY Project?
Installing a tankless water heater is only partly a DIY project: sizing, mounting, and preparing the water connections are reasonable homeowner tasks, but the gas line, venting, and electrical connections are not.
This isn’t a matter of general handiness. It’s that tankless units combine three regulated trades, gas, venting, and electrical, into a single appliance, and getting any one of them wrong carries a safety consequence that isn’t always obvious immediately.
Why Tankless Units Are More Complex Than They Look
Tankless units are more complex than they look because they concentrate gas line sizing, precise venting, and an electrical connection, even on gas models, into one compact wall-mounted appliance instead of spreading that complexity across a simpler tank setup.
A.O. Smith’s own installation documentation for these units walks through gas supply upgrades, vent system planning with mandatory condensate traps on concentric setups, and a leak test on both the water and gas lines before the unit is considered complete. Manufacturer guidance for condensing models goes further, stating plainly that installation is best handled by a licensed plumbing contractor specifically because it involves disconnecting and reconnecting gas lines, along with venting and wiring work that has to meet code.
When to Hire a Licensed Plumber
Hire a licensed plumber for any step that involves opening a gas line, running or connecting new venting, or making the electrical connection, and for the full installation if you’re not confident handling the DIY-appropriate steps that remain.
A licensed plumber also brings something a homeowner installation can’t: the leak testing and combustion verification equipment, along with the training to interpret the results correctly, that confirm the unit is actually safe to operate before it’s left running unattended in your home.
Tools and Materials You’ll Need
The tools and materials needed depend on which parts of the installation you’re handling, but a homeowner prep kit generally includes a stud finder, level, drill, pipe wrench, adjustable wrenches, a bucket, and a garden hose.
If you’re preparing the water-side connections yourself, add isolation valve kits, flexible or rigid water line fittings, plumber’s tape, and the wall-mounting bracket that ships with the unit. The specific unit’s installation manual will list any model-specific hardware, such as a condensate neutralizer kit for condensing units or a particular vent termination kit, that needs to be on hand before the professional portions of the job begin.
Sizing a Tankless Water Heater by Flow Rate
A tankless water heater is sized by calculating your household’s peak simultaneous flow demand in gallons per minute (GPM), then choosing a unit rated to deliver that flow at your coldest expected incoming water temperature.
This is a fundamentally different calculation than sizing a tank, which is based on stored volume. A tankless unit doesn’t store anything; it has to heat water in real time to match whatever’s being drawn from it, which is why both flow rate and temperature rise matter together rather than either alone.
Calculating Gallons Per Minute (GPM) Demand
Calculating GPM demand means adding up the flow rate of every fixture likely to run at the same time, since that combined total is what the unit has to be able to deliver without a drop in temperature.
A shower typically draws about 2 to 2.5 GPM, a kitchen faucet around 1.5 GPM, and a bathtub filler closer to 4 GPM. A household that regularly runs a shower and a kitchen faucet simultaneously needs a unit rated for at least that combined demand, commonly in the 6 to 8 GPM range for a typical two-bathroom home, with larger households sometimes needing 8 to 10 GPM.
Temperature Rise and Climate Considerations
Temperature rise is the difference between your coldest incoming water temperature and your target output temperature, and it directly affects how much flow a given unit can actually deliver.
A unit’s advertised maximum GPM rating usually assumes a smaller temperature rise than colder climates require, so the same model can perform noticeably differently installed in a warm-groundwater region versus a cold one. Always check the manufacturer’s rated flow at your specific calculated temperature rise, not just the headline GPM number on the box, since that number alone can overstate what the unit will deliver in winter.
Choosing the Right Wall Location
Choosing the right wall location means finding a spot with adequate clearance from combustible materials, appropriate access for venting, and, for gas units, reasonable proximity to the gas supply.
Location affects more than convenience here; it affects how much additional gas line, venting, and wiring the installation needs, which has a direct effect on both cost and complexity.
Clearance and Combustible Surface Requirements
Clearance and combustible surface requirements set the minimum distance the unit and its exhaust must maintain from nearby wood framing, drywall, or other flammable material, and the specific numbers come from the unit’s own installation manual rather than a universal figure.
These clearances exist on all sides, including above and in front of the unit for service access, and mounting height and surrounding clearance both affect how easily a technician can perform the annual maintenance the unit will eventually need.
