Tankless Gas Water Heaters

How They Work

Tankless gas water heaters, also known as demand-type or instantaneous water heaters, provide hot water only as it is needed. They heat water instantaneously without the use of a storage tank. When a hot water faucet is turned on, cold water flows through a heat exchanger in the unit and a natural gas burner heats the water as it flows through.

Because there is no storage tank, tankless water heaters deliver a constant and never-ending supply of hot water. They don’t produce the standby energy losses associated with storage water heaters, which can save money. Learn more about tankless water heaters here.

What Assistance Is Available for Me?

The federal government offers a tax credit of up to 30% of the cost of the purchase and installation of a tankless gas water heater (maximum $600 credit). Find more information about federal tax credits for tankless gas water heaters here.

What Products Are Eligible?

Only tankless gas water heaters that have earned the ENERGY STAR with a UEF greater than 0.95 are eligible for the federal tax credit. Find eligible products here.

Important Dates

The federal tax credits are available for products purchased and installed between January 1, 2023, and December 31, 2032.