The best overall tankless water heater in 2026 is the Navien NPE-2 240S — a condensing gas unit with a 0.96 UEF, 11.2 GPM max flow rate, and built-in recirculation pump, all for around $1,600–$1,900. For electric, the EcoSmart ECO 36 leads with 36 kW of heating power, a 0.99 UEF, and a price under $700.
Every recommendation below is based on published AHRI-certified specifications, not affiliate relationships. We ranked units on efficiency (UEF), flow rate at realistic temperature rises, warranty terms, and installed cost-per-GPM. Here are the 12 best models across three categories.
How We Ranked These Units
Most "best of" lists rank water heaters by brand deals. We used a weighted scoring system based on five objective criteria:
- UEF (30% weight): Higher efficiency means lower operating costs. We used AHRI-certified values only.
- Flow rate at 77°F rise (25%): This is the realistic cold-climate performance metric, not the inflated 35°F-rise number.
- Warranty (20%): Heat exchanger warranty length, parts warranty, and labor coverage.
- Installed cost-per-GPM (15%): Total estimated installed cost divided by GPM at 77°F rise — the true value metric.
- Features (10%): Built-in recirculation, Wi-Fi monitoring, error code diagnostics, and modulation range.
All prices reflect 2026 market averages from major retailers and licensed installers.
Best Gas Condensing Tankless Water Heaters
These are the top-tier, whole-home workhorses. Condensing technology recovers heat from exhaust gases, pushing UEF above 0.90 and allowing cheap PVC venting.
1. Navien NPE-2 240S — Best Overall Gas Tankless
The NPE-2 series is Navien's second generation, and the 240S variant is the flagship. At 199,900 BTU/h with a 0.96 UEF, it matches or beats every competitor on raw efficiency.
What sets it apart is the built-in recirculation pump with NaviLink Wi-Fi control. You get instant hot water at every tap without buying a separate pump ($200–$400 savings), and you can monitor runtime, error codes, and energy usage from your phone. The ComfortFlow system learns your usage patterns and pre-circulates hot water before peak times.
The 15-year heat exchanger warranty is the longest in the category. Navien's dual stainless steel heat exchangers resist corrosion better than single-exchanger designs, which matters in areas with aggressive water chemistry.
Best for: Whole-home applications in any climate, families of 3–6, homeowners who want smart-home integration.
2. Rinnai RU199iN — Best Track Record
Rinnai essentially invented the residential tankless market in the U.S., and the RU199iN reflects decades of refinement. The 0.93 UEF is slightly below Navien and Noritz, but Rinnai's reliability reputation is unmatched — their field failure rate is among the lowest in the industry.
The ThermaCirc360 recirculation system is available as an add-on ($200–$300). The unit supports both indoor and outdoor installation (outdoor model: RU199eN) without a separate outdoor enclosure. The scale detection system alerts you when descaling is needed, preventing the #1 cause of premature failure.
Best for: Homeowners who prioritize long-term reliability and extensive dealer networks for service.
3. Noritz EZ111 — Best Efficiency
The EZ111 achieves a category-leading 0.97 UEF — the highest we've seen in a residential gas tankless unit. It uses a dual fire-tube heat exchanger design that squeezes every possible BTU from combustion gases.
The EZLink Wi-Fi module provides remote monitoring and diagnostics. The EZ111 also features a wider modulation range (18,000–199,900 BTU/h, or 11:1 turndown ratio), meaning it adjusts more precisely to low-demand situations. This prevents the "cold water sandwich" effect that cheaper units struggle with.
Best for: Homeowners focused on maximum energy savings and tax credit qualification (UEF ≥ 0.95 requirement).
Tax credit alert: All three condensing models above qualify for the 30% IRA tax credit (up to $2,000) because they exceed the 0.95 UEF threshold. On a $1,800 unit, that's a $540 credit — effectively paying for the efficiency premium over non-condensing models.
Best Gas Non-Condensing Tankless Water Heaters
Non-condensing units cost $400–$800 less than condensing, but they require more expensive stainless steel venting and operate at a lower 0.80–0.85 UEF. They make sense when you need to replace an existing non-condensing unit (venting already in place) or have a very tight budget.
4. Rinnai V94iN — Best Non-Condensing
The V94iN delivers 9.8 GPM at 35°F rise and 4.5 GPM at 77°F rise — the highest throughput in the non-condensing category. At $1,000–$1,250 before installation, it's also the most cost-effective path to whole-home tankless for budget-conscious homeowners in moderate climates.
The unit is available in both indoor (V94iN) and outdoor (V94eN) configurations. It supports optional recirculation and has a 12-year heat exchanger warranty. The main trade-off vs condensing: you'll spend $200–$500 more on stainless steel venting and lose out on the IRA tax credit.
Best for: Budget installs, warm-to-moderate climates, replacing an existing non-condensing unit with stainless venting already in place.
5. Rheem RTG-84XLN-3 — Best Value Non-Condensing
Rheem's entry hits a sweet spot at $900–$1,100. The 180,000 BTU/h output and 0.82 UEF are middle-of-the-pack, but Rheem's availability through Home Depot and Lowes makes it easy to source, and their contractor network is extensive.
