Top benefits of tankless water heaters for pros & their customers
Plumbing pros know that there are multiple factors to consider when selecting a water heater for a residential or commercial customer. While some are better suited for certain plumbing jobs than others, a tankless water heater — also known as an instant hot water heater — offers residential energy savings and advantages for a variety of commercial applications.
To help you start the conversation with your customers who are weighing the best options for them, discuss tankless water heater benefits for residential and commercial buildings.
Top benefits of a tankless water heater
Whether it’s the value of the upfront cost or the logistical application fit — residential and commercial customers have different respective decision drivers and concerns when it comes to switching to a tankless water heater. A thorough evaluation of these drivers helps you address specific customer hesitations and sell core advantages — like higher energy efficiency — making it easier for your customer to determine if a tankless system is the right solution for them.
Tankless water heaters use less space.
Following the 2015 NAECA water heater standards legislation, standard storage water heaters became larger in general, and more room for airflow was required for all sizes. This footprint expansion creates a distinct challenge when it’s time to replace an older model, as existing mechanical spaces often lack the necessary room to meet current NAECA standards.
Transitioning to tankless water heaters serves as an ideal retrofit enabler, solving these tight code and clearance considerations. Both gas and electric tankless water heaters require far less space and are much smaller than traditional options that store water. Because they can be mounted on the wall, they maximize clear floor space. Keep in mind that gas units are typically bigger than electric, and a gas system will require dedicated clearance for ventilation, while an electric one will not.
To determine capacity for a household, calculate how much water the household will need at once, in gallons per minute, instead of total gallon capacity. Manufacturers typically share guidance on how much simultaneous use the end user can expect with each model.
Pro tip: As a design solution for layouts with long pipe runs, you can recommend adding a small point of use, or POU, tankless water heater near remote faucets — such as outdoor showers, kitchens, and hot tubs — to minimize energy loss.
An instant water heater can help meet commercial safety regulations.
In certain compliance-driven applications where hazardous materials are handled, facilities must provide eyewash, facewash, and drenching stations with tepid water maintained between 60°F and 100°F. As part of a facility's safety system support, tankless water heaters offer a reliable way to consistently provide tepid water on demand while eliminating the energy loss associated with standby water heating. They also help meet facility requirements for clear floor space since the units can be wall-mounted.
When specifying these safety systems, it is the contractor's responsibility to handle precise temperature control and flow rate validation. For emergency applications, you must ensure the selected unit’s flow rate can fully support and sustain the required temperature for a mandatory minimum of 15 minutes.
On-demand water heaters are more energy efficient.
Because high-efficiency tankless gas water heaters can feature manufacturer-rated efficiencies of up to 34% greater than traditional storage units and usually offer a longer lifespan, they provide significant lifecycle cost advantages over time. For a pro, this presents an excellent opportunity to specify and install a premium, value-added system.
The choice between a gas or electric model is often predetermined by the building's existing infrastructure, but when evaluating system selection tradeoffs, there are distinct technical considerations with each option. Electric tankless units generally operate with high thermal efficiency but carry heavy electrical load requirements that may necessitate upfront service upgrades. Conversely, gas systems deliver higher flow rates for rapid heating but require specific gas line sizing, adequate pressure, and dedicated venting infrastructure.
Find out how a water heater earns an ENERGY STAR label.
Customers can save with tankless water heater rebates.
While the initial capital outlay for a tankless hot water heater can be higher than for traditional storage tanks, energy bills are not the only potential source of cost relief. Some state and local utility companies offer tax credits and rebates for purchasing and installing qualified models.
These local rebates can sometimes total several hundred dollars before federal tax credits are applied, serving as a helpful supplemental talking point rather than the primary justification for tankless selection. Because rebate availability is not guaranteed and eligibility criteria vary significantly by location and utility provider, you should qualify these incentives during customer consultations.
To check which rebates are offered in your customer’s area, visit the ENERGY STAR® rebate finder.
Instant water heaters can earn LEED water efficiency credits.
For specific commercial and institutional projects pursuing LEED certification from the U.S. Green Building Council, tankless water heaters can serve as a valuable component of the overall sustainability strategy. Those participating in the LEED program may earn points toward improving their building’s rating by specifying high-efficiency tankless models that meet strict performance and energy optimization standards.
Tankless designs can drastically reduce installation times.
While retrofitting tight spaces is a major selling point, tankless installations can also streamline labor. Certain modern high-efficiency condensing tankless units are engineered to cut installation time significantly by utilizing the same top-connect water configurations as traditional tanks.
However, pros must remain diligent during the site assessment. Always verify existing infrastructure capacities against the manufacturer’s specifications before quoting a drop-in swap.
Multi-unit setups build redundancy and prevent emergency calls.
For commercial clients, a primary selling point for safety compliance is system redundancy. By chaining or cascading multiple tankless units together on a modular rack system, contractors can build a setup where the workload is balanced dynamically.
If one unit requires service, it can be isolated for maintenance without shutting down the entire hot water supply. This eliminates the catastrophic single-point failure of a traditional commercial boiler or storage tank, drastically reducing late-night emergency calls for the contractor and protecting the client from costly operational downtime.
High ticket prices drive higher contractor revenue.
From a business management standpoint, the higher initial capital outlay of a tankless system works in the contractor's favor. Because tankless units command a higher ticket price than traditional storage tanks, the money earned on equipment markup is significantly higher. This revenue opportunity can help contractors comfortably cover operational expenses, invest in specialized technician training, and realize stronger profitability per truck roll.
Scheduled maintenance creates recurring revenue through service contracts.
Tankless units require annual or bi-annual maintenance — specifically descaling and flushing — to clear out mineral scaling and maintain efficiency. Contractors can leverage this to pitch recurring service contracts during the initial installation. This builds a predictable, steady stream of maintenance revenue while keeping your business top-of-mind for your customers’ future plumbing needs.
Remote monitoring helps technicians troubleshoot systems faster.
Modern tankless installations increasingly feature Wi-Fi-enabled control boards and companion apps designed specifically for tradespeople. Through platforms like Rinnai Central or Intellihot's telliCare, contractors can remotely monitor system health, track error codes, and review operational data before ever dispatching a technician. This smart diagnostic capability allows for proactive maintenance, speeds up troubleshooting, and ensures that when a tech does arrive on-site, they already have the exact parts needed to fix the issue.
Ferguson can help with the transition to tankless.
If you’d like answers to more specific questions about helping your customers make the switch, visit your local Ferguson. Our knowledgeable associates can discuss how to select the right water heater for the job.