Propane Gas Water Heaters – Tankless vs. Tank Type

For homeowners who live outside natural gas service areas, the water heating method of choice is a propane gas water heater. Propane is a liquefied petroleum gas (hence the terms “liquid propane gas” or “LP Gas”) produced by refinement of raw crude oil or natural gas. Propane gas hot water heaters come in tank type and tankless (also called on demand or instant) models.

Tankless Water Heaters

Propane tankless water heaters are self-contained heat exchangers that sense downstream demand and turn off when no longer needed. Tankless heater operation is analogous to that of an air conditioner. Water passes through coils and is heated to a preset temperature by a propane fired burner. The heated water flows to and through the tap until it is closed. Sensing that the water flow has stopped, the heater shuts down. Learn more about tankless water heaters in this video.



Tankless water heaters are very efficient in using gas as they only heat water on demand. No gas is used at all until the hot water valve is opened by a downstream water fixture. High efficiency and reduced emissions make a tankless heater more cost effective and environmentally friendly, and for this reason it has become the preferred type of water heater.

Tank Type Water Heaters

Tank type propane water heaters use a large internal tank to store heated water. Gas is continually in use as the temperature is kept constant regardless of hot water use and demand. This operation results in an inefficient standby heat loss, but propane is still cost effective when compared with electric or natural gas water heaters. Tank type heaters require pipe, fittings and plumbing connections and, as they require proper venting, their installation is subject to space and location limitations.

Tankless vs. Tank Type

The same amount of hot water can be supplied by a propane water heater regardless of type. While tankless heaters can cost up to twice that for tank type heaters, the savings in using a tankless heater will allow you to recoupt the cost in a few months. Moreover, tankless heaters are compact and take up much less space, so they can be installed on an interior wall or even within a wall depending on the model.

Propane Gas Water Heater Models

The Rinnai 7.5 GPM Outdoor Tankless Water Heater can be installed on an exterior wall and is a good choice for two- or three-bathroom homes. It is certified for installation in mobile homes, is Energy Star Qualified and is priced around $1000. The Bosch 1600P-LP AquaStar Tankless Water Heater supplies one major hot water outlet at a time with prices ranging from $540 to $725. Ace Hardware sells Reliance water heaters with capacities ranging from 30 to 50 gallons; some models can be installed in mobile homes. Sears sells Kenmore 30-, 40- and 50-gallon gas water heaters priced from $480 to $540. You can also buy water heaters locally or online at Lowe’s and The Home Depot.

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