Indoor Vs Outdoor Tankless Water Heater: Which One Is Right for You?

Indoor Vs Outdoor Tankless Water Heater

Tankless water heaters are an energy-efficient and cost-effective way to heat your home’s water supply. A tankless system is ideal whether you’re looking to upgrade or replace your current water heater. I have compared Indoor vs Outdoor Tankless water heaters so you can decide which option is best for you.

Indoor tankless water heaters are less expensive and easier to install, while outdoor tankless water heaters are more energy efficient and can be used in areas with extreme temperatures. 

This article will share the pros & cons of indoor vs outdoor tankless water heater and help you decide which water heater is perfect.

Comparison Of Indoor Vs Outdoor Tankless Water Heater

Indoor Tankless Water Heater

Outdoor Tankless Water Heater

Lacks setup for indoor gas heater

New home

Spend less on unit

Vandalism concerns

Several point-of-use heaters

Cold or windy climate

Poor interior drainage

Limited space

Gain a quiet home

High risk of power outages

Indoor Vs Outdoor Tankless Water Heater: Pros And Cons

Here are the pros and cons of indoor vs outdoor tankless water heater: 


Pros Of Indoor Tankless Water Heater

Let’s look at why you should install an indoor tankless heater:

  • Increase the resale value of a new construction

If you’re creating a new residence, you should consider installing a heater immediately. This is especially critical if you use a gas-powered water heater. 

All the necessary venting and gas lines will be put in place when installing the home, and no additional changes will be required.

The advantages of an indoor tankless gas heater (such as lower energy costs & no risk of weather damage) will raise the resale value of your home.

  • Ideal for cold or windy climates

An indoor water heater is the best option if you reside in a location where the temperature can dip down to freezing levels (even for just a short period yearly). This will reduce the chances of the heater getting damaged due to the cold.

To ensure the best protection for your heater, you’ll need to insulate or cover the pipes outside your home. No other upkeep is necessary.

An indoor heating system will be the better option if you reside in an area with strong winds or heavy mist from the sea, as these environmental conditions could harm an outdoor unit.

Cons Of Indoor Tankless Water Heater

There are quite a few downsides to indoor tankless water heaters – 

  • A tankless gas heater will need annual maintenance

An indoor gas heater requires annual maintenance. A qualified HVAC technician must inspect your furnace each year to confirm that it is burning correctly and that there are no holes or breaks in the pipes. Without regular maintenance, your family is at risk of carbon monoxide poisoning.

  • Indoor heaters make noise

Both gas and electric heating systems produce sound when used. However, the noise is more obvious when it comes to gas heaters. Specific individuals are displeased by this. Installing a heater inside a room increases the chances of hearing the sounds it produces.

  • There’s a risk of leaks

It is possible that your heater may not be functioning correctly and therefore cause a leak. While the amount of water leakage from a defective tankless heater is less than that of a tank water heater, it can still cause some destruction. 

When it reaches the end, tiny leaks will probably occur. On the other hand, when the heater is located outdoors, there are hardly ever any issues with leaks.

  • Indoor gas heaters must have venting

It is necessary to provide ventilation for indoor gas heaters to prevent deadly gases from infiltrating the house’s interior. If your residence does not have adequate ventilation, it will take your effort to make it happen. Additionally, obtaining authorization from the local government for the construction may be necessary.

  • Gas water heaters create condensation

When gas tankless water heaters are in use, they have the potential to produce a great deal of condensation. A suitable drainage system must be in place to prevent water damage to the home’s inside. This should include a condensate drain connected to a utility sink or a drain hole in the floor.

  • A heater requires space

If your living area is quite limited, installing an indoor water heater could be challenging. Even though tankless water heaters use less area than regular tank ones, you must still designate a place for an indoor heater in your residence. 

When selecting a space for a heater, it is essential to remember that it must be able to accommodate not only the heater itself but also the necessary pipes, wiring, and ventilation requirements (in the case of gas heaters).