Indoor vs. Outdoor Units
Indoor tankless units are installed inside conditioned or semi-conditioned space and vented out through a wall or roof, while outdoor units are designed to be mounted directly on an exterior wall, venting straight to open air without ductwork.
Outdoor models simplify venting considerably, since there’s no interior wall or roof penetration to plan around, but they need to be rated for your local climate, particularly freeze protection in colder regions. Indoor models offer more placement flexibility relative to existing plumbing but require a properly planned vent run to the outside.
Step 1: Shut Off Water, Gas, and Power
Shutting off water, gas, and power means closing the cold water supply at the nearest stopcock valve, turning off the gas supply at the main shutoff valve, and switching off the breaker if you’re removing an electric unit.
This step only involves operating existing shutoff points, which makes it a reasonable starting task for a homeowner regardless of which parts of the rest of the installation you plan to handle yourself.
Step 2: Remove the Old Water Heater (If Replacing One)
Removing the old water heater means draining any remaining water, disconnecting the water supply lines, and disconnecting the gas connector at the shutoff valve or the electrical leads at the junction box, depending on the old unit’s fuel type.
For a tank unit, drain it fully through the drain valve before disconnecting anything else. Disconnect gas connections at the point where the flexible connector meets the shutoff valve, rather than opening any rigid gas piping further back, and disconnect electrical connections only after confirming the circuit is de-energized with a non-contact voltage tester.
Step 3: Mount the Unit to the Wall
Mounting the unit to the wall means securing its bracket to structural framing at the correct height and orientation specified in the installation manual, then leveling the unit before making any connections.
Because a tankless unit hangs entirely off the wall rather than resting on the floor, getting the mounting right matters more than it would for a tank.
Securing the Mounting Bracket
Securing the mounting bracket means anchoring it directly into wall studs, not just drywall, using the fasteners specified by the manufacturer, since the bracket has to support the unit’s full weight indefinitely.
Locate studs with a stud finder before drilling, and confirm the bracket is rated for your specific model’s weight, since heavier commercial-grade units may require additional structural support beyond a standard residential bracket.
Leveling the Unit
Leveling the unit means confirming it hangs perfectly plumb on the bracket before any water, gas, or vent connections are made, since a unit installed out of level can affect both its internal drainage during descaling and how cleanly its fittings align.
Use a level against the front face of the unit after it’s hung, and adjust the bracket rather than trying to compensate with the connections themselves.
Step 4: Upsize the Gas Line (Gas Units)
Upsizing the gas line means installing a larger-diameter gas pipe capable of delivering the tankless unit’s higher BTU demand, and this work involves modifying gas piping, which makes it a job for a licensed plumber rather than a homeowner task.
A tankless unit’s instantaneous heating draws significantly more gas during operation than a comparable tank unit spread over a longer cycle, which is exactly why an existing gas line sized for the old tank often can’t support the new unit without an upgrade.
Why Tankless Units Often Need a Larger Gas Line
Tankless units often need a larger gas line because they have to deliver their entire heating output the instant water starts flowing, rather than heating gradually over time the way a storage tank does.
A tank water heater might have a 30,000 to 40,000 BTU burner running for a stretch to reheat a stored volume. A tankless unit serving the same household can require 150,000 to 199,000 BTU or more delivered instantly, which is a demand many existing residential gas lines, sized for a smaller tank unit, were never built to carry.
Calculating Gas Line Size by BTU Input
Calculating gas line size by BTU input means matching pipe diameter to the unit’s maximum BTU rating combined with the total length of the gas line run and any other appliances sharing that line, using a sizing table from the National Fuel Gas Code or local plumbing code.
A licensed plumber performs this calculation based on the total connected load on the line, not the new water heater in isolation, since an undersized line affects every appliance drawing from it, not just the newest one.
Step 5: Install Isolation Valves
Installing isolation valves means placing a hot and cold shutoff valve kit directly at the unit’s water connections, giving future maintenance a way to isolate the heater from the rest of the home’s plumbing.
This is generally a reasonable DIY task for a homeowner comfortable with basic plumbing fittings, since it’s a water-side connection rather than gas or electrical work.
Why a Service Valve Kit Is Essential for Future Maintenance
A service valve kit is essential for future maintenance because tankless units need periodic descaling to clear mineral buildup from their heat exchanger, and isolation valves let a technician flush the unit without disconnecting it from the plumbing system entirely.
