Informational Guide

Condensing Vs Non Condensing Tankless Water Heater

by Andrew

As you can probably guess by the name, a tankless water heater doesn't have a tank. So instead of heating and storing water, a tankless water heater heats cold water that flows through a heat exchanger and is used directly without storage. These are sometimes referred to as on-demand water heaters.  

Tankless water heater systems have become very popular because of their efficiency and cost-effectiveness compared to traditional water heater tanks. There are two types of tankless water heaters: condensing and non-condensing. Each has its advantages and disadvantages. 

In the following guide, we will examine the debate between condensing vs. non-condensing tankless water heaters and see how they differ. 

A condensing tankless water heater doesn't release the condensation caused by heating the gas out through the exhaust. With a traditional water heater, water is heated with gas, and the steam created by the combustion is vented outside to dissipate into the air. 

With a condensing tankless unit, the steam is cooled before it exits, and then it condenses. Then what happens to the condensate? There's a second heat exchanger that heats the water. The second heat exchanger heats the cooled condensate and circulates it to the pipes leading to the primary heat exchanger. 

outdoor tankless water heater

The water is warmed on the way to the primary heat exchanger, so it takes less fuel to heat it up. 

Condensing tanks are very efficient, perfect for anyone looking to save on their heating and water bills. 

Pros & Cons of Condensing Units 

The Good  
  • Very efficient 
  • Can be constructed with cheaper materials 
  • Save on fuel and heating costs 
  • Good longevity 
The Bad 
  • Corrosion is an issue 
  • May not condensate depending on surrounding air 

How Do Non-Condensing Tankless Water Heaters Work?  

A non-condensing tankless water heater is a basic form of a gas-powered tankless water heater that only has one heat exchanger. The fuel in a non-condensing tankless water heater creates steam as a byproduct. The steam cools and condenses on a surface. 

The water formed by condensation is acidic and can corrode common home appliance materials. 

A non-condensing tankless water heater vents these hot byproducts, cooling down outside the unit. This stuff can reach 150 degrees Celsius and must be vented through heat resistant, corrosion resistant channels. Venting it can be costly. 

tankless water heater

Pros & Cons of Non-Condensing Units 

The Good  
  • Can use existing fixtures when making the switch 
  • Cheaper than condensing models 
  • Smaller in size 
  • Easy to maintain 
The Bad 
  • Exhaust is very hot 
  • Not as efficient 

Condensing Vs Non-Condensing Tankless Water Heaters: Key Differences Explained  

Maybe you thought selecting a tankless water heater would be easy. But then you started looking into it and realized there were condensing and non-condensing tankless heaters, and things got a little more complicated. Based on our findings, condensing tankless water heaters seem to be the better option, but you can't go wrong with either. 

Below we will compare the condensing and non-condensing heaters and explain key differences. 

Heating Efficiency  

Efficiency is vital to most people these days. That said, condensing water heater models outperform the non-condensing ones at 90% compared to 80%. Both condensing and non-condensing tankless heaters are more efficient choices than electric models, so you'll be getting greater efficiency either way. 

Longevity of the Unit  

When each type is maintained correctly, a gas-powered tankless water heater can last longer than 20 years. But both condensing and non-condensing models have components that will wear out faster. In a condensing tankless water heater, the pipes that handle the condensing have to be a high-grade, corrosion-resistant material. If they aren't, they can rapidly degrade and need to be replaced.  

A non-condensing tankless water heater has hotter steam that passes through the exhaust and ventilation systems. This can lead to degradation and leaks over time. 

Reliability In All Conditions  

Condensing water heaters are the best system in cold climates, making them the most reliable under any circumstance. In addition, the water temperature that comes out of the heater can be increased without wasting energy or pulling any energy from another heating system in the house.  

Cost Savings For Homeowners  

Condensing tankless water heaters save more money. They do this by recycling their byproducts to produce extra heat. Depending on how the condensation line is connected, this byproduct can be recycled back into your water lines, slightly reducing your water bills.  

