Where To Install An Electric Tankless Water Heater [Detailed Guide]


When installing an electric tankless water heater, it’s very important to select an ideal location for it. Most often users install it in pantries, storerooms, or under-stair spaces.

While all these are perfectly good spots to install, the location determines the efficiency of your unit. Finding which spot leads to the most efficiency can be tricky.

In this article, we discuss which are the best locations for installing the electric tankless water heater and why.

Here are a few pointers to help you find the best location:

1. Near the Point of Max Usage

One of the biggest advantages that tankless water heaters have over traditional heaters is that they are much smaller.

While tanked heaters almost always go into basements, these compact units can be installed right at the point of use.

You can mount them on walls, in cabinets, under sinks, in the attic, or other unconventional spaces. Some of these heaters are no larger than a phone book. This means that they can be carried along when camping or in an RV too.

But if it suits you better, they can always replace the tanked heater in the basement as well. This video guides you into the process of installation, focusing initially on location and orientation

2. If covering multiple floors, place at a location on the top floor

If your house has multiple floors, it’s best to locate the heater on the top floor. This increases the efficiency of the system as the water won’t have to be pumped against gravity.

Find a location that is also isn’t too far from the fixtures where you need the hot water. If this distance is minimal, the amount of time taken for water to heat reduces.

The more the distance the water has to cover, the longer it will take for water to recirculate and heat up.

Setting up a utility room as this works best:


3. You can install it outdoors – but evaluate carefully

Most tankless water heaters are designed to be installed indoors. However, some companies also supply models that are meant for outdoor installation.

Usually, these models are labeled differently using an “i” or “in” for interior/indoors and “e” or “os” for exterior/outside.

While outdoor models can not be installed inside, indoor models can be installed outdoors if absolutely necessary.

To do this, you must ensure that the system is protected from rain, sunlight, debris, and insects. Building a waterproof casing or shed can protect your heater from these conditions.  

Here’s a video on an outdoor installation:


4. Choose a location which minimizes plumbing

Most installation manuals suggest that you should try to find a location that does not require major plumbing alterations.

If you have to relay the entire plumbing system configuration afresh, it may lead to unnecessary expenses.

So if you are considering the already existing configuration, your location can also be identical or similar to your previous heater.

Keep in mind that you will have to change electrical connections because tankless heaters use a lot more power.

The number and size of circuit breakers and wiring are mentioned in the specifications. Since you already have to make alterations based on them, it helps if the plumbing at least stays the same.

Watch this useful video to learn more about plumbing tips:


5. The location should have enough room for maintenance

As tankless water heaters come in much smaller units, they don’t take up much space when installed. The electric ones don’t even need any venting.

Because of this, it’s tempting to pack them into cramped spaces like Tetris blocks, but it isn’t that simple. Though it makes sense to minimize space usage, you want to keep enough room for you to move around them.

This will let you or your plumber perform routine maintenance or troubleshooting easily. Many systems have their user interface on the front panel.

Make sure you find a location that suits your product dimensions and also gives you free moving space. As you’ll see in this video, the heater is installed keeping these things in mind:


6. Keep it away from extreme weather

It’s very important to ensure that you pick a location where your heater won’t be exposed to freezing temperatures. This is especially important if your heater has drain lines.

If the water inside the pipes freezes, it will cause irreversible damage to the system. To avoid that, make sure that you empty the drainpipes if freezing is possible.

Many systems come with a safety measure of anti-frost protection. If you purchase a heater with this safety device, remember that it only works when the system is plugged in.

If you’re in the habit of unplugging the system, you’ll have to keep the drain pipes empty. Watch this video for more advice on frost-prevention:


7. Don’t pick a spot that cancels the warranty

Usually, tankless heaters come with specific instructions in the user manual that indicate things that could void the warranty. Sometimes, these specify particular locations where the product should not be installed.

Always read the entire manual before beginning the installation process. The warranty information can be found towards the end of the document.

As the initial cost of an electric tankless water heater is high, you don’t want to cancel the warranty. Choose a location that adheres to the instructions specified.

If you are seeking more details about water heater warranties, this video will be helpful:


Other Precautions to take

The location you pick for your electric tankless water heater should be completely free of humidity or moisture. Exposure to water molecules will corrode the system and cause irreversible damage.

Keep the system away from anything that might splash water. Find a spot that is inaccessible to children as they may tamper with or damage the unit.

As leaks are possible, you need to ensure that there are no electrical circuits right under the heater.

While the breaker box should be near, it shouldn’t be in the range of any potential leaks. The system should also not be near any combustible substances. If your supply water is hard, installing a water softener will protect the life of your heater.

This video talks about three things you should know before buying a tankless heater:



Tools you’ll need for DIY Installation

As this is a heavy-duty home improvement, doing it will require some tools. These include power tools, plumbing tools, and electrical equipment:

  • Pipe cutter/tubing cutter
  • Flexible hose pipes
  • A voltage detector
  • Dielectric connections
  • A power drill
  • Soldering gun
  • Plumbing tape
  • Wrench
  • Screwdriver

To see a demonstration of how some of these tools will be used refer to this video:



Picking the right location for your electric tankless water heater will determine how efficiently it works. The better the efficiency, the more power and money you save.

Find a spot closest to your point of use, at the topmost floor, and near electrical connections.

Keep enough room for maintenance and see if you can use the existing plumbing. Make sure you comply with safety standards and the instructions given in the warranty.

About Sharon Martin

Sharon is a woman of many talents. She loves to work on power tools and provides handyman services. Sharon has expertise with both woodwork and metalwork, so she's always prepared for any job! When not working, Sharon can be found listening to country music or spending time with her cats.