Rogelio Alvarez

By: Rogelio Alvarez on October 24th, 2023

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Condensing vs. Non-condensing Tankless Water Heaters

Tankless Water Heaters

If you’re currently exploring different water heater options, you probably have encountered condensing or non-condensing tankless water heaters. Shopping for a new water heater can be troublesome when so many options are available, and it’s hard to tell them apart from each other. To help make that journey more manageable, you will need to look at how condensing and non-condensing tankless water heaters compare. 

For over 15-plus years, we at Monkey Wrench Plumbing, Heating & Air have continued to help homeowners in Los Angeles and the surrounding neighborhoods with all their tankless water heater needs. Our experience, combined with specialized training from the top tankless water heater manufacturers, has enabled us to break things down for homeowners so they can confidently research water heaters for their homes. 

In this article, you will gain valuable insight into how condensing and non-condensing tankless water heaters operate and how they can benefit your home. To achieve this, we’ll compare these two tankless water heaters in the following categories. 

  • Efficiency 
  • Ventilation 
  • Upfront cost
  • Environmental 

Let’s jump right in!


What Is the Difference Between Condensing and Non-Condensing?

Condensing and non-condensing tankless water heaters provide houses with continuous hot water as needed by various fixtures, but their efficiency, ventilation, costs, and environmental impact differ. These two tankless water heaters are powered by natural gas and have burners that create the flame that heats water. 

The image shows three condensing tankless water heaters on the left and three non-condensing tankless water heaters on the right. Both sets of tankless water heaters are from A.O. Smith.

(A.O. Smith's condensing tankless water heaters on the left and non-condensing on the right.)

A key difference is that condensing tankless water heaters have two heat exchangers, and non-condensing has one heat exchanger. Heat exchangers are a crucial part of tankless water heaters because it’s responsible for transferring the heat generated from the unit and transferring it to the incoming water to produce hot water. 

Here’s a closer look at how heat exchangers operate within condensing and non-condensing tankless water heaters.

  • Non-Condensing: These tankless water heaters only have one heat exchanger. When the gas-fueled flame heats the steel or copper heat exchanger, the heat is transferred to the running water, which is heated to a specific temperature. 
  • Condensing: During the water heating process, natural gas combusts and produces hot exhaust gas and steam. The second heat exchanger recycles this heat to preheat incoming water. Once the second heat exchanger cools down, it produces condensed water vapor. 

The image shows a steel exchanger from a tankless water heater.

(A steel heat exchanger)

Non-condensing and condensing tankless water heaters are considered energy efficient thanks partly to how heat exchangers play a role in the water heating process. Still, the extra heat exchanger affects the energy efficiency of tankless water heaters. 


Which Is More Efficient Condensing or Non-Condensing Tankless Water Heaters?

  • Non-condensing tankless water heaters have a UEF rating between .80 to .85
  • Condensing tankless water heaters have a UEF rating of over .90

The Uniform Energy Factor is a standard measurement established by the Department of Energy to determine the energy efficiency of residential water heaters. The higher the rating, the more efficient a tankless water heater is, and condensing units have a higher rating than non-condensing tankless water heaters. 

Condensing tankless water heaters have a higher rating because they more efficiently convert energy to heat water. Thanks to a secondary heat exchanger, condensing tankless water heaters use less energy than non-condensing units because they can recycle heat from exhaust gases as a heating source. 

With non-condensing tankless water heaters, exhaust gases and steam are ventilated instead of recovered by a secondary heat exchanger. Ventilation is another factor that separates condensing tankless water heaters from non-condensing ones. 


Ventilation Requirements

Condensing and non-condensing tankless water heaters have different requirements for venting based on their designs. Homeowners may not think about ventilation when choosing a new tankless water heater, but it’s a significant part of any water heater installation. 

Here’s a breakdown of how venting differs between condensing and non-condensing tankless water heaters. 

  • Non-Condensing: The type of venting required depends on the specific model and brand of tankless water heater. Manufacturers include the ventilation required for these tankless water heaters so technicians understand what kind of venting they will need. 
  • Condensing: These tankless water heaters have built-in special venting required to help capture the exhaust gases. This process produces condensate. The condensed water is acidic due to the combustion process and needs to be collected and removed to prevent interior tankless water heater damage. The non-captured gases can be vented with PVC plastic pipes which are cost-effective

Any modifications required to accommodate any new venting needed for a new tankless water heater can affect the final price. 


Cost Differences Between Condensing and Non-Condensing 

Condensing and non-condensing tankless water heaters fall within the same price range of $4,500 to $8,500. Nonetheless, condensing tankless water heaters can cost between $200 to $500 more.

Condensing tankless water heaters cost a little more due to their technological design and high energy efficiency. Many factors can impact the price of a condensing or non-condensing tankless water heater, such as name brand, additional modifications, and optional accessories. 

Energy efficiency doesn’t just impact the upfront cost, but it can also determine long-term energy savings. Due to its higher energy efficiency ratings, condensing tankless water heaters can provide homeowners with more money in energy savings than non-condensing units. 

Although it’s a major investment, condensing and non-condensing tankless water heaters can save homeowners money despite having different energy ratings. Aside from money, do condensing and non-condensing tankless water heaters impact the environment?


Environmental Impact 

Condensing tankless water heaters negatively impact the environment less than non-condensing units. Non-condensing tankless water heaters consume more fuel than condensing water heaters to heat the same amount of water and produce more greenhouse gases. As a result of their superior energy efficiency, condensing tankless water heaters require less fuel consumption, resulting in lower greenhouse gas emissions. 

The condensed wastewater produced by condensing tankless water heaters is acidic and potentially harmful to a home’s yard and garden. To counteract this, some cities require tankless water heater installations to include a neutralizer that neutralizes the acidity and makes it safer to dispose of.  

The image shows a standalone neutralizer.

(A neutralizer for a tankless water heater.)

Both condensing and non-condensing tankless water heaters produce greenhouse gases, and homeowners who want a more environmentally friendly water heater should consider an electricity-only tankless or conventional water heater. 


Is a Condensing or a Non-Condensing Tankless Water Heater Right for Me?

Whether you choose condensing or non-condensing, your home will be positively impacted by the savings tankless water heaters provide on top of having accessible hot water. Now that you know the differences between condensing and non-condensing tankless water heaters, you can confidently narrow your search for the right water heater for your home. 

Since 2007, we’ve helped local homeowners pair their homes with the proper water heaters. At Monkey Wrench Plumbing, Heating & Air, our technicians work with the top tankless water heater brands so that homeowners do not have to worry about an improper tankless water heater installation. 

If you’re interested in a condensing or non-condensing tankless water heater, contact us using one of the buttons below. You can also book an appointment through our online scheduler for a tankless water heater installation.

We understand that tankless water heaters may not be a viable option for all homeowners. Learn more about conventional water heaters for more information on water heating alternatives.

If you’re eager to learn more about tankless water heaters, find out how long it takes to install a tankless water heater so you’re best prepared for an installation appointment.