best tankless water heaters for prefab homes

Is a Tankless Water Heater Worth It For Your Prefab?

If you are in the market for a new water heater for your prefab build, you are probably searching for a way to go green.

One of the options you will run into as an alternative to the traditional storage-tank water heater is a tankless water heater.

In this guide, you will discover exactly what tankless water heaters are and how they work. We will go over their pros and cons, their costs, and some recommended top tankless water heaters to consider.

What is a Tankless Water Heater?

First of all, let’s go over the basics. A tankless water heater is simply a type of water heater that does not include a tank.

There are three main types of water heaters.

They are:

  • Storage tank water heaters: These are the traditional water heaters that include a tank. They are not very environmentally friendly.
  • Tankless water heaters: Our focus in this post is on tankless water heaters, which are more eco-friendly than traditional water heaters. Another name for them is “on-demand” water heaters.
  • Heat pump (hybrid) water heaters: Like tankless heaters, heat pump water heaters are an eco-friendly alternative to traditional water heaters. They use heat from the air to warm up the water.

We are not going to do a deep dive into storage tank water heaters or hybrid water heaters in this guide, since we are focusing on tankless heaters. Below, you can learn how they work.

How Do Tankless Water Heaters Work?

Here is how a tankless water heater warms up your water:

1. You turn on the hot water.

2. Cold water enters a heat exchange.

3. The water is heated.

4. The hot water comes out of the faucet. There is no waiting, since there is no tank to fill.

Pretty straightforward, right? You can find units that apply heat either through electricity or natural gas.

Key Benefits of Tankless Water Heaters

Tankless water heaters boast a number of exciting advantages.

  • Energy-efficient: Tankless water heaters are much more energy-efficient than their traditional counterparts. writes, “For homes that use 41 gallons or less of hot water daily, demand water heaters can be 24%–34% more energy efficient than conventional storage tank water heaters. They can be 8%–14% more energy efficient for homes that use a lot of hot water — around 86 gallons per day. In some cases you may be able to achieve even greater energy savings if you install a demand water heater at each hot water outlet.”
  • Help you save money: The less energy you are using to heat water, the less of your budget needs to go toward your energy bills. That means that you save significantly on costs over the years you use your tankless system. This can offset the higher initial cost of installing the tankless water heater.
  • Eco-friendly: When you use less energy to heat your water, you reduce your carbon footprint. By installing a tankless water heater, you are helping to protect the environment.
  • Fast: When you are using a water heater with a tank, you can run into hassles. You might run out of hot water in the middle of a shower, for example, because the tank has emptied. The person after you will also need to wait for it to refill before they can take theirs. Those problems become a thing of the past after switching to a tankless water heater. The hot water really is there on demand.
  • Long product life: You can get about 10-15 years of life out of a traditional water heater with a tank. But you can get more than 20 years of performance from a tankless system. Proper maintenance will help it to last as long as possible. Using longer-lasting products can help to reduce waste in landfills and keep more money in your wallet.

Do Tankless Water Heaters Have Any Drawbacks?

The biggest drawback to getting a tankless water heater is that you will pay more to get one than you would for a traditional water heater that includes a tank.

The good news is that over the long run, you should save money by purchasing a tankless water heater.

Heat Pump vs. Tankless Water Heaters

As we mentioned previously, both tankless and heat pump (hybrid) water heaters are energy-efficient alternatives to traditional water heaters. This may leave you wondering how the two technologies compare to one another.

  • Hybrid water heaters are the most energy- and cost-efficient water heaters to operate, especially if you live in a hot climate. Installation costs are lower as well. Alas, maintenance requirements can be intensive, and the units can take up a lot of space.
  • Tankless water heaters are a bit less efficient than heat pump systems, and cost more to install. But they do not require nearly as much room, so they are ideal for smaller residences.

How Much Are Tankless Water Heaters?

Naturally, you are going to want to know what to expect in terms of costs before you buy a tankless water heater.

Indeed, it is smart to be thinking about this, because there are two major costs you need to account for: the upfront cost to buy the unit, and the cost to install it.

  • Purchase cost: $1,000-$2,800 (sometimes more)
  • Installation cost: $250-$2,500

You will notice there is a significant price range for both—especially for installation. That is because there are so many variables involved. Some installation jobs are just a lot more elaborate than others.