Ease Of Installation  

Both tankless systems have a pretty straightforward installation process. However, when converting from a traditional tank model to a non-condensing tankless model, you can often use existing fixtures. This means you'll spend less money on a flu system, which can be the most expensive part of most water heater systems. 

Ease Of Maintenance  

With a non-condensing tankless model, you will only need to worry about professional maintenance. Other models often require both DIY and professional attention. 

Environment-Friendly Aspects  

Both types of tankless water heaters release negligible amounts of toxic vapors into the air. Condensing units do have a much lower carbon footprint than any other tankless water heater currently available on the market. 

tankless water heater

Purchase Price  

Because of the additional heat exchanger, condensing tankless systems tend to be more expensive than their non-condensing counterparts. The extra components can also lead to additional maintenance costs throughout its lifespan. However, the extra upfront cost typically balances out due to the long-term utility savings they provide. Therefore, non-condensing units tend to be the cheaper option upfront. 

Comparing Condensing & Non-Condensing Tankless Water Heater Brands  


More homeowners and business owners choose Rinnai over any other tankless water heater brand. This is because Rinnai has super high-efficiency and even hybrid models of their tankless heaters. So no matter what you're looking for, Rinnai has a tankless heater for you. 


Navien is more well known for its non-condensing tankless heaters. Navien has put more non-condensing ingenuity into tankless than anyone else. Their compact NPN-U series has unmatched performance and durability. 


Noritz offers high-quality condensing and non-condensing tankless units. And with Noritz, you can wirelessly control your heater, diagnose and maintain any issues, and view your usage statistics over time with the Noritz wireless adapter. 


Takagi offers endless hot water with its tankless systems. Although they provide both condensing and non-condensing units, Takagi offers more condensing units that get you more hot water. 

AO Smith  

AO Smith also favors condensing tankless heaters. Their condensing natural gas and propane tankless water heaters are highly efficient and ENERGY STAR® certified. AO Smiths' condensing models are available in indoor and outdoor configurations, and they pair high efficiency with groundbreaking designs. 


Rheem is great for businesses looking to install tankless water systems. They have commercial tankless water heaters that are up to 96% Thermal Efficiency with a stainless steel condensing heat exchanger. 


Richmond Encore Tankless systems are about one-third of the size of conventional water heaters, saving you a lot of space. In addition, their tankless water heaters offer user-friendly features that make the Richmond Encore Condensing Tankless Heater the easiest tankless water heater to own. 

shower heads

People Also Ask (FAQs)

Does a non-condensing tankless water heater need a drain? 

A non-condensing tankless water heater can vent the steam, which cools down outside the unit. This steam must be vented through heat and corrosion-resistant channels. The gases are vented directly instead of being looped back through the heater. 

Are all electric tankless water heaters condensing?  

Electric tankless water heaters are non-condensing. However, they are comparably efficient to condensing tankless water heaters and do not have the same venting issues as gas water heaters. 

Are condensing gas water heaters more efficient? 

Condensing gas water heaters are much more efficient. Instead of sending hot exhaust gases out the flue, which wastes energy, condensing heaters blow them through a coil at the bottom of the tank. The incoming cold water flows around the coil, collecting most of the heat. That's why condensing gas water heaters are so efficient, with up to 96 percent thermal efficiency. 

What is a condensing on-demand hot water heater? 

With a condensing on-demand tankless system, there isn't a supply of hot water that can be depleted. So instead, the water heater heats up water when you need it or when there is a demand for it. The tankless system will keep doing this as long as there is demand, meaning you won't run out of hot water! 


Both condensing and non-condensing tankless water heaters are effective, genuine energy savers. However, condensing tankless water heaters are the most efficient, utilizing inexpensive venting material. Condensing units are more expensive to manufacture, but you can recoup your initial investment due to the energy efficiency of the units. Non-condensing tankless water heaters are cheaper upfront but require costly stainless-steel venting materials and are less efficient.