For construction professionals and installers in many markets across the United States, ease of venting is the most appealing benefit of condensing tankless water heaters. Unlike traditional tankless water heaters, indoor condensing units can be vented with PVC pipe, which is less expensive and quicker to install than the Category III stainless-steel pipe used on conventional tankless water heaters.

But with all the excitement over PVC venting, construction professionals in warmer areas (where tankless water heaters are often installed outside) might be missing out on one of the primary benefits of condensing technology: efficiency. In a 2,400-square-foot home in Los Angeles, where energy costs run high, replacing an electric tank water heater with a propane tankless water heater would save $553 and 407 pounds of CO2 emissions per year, according to the Heating Energy Cost and Carbon Calculator. And with an Energy Factor about 14 points higher than traditional units, condensing tankless units would provide additional savings.

“I think that a lot of the propane users are not taking advantage of the condensing units because they’re thinking, ‘Well, PVC venting really doesn’t matter because we’re putting the units outside,'” Jason Fleming, marketing manager at Noritz America, says. “But if pros really want the consumer to get the highest-efficiency product, then they use the condensing unit. Even if they’re using an outdoor unit and they go with a condensing model, they’re still getting that highest-efficiency product.”

Both the venting possibilities and the efficiency of condensing tankless water heaters, which run on natural gas or propane, result from their technological difference from conventional products. Condensing tankless water heaters incorporate a second heat exchanger that captures residual heat from flue gases to preheat incoming groundwater, which then circulates to the primary heat exchanger. With the addition of the second heat exchanger, condensing units’ thermal efficiency can be as high as 97 percent, resulting in less energy consumption and lower operating costs. The second heat exchanger also cools the flue gases enough to permit venting with plastic piping.

“Water heating consumes 20 to 30 percent of a home’s energy use, depending on where you are,” Trey Hoffman, global product manager for Rinnai, says. “Through a combination of government efforts, general awareness-raising, and people’s greater concern for the environment and conserving resources, water heating has gotten more and more attention.”

Because condensing units cost more than traditional tankless water heaters, they may be difficult to sell purely on ROI, Hoffman notes. But for customers who want the latest, most efficient technology, condensing units may be a more popular choice. And that’s not to mention the benefits that all tankless water heaters bring to a home – endless hot water and space savings where smaller tankless units replace bulky tank water heaters.

Rinnai offers its Ultra condensing line in 9.8- and 8-gpm models, vented with polypropylene. Noritz expanded its EcoTough series of condensing tankless water heaters this year with the NRC83, an 8.3-gpm model that joins the company’s 9.8- and 11.1-gpm condensing units. Rheem and Bosch are among the other manufacturers offering efficient condensing units.