U.S. Department of Energy - Energy Efficiency and Renewable Energy

Federal Energy Management Program

New and Underutilized Technology: Tankless Water Heaters (Gas)

The following information outlines key deployment considerations for tankless water heaters (gas) within the Federal sector.


Tankless water heaters (gas) do not have a storage tank. Sold in condensing and non-condensing models. A conventional non-condensing storage tank water heater has an efficiency factor of 0.60. A typical non-condensing tankless water heater has an energy factor of 0.80. Efficiencies are dependent on the frequency of water draws for tankless water heaters and total hot water consumption for storage tank water heaters.


Tankless water heaters are applicable in most building categories with residential size water heaters.

Key Factors for Deployment

FEMP designated purchasing specifications require Federal agencies to purchase instantaneous (tankless) water heaters that have a thermal efficiency of 94% or higher when they have an input of 200,000 Btu/h or greater. This means it must be a condensing water heater.

Gas tankless water heaters require a minimum flow as high as 0.7 gallons per minute (gpm). If draws are at a lower flow rate, the water heater will not fire.

Newer tankless water heaters include a small buffer tank that mitigates some issues with a delay in hot water during the water heater purge cycle at the start of every draw.

Ranking Criteria

Federal energy savings, cost-effectiveness, and probability of success are ranked 0-5 with 0 representing the lowest ranking and 5 representing the highest ranking. The weighted score is ranked 0-100 with 0 representing the lowest ranking and 100 representing the highest ranking.

Federal Energy Savings Cost Effectiveness Probability of Success Weighted Score
0.9 4.0 4.3 50