Manufacturers commonly recommend or require water testing and periodic descaling, often on an annual basis in hard water areas, specifically because scale buildup can block the narrow channels inside the heat exchanger and eventually cause the unit to shut down from overheating. Skipping the isolation valves at installation doesn’t prevent this maintenance need; it just makes every future descaling visit slower and more expensive.
Step 6: Connect the Water Lines
Connecting the water lines means attaching the cold water inlet and hot water outlet through the isolation valves you’ve installed, along with a pressure relief valve rated for the system and, if incoming pressure exceeds 80 psi, a pressure-reducing valve.
This step is generally within reach for a homeowner handling basic plumbing connections. Use plumber’s tape on threaded fittings, confirm the pressure relief valve has proper discharge piping routed to an approved location, and if the household plumbing uses a recirculation system, plan for an appropriately sized expansion tank and check valves on that line as well.
Step 7: Install the Venting System
Installing the venting system means running correctly sized, code-approved ductwork from the unit’s exhaust outlet to its outside termination point, and this work is completed by a licensed plumber, since incorrect venting creates a direct carbon monoxide risk and manufacturer guidance specifically calls out venting as professional-scope work.
Vent material, diameter, and configuration all have to match the specific unit; reusing old tank venting isn’t an option, since tankless exhaust characteristics are different enough that manufacturers explicitly instruct against it.
Concentric vs. Two-Pipe Venting
Concentric venting combines intake and exhaust into a single pipe assembly, simplifying wall or roof penetrations, while two-pipe venting uses separate intake and exhaust lines, offering more flexibility for long runs or routing around existing obstructions.
Concentric systems generally require a condensate trap built into the venting itself, while two-pipe systems route condensate separately. The choice between them often comes down to the specific installation location: concentric is typically simpler where a single clean penetration is possible, while two-pipe suits situations where the intake and exhaust need to take different paths.
Condensate Drain Line (Condensing Units)
A condensate drain line carries the acidic water vapor that condenses inside a condensing tankless unit’s secondary heat exchanger to an approved drain, and it’s a requirement specific to condensing models rather than all tankless units.
Because this condensate is acidic, some local codes require a neutralizer kit in the drain line to raise its pH before it reaches household plumbing, protecting pipes from corrosion over time. Non-condensing units skip this requirement entirely, since their exhaust stays hot enough that no condensation occurs, which is also why non-condensing models need metal venting rather than the plastic venting condensing units can use.
Step 8: Complete the Electrical Connection
Completing the electrical connection means wiring the unit to power, either a standard outlet for many gas models or a dedicated circuit for electric tankless units, and this connection is made by a licensed electrician or plumber qualified for the electrical portion of the work.
Even a straightforward outlet connection on a gas unit still involves confirming the circuit is correctly rated and grounded, which is squarely electrical work rather than a plumbing task.
Why Even Gas Tankless Units Need Power
Even gas tankless units need power because their ignition system, control board, and flow sensor all run on electricity, unlike a standing-pilot tank water heater that can operate without any electrical connection at all.
This is a real difference from a traditional atmospheric tank: a gas tankless unit will not produce hot water during a power outage, even though it burns gas rather than electricity to heat the water itself, since the electronics controlling ignition and flow detection need power to function.
Step 9: Power On and Program the Unit
Powering on and programming the unit means turning it on once all connections are complete and verified, then setting your target output temperature and any additional features through its control panel or app.
This step is safe for a homeowner to handle directly, since it involves using the unit’s interface rather than touching any gas, water, or electrical connection. Most units allow temperature adjustment in small increments, and many offer a companion app for remote monitoring and adjustment once the unit is online.
Setting the Output Temperature
Setting the output temperature means choosing a target, commonly around 120°F for most households, balancing scald safety against the temperature needed for dishwashers and other appliances that may need slightly hotter water.
A thermostatic mixing valve, if installed on the system, can allow the unit itself to run a bit hotter for appliance needs while blending down to a safer temperature at fixtures used for bathing.
Flow Sensor Calibration
Flow sensor calibration confirms the unit correctly detects water flow and activates its heating response accordingly, and most modern units handle this automatically without any manual calibration step required from the installer or homeowner.