That means you should take a good look at your setup before you order. You need to make sure you have enough budgeted. You do not want to go in expecting $250 in installation costs, only to be hit with a $2,500 bill.

Again, you should try not to be discouraged by the initial costs. Yes, they are high. But since you are going to be saving so much on your energy bills every month going forward, a lot of your investment is going to pay for itself, and that will happen faster than you think.

Best Tankless Water Heaters

You now know more about tankless water heaters and what makes them superior to traditional water heaters. Let’s take a look at some top tankless water heaters.

1. Rheem RTEX-24

24kW 240V Electric Tankless Water Heater, Gray

Rheem RTEX-24


  • 24kW
  • 240 volts
  • Up to 5.9 GPM
  • 18.25 x 14.5 x 3.5 inches
  • 3/4″ NPT connections on bottom

One of the top brands for tankless water heaters is Rheem. Among their most popular products is the Rheem RTEX-24 24kW 240V Electric Tankless Water Heater. This water heater sells in the middle price bracket, and features a digital temperature display, self-modulating power control, and a dial you can use to switch the appliance on or off.

What You Will Love About It

The Rheem RTEX-24 sells at a reasonable price point, and should be more than sufficient to meet the needs of most households. You can run up to 3 showers at a time with it thanks to its high kW.

At the same time, this is an eco-friendly, energy-efficient appliance that never uses more energy than you actually require based on your usage.

So long as this is the right kW for your home needs, you should never find yourself short of hot water so long as your house has power.

You will also appreciate how fast and simple the installation process is, as well as how compact the unit happens to be.

2. Rinnai RSC199iN

Smart-Circ Condensing Gas Tankless Water Heater

Rinnai RSC199iN


  • 199,000 BTU
  • Up to 11 GPM
  • Powered by natural gas
  • ‎33.86 x 21.26 x 14.37 inches

If you need something more powerful than the Rheem model above, you might want to consider the Rinnai RSC199iN Smart-Circ Condensing Gas Tankless Water Heater. This is a more expensive product, but with up to 11 GPM, it can provide hot water to up to 7 fixtures, rather than just 3. That makes it suitable for a larger household.

What You Will Love About It

This tankless water heater operates reliably, bringing hot water on demand to your fixtures. You also will love how quietly it runs.

To balance out energy-efficiency with convenience, this water heater features a proprietary technology called Smart-Circ. This technology takes note of when you are most and least likely to be using hot water. When you are not likely to need it, it cuts back on energy usage. When you are likely to need it, it increases its energy usage so it can make the hot water immediately available.

Note that you will need a professional installation for this water heater. That said, most buyers report that the installation process is rapid and that Rinnai offers excellent customer support.

One more reason we recommend this product and Rinnai in general is that this company does more in-house manufacturing of parts than a lot of other tankless water heater companies. That means that the Rinnai RSC199iN and this manufacturer’s other models feature superior components made with a higher level of quality control and consistency. As a result, their water heaters are less likely to malfunction or break down.

3. EcoSmart ECO 11 Electric Tankless Water Heater

eco smart 11


  • 13kW
  • 240 volts
  • 3.75 x 8 x 11.5 inches
  • Up to 3.1 GPM

If you do not need as much GPM as the other two units above, you can save money by going with the EcoSmart ECO 11 Electric Tankless Water Heater. According to the manufacturer, it is able to send hot water to 1-2 showers at a time, depending on whether you live in a cool or warm climate.

What You Will Love About It                                                                     

Along with being cost-effective, the EcoSmart ECO 11 gets points for being space-efficient and easy to install. In fact, if you are a DIYer, you can probably handle that bit yourself without any issues; just be aware that this will void your warranty. The ECO 11 is also really easy to use. So, if you have a small household, perhaps just yourself or two people, it may be ideal for your needs.

Frequently Asked Questions

Q: How hot do tankless water heaters get?

A: You should be able to get the temperature to around 100 to 140 degrees Fahrenheit. The exact range will depend on which product you buy.

Q: Do tankless water heaters have a lot of problems?

A:  Tankless water heaters certainly can have issues. But on the whole, they tend to run smoothly and efficiently. Getting a tankless water heater from a trusted brand is a good way to ensure you have a fantastic experience.

Get Your Own Electric Tankless Water Heater For Your Prefab Build

If you want to save space in your home, cut down on your energy bills, protect the environment, and enjoy on-demand hot water, a tankless water heater can be a great investment.