The RTG-84XLN-3 features a hot-start programming function that reduces the cold-water sandwich effect. The 12-year heat exchanger warranty matches competitors. It lacks Wi-Fi connectivity or built-in recirculation, but at this price point, those are reasonable omissions.
Best for: Homeowners who want straightforward replacement with wide parts availability.
Best Electric Tankless Water Heaters
Electric models dominate three scenarios: point-of-use applications, homes without gas service, and warm climates where low temperature rise makes electric feasible for whole-home use.
6. EcoSmart ECO 36 — Best Electric Whole-Home
At 36 kW, the ECO 36 is the most powerful residential electric tankless available. It delivers 6.1 GPM at 35°F rise, which means it can handle two showers simultaneously in climates where groundwater is above 60°F. In cold climates, it's a solid single-shower, multi-faucet solution.
Self-modulating technology adjusts power draw based on demand, so you're not pulling 150A when only filling a sink. Lifetime warranty on the heat exchanger (for the original owner). The compact 17" × 17" × 3.75" footprint mounts anywhere.
Best for: Warm-climate whole-home use (Southwest, Southeast, coastal California), homes without gas lines.
7. Stiebel Eltron Tempra 36 Plus — Best Electric Build Quality
Stiebel Eltron is a German manufacturer that's been making tankless heaters since the 1920s. The Tempra 36 Plus matches EcoSmart on specs but adds Advanced Flow Control — when demand exceeds capacity, it reduces flow rate rather than delivering cold water. You get warm water at lower pressure rather than cold water at full pressure.
The build quality is a step above competitors. Copper heating chambers, solid brass fittings, and a 7-year parts warranty. The digital temperature display is precise to 1°F. It costs $150–$200 more than the ECO 36, which buys you reliability and flow management.
Best for: Homeowners who want premium build quality and intelligent flow management.
8. EcoSmart ECO 11 — Best Point-of-Use
For single-fixture applications — a guest bathroom, an office kitchen, a remote laundry room — the ECO 11 delivers 2.2 GPM on a single 60A circuit. At $200–$300 installed, it's the most cost-effective way to add hot water to a space without running long pipe runs.
The 13 kW draw is manageable for most 200A panels without an upgrade. Installation takes a licensed electrician 1–2 hours. The unit is 11.5" × 8" × 3.75" — smaller than a laptop.
Best for: Point-of-use installations, under-sink applications, guest houses, tiny homes.
Electric reality check: Even the most powerful electric tankless (36 kW) only delivers 2.7 GPM at a 77°F rise. In Minneapolis (groundwater 40°F, requiring 80°F rise), that's barely one shower. For cold-climate whole-home use, gas remains the only practical option unless you install multiple electric units.
Quick Recommendation Matrix
Not sure which category fits your needs? Use this decision matrix:
Real-World Performance: What Spec Sheets Don't Tell You
The Cold Water Sandwich Problem
When you turn on a faucet, you get cold water (sitting in the pipes), then a slug of hot water (left in the heat exchanger from the last use), then another burst of cold water (new water entering before the burner fully fires), and finally consistent hot water.
Units with wider modulation ranges handle this better. The Navien NPE-2 and Noritz EZ111, with their 11:1 turndown ratios, fire the burner at lower output during the transition, smoothing the temperature fluctuation. Budget units with 3:1 or 5:1 turndown ratios produce a more noticeable sandwich effect.
Altitude Derating
Gas units lose capacity at elevation. At 5,000 feet, expect roughly 10% derating. At 7,000 feet, it's 15–20%. A 199,000 BTU/h unit in Denver effectively delivers ~175,000 BTU/h. Size accordingly and check the manufacturer's altitude rating — most units are rated to 2,000–3,000 feet without modification and up to 7,000–10,500 feet with an altitude kit.
Hard Water Impact
In areas with water hardness above 12 GPG (much of the Midwest and Southwest), scale buildup can reduce flow rates by 20–30% within 12 months without descaling. Models with scale-detection alerts (Rinnai, Navien) are worth the premium in hard-water areas. Budget $60–$200/year for descaling services, or $30–$60 for a DIY kit.
Noise Levels
Gas tankless units generate 50–65 dB when firing at full capacity — roughly the volume of a normal conversation. Condensing units tend to be slightly quieter (50–58 dB) than non-condensing (55–65 dB). Electric units are nearly silent (under 40 dB). If the unit is mounted on a bedroom wall, consider a condensing model or electric for the lowest noise.
Installation Cost Expectations by Model
Install costs vary by region. Labor rates in San Francisco, New York, and Boston run 40–60% higher than national averages. In the South and Midwest, expect to land at the lower end of the ranges above. Always get 3 quotes from licensed installers.
Key Takeaways
- Best overall: Navien NPE-2 240S — 0.96 UEF, 11.2 GPM, built-in recirculation, 15-year warranty
- Best electric: EcoSmart ECO 36 — 36 kW, 0.99 UEF, under $700, ideal for warm climates
- Best value: Rinnai V94iN — reliable non-condensing at $1,000–$1,250
- Best efficiency: Noritz EZ111 — 0.97 UEF, highest gas efficiency available
- Size by GPM at YOUR temperature rise, not the inflated max-flow number
- Gas condensing qualifies for the 30% IRA tax credit (UEF ≥ 0.95) — save $400–$600
- Don't skip annual descaling — it protects your $1,500–$4,000 investment
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