If hot water seems to activate inconsistently or with a noticeable delay after installation, this is worth mentioning to whoever performed the installation, since it can point to a flow sensor or minimum activation threshold issue worth checking against the manual’s specifications.
Step 10: Test for Leaks and Proper Operation
Testing for leaks and proper operation means checking every water and gas connection for leaks and confirming the unit ignites and heats correctly before considering the installation complete.
A homeowner can reasonably check the water-side connections themselves, visually inspecting fittings for drips once the system is pressurized. Gas connections are tested differently, using a soap-and-water solution or a gas detector at every joint, and this portion is performed by the licensed plumber who handled the gas connection, since detecting a slow gas leak isn’t reliably done by sight or smell alone.
Common Tankless Installation Mistakes
The most common tankless installation mistakes are an undersized gas line, skipped isolation valves, and improper venting slope or length, and all three tend to surface as performance problems well after the installation is finished rather than during the work itself.
Each of these mistakes is avoidable with correct sizing and planning before the unit ever goes on the wall.
Undersized Gas Line
An undersized gas line can’t deliver enough fuel to the burner during peak demand, causing the unit to underperform, throw an error code, or fail to reach its rated output even though every other part of the installation is correct.
This mistake is common specifically because it’s invisible until the unit is under real load; a line that seems fine during a basic test can still be inadequate once multiple fixtures draw hot water simultaneously.
Skipping Isolation Valves
Skipping isolation valves at installation doesn’t cause an immediate problem, but it turns every future descaling or service visit into a more involved, more expensive job, since the technician has to disconnect the unit from the plumbing system entirely rather than simply closing two valves.
Given how inexpensive isolation valves are relative to the unit itself, skipping them to save a small amount upfront is a common regret homeowners report once the first maintenance visit comes due.
Improper Venting Slope or Length
Improper venting slope or length can cause condensate to pool inside the vent instead of draining correctly, or can exceed the unit’s rated venting capacity, both of which reduce performance and, in more serious cases, can affect safe exhaust removal.
Manufacturer manuals specify maximum total vent length, including the equivalent length added by each elbow, and installations that stretch beyond those limits without adjusting for it are a recurring source of callback service visits.
How Much Does Tankless Water Heater Installation Cost?
Tankless water heater installation cost depends on the unit itself, labor, and whether the existing gas line, venting, or electrical circuit needs upgrading to support the new unit.
A straightforward replacement of an existing tankless unit with a compatible gas line and venting already in place typically costs less than a first-time conversion from a tank system, since a conversion often requires new gas line sizing, new venting from scratch, and sometimes a new electrical connection, none of which exist yet in a home that’s never had a tankless unit.
Do You Need a Permit for a Tankless Water Heater?
Yes, most jurisdictions require a permit and inspection for a tankless water heater installation, including a replacement of an existing tankless unit, not just a first-time conversion from tank to tankless.
An inspection typically confirms the gas line is correctly sized for the new unit’s BTU demand, the venting meets code for the specific unit type, and the electrical connection is properly made. Skipping the permit can complicate a future home sale and may affect insurance coverage if a gas or electrical issue later traces back to unpermitted work.
Frequently Asked Questions
Can I convert my existing tank water heater location to tankless?
Often yes, but a straight swap into the same spot isn’t guaranteed to work without changes. The existing gas line may need upsizing for the tankless unit’s higher BTU demand, and the tank’s old vertical vent typically can’t be reused, since tankless venting requirements differ enough that manufacturers specifically instruct against reusing tank vent lines.
Do tankless water heaters need a bigger gas line?
Frequently, yes. A tankless unit can require 150,000 to 199,000 BTU or more delivered instantly, compared to the lower, more gradual demand of a storage tank’s burner, which means an existing line sized for a tank often can’t support a tankless unit without upgrading.
How often does a tankless unit need to be flushed after installation?
This depends on your water hardness, but many manufacturers recommend annual descaling, more frequently in areas with hard water. This is exactly why isolation valves installed at the time of setup matter: they let a technician flush the unit quickly rather than disconnecting it from the plumbing system for every service visit.
Get Professional Tankless Water Heater Installation
If you’re installing or converting to a tankless water heater, a licensed plumber can size the unit correctly, handle the gas, venting, and electrical connections, and confirm the installation passes inspection before it goes into regular use.