Do Tankless Water Heaters Run on Gas or Electricity?

Comparing the benefits of two kinds of popular on-demand water heaters.

water heater Wake County, NCAre you in the market for a new water heater? Has your current unit been making your showers shorter and shorter while using more energy in the process?

In Wake County and throughout North Carolina, homeowners are exploring the benefits of tankless water heaters. They may be

Why have tankless units become a popular alternative to traditional storage tank systems? They are smaller, longer-lasting, more reliable and up to 34% more efficient than their storage tank counterparts! The team at LG Jordan Oil & Gas knows these products inside and out and can answer virtually any inquiry you have about them, including whether they use gas or electricity, which we’ll cover in this article.

How Do Tankless Water Heaters Work?

As the name implies, tankless water heaters don’t store hot water in a large tank the way traditional systems do. Instead, they heat water only when you need it, whenever a faucet is opened or a hot-water appliance is turned on.

When hot water is requested, a powerful heat source — either a gas burner or an electric heating element — activates instantly. Cold water flows through the unit, is heated to the set temperature and is delivered directly to the faucet or appliance. Once the demand stops, the system shuts off, helping conserve energy and reduce waste.

Tankless water heaters are available in both gas-fired and electric models, delivering several major advantages:

  • Endless hot water. Because water is heated as it’s used, you won’t run out mid-shower, even if the dishwasher is running too.
  • Improved energy efficiency. Without a tank keeping water hot around the clock, tankless systems minimize standby energy loss, helping lower utility bills.
  • Space-saving design. Compact and wall-mounted, tankless units are typically about the size of a suitcase, making them a great option for homes with limited space.
  • Longer lifespan. With proper maintenance, tankless water heaters often last 20 years or more, significantly longer than most traditional tank systems.

With the basics covered, let’s take a closer look at how propane and natural gas-fired tankless water heaters compare to electric options.

Gas vs Electric for Tankless Water Heaters

Gas-powered tankless water heaters are a popular choice for many homeowners, and for good reason. Propane and natural gas generate heat more quickly and efficiently than electricity, resulting in faster hot water delivery and stronger performance overall. Propane tankless systems reach target temperatures almost instantly, making them especially well-suited for busy households with multiple simultaneous hot-water needs.

Propane is also widely regarded as a cost-effective energy source, particularly in areas where electricity rates fluctuate or spike during peak demand. Homeowners who choose propane tankless systems often enjoy consistent operating costs without sacrificing comfort or reliability.

Another advantage is independence from the electric grid. Propane tankless water heaters are an excellent solution for rural or off-grid homes where electric capacity may be limited.

That said, electric tankless water heaters do have a place. They can be a practical option for apartments or smaller homes. However, they come with notable trade-offs, including higher long-term energy costs and slower heating response. While electric systems may work well for low-demand households, propane tankless water heaters typically outperform them in homes with greater hot-water needs.

Interested in discovering how a gas-powered tankless water heater can improve your quality of life and lower your energy spending? Contact LG Jordan today to get a FREE estimate.


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