Here are the pros and cons of an outdoor tankless water heater:


Pros Of Outdoor Tankless Water Heater

Let’s look at why you should install an outdoor tankless heater – 

  • Installation is fast and cheap

If you decide to move from a tank-based system to a tankless one, you will be able to install your new unit much faster if you opt for an outdoor water heater. Furthermore, you will save money on installation fees.

  • Outdoor heaters have a long lifespan

If outdoor tankless heaters are given the correct safeguards against the elements, such as cold weather, wind, rain, and sunlight, they can endure as long as indoor models.

The enclosures of the water heater are aluminum and completely rustproof. Furthermore, all the pieces within the water heater endure the elements.

  • Installation is simple — even for gas heaters

Gas tankless heaters are perfect outdoors as there is no need to modify your house. Furthermore, due to the short venting, there will be no condensation with outdoor gas heaters.

Therefore, having a drainage system is unnecessary, which is advantageous if your house does not have an effective drainage system. This is significant because a malfunctioning drainage system is often the source of damage to the heat exchanger.

  • Finding a place to install the heater is easy

It is necessary to determine where to place the water heater. If the heater is to be put inside the house, it may require some rearrangements to the house’s interior. It is much easier to set up an outdoor heater if it comes with appropriate plumbing and electricity and can be place almost anywhere.

This is an excellent choice if you buy a few point-of-use electric heaters. Additionally, having them outside can be an effective way to save space.

Remember that installing an outdoor water heater near the equipment that needs warm water, for example, outside the restroom, is preferable. If you put the heater in a distant spot, the hot water will take a few moments to move through the pipe.

This implies that you will have to wait longer for the water to arrive and spend more money on energy bills to have the water hot when it reaches you.

Cons Of Outdoor Tankless Water Heater

There are quite a few downsides to outdoor tankless water heaters – 

  • Outdoor heaters are costly

Outdoor heaters are costlier than indoor water heaters. This is particularly applicable when they are built with additional insulation or are intended to withstand any weather conditions.

  • You may need to adhere to building codes

It may be challenging to install an outdoor tankless heater due to the requirement of adhering to construction regulations. In specific structures, there is even a prohibition on placing a water heater on the exterior.

  • There’s a risk of vandalism & theft

One more issue that may arise is the possibility of malicious destruction. This shouldn’t be a problem if you reside in a safe neighborhood or install the water heating system out of sights, such as in a secure backyard or higher up in your house.

It’s possible that somebody could damage your water heater, and you could face costly repairs or might have to purchase a new one before the expected life expectancy. Furthermore, criminals could take the entire unit or some costlier components.

Undoubtedly, putting in a surveillance camera will discourage destruction and pilfering. However, this will increase the expenses associated with having an outdoor heating system.

  • They require weatherproofing

One of the primary disadvantages of outdoor tankless water heaters is that they must be protected from freezing temperatures.

This can be done with a freeze protection system, typically operated by electricity, and might necessitate an additional power supply apart from the one used for the heater. 

This factor increases the cost of the heater. To put it differently, the funds you save on setting it up might be for weatherproofing expenses.

  • In a power outage, your heater could break

In cold climates, the potential for a power outage is always present. If you live in a place where such disruptions are frequent or last a long time due to natural disasters, having an outdoor heater could be dangerous. 

If the power fails, the protection against freezing may be lost, and the water heater would be at risk of severe damage.

Indoor Vs Outdoor Tankless Water Heater: My Favorites

Here are my favorites among indoor vs outdoor tankless water heater: 

7EcoSmart Indoor Tankless Water Heater

Check Price

Camplux 5L Portable Outdoor Tankless Water Heater

Check Price

FAQs (Frequently Asked Questions) On Indoor Vs Outdoor Tankless Water Heater

1. Which is better indoor vs outdoor tankless water heater?

Both indoor and outdoor water heaters are an improved selection compared to traditional heaters because of their high energy efficiency. If you can make a few adjustments to your home to fit the unit and live in a safe location, you should go for an outdoor model.

2. Can I put an indoor tankless water heater outside?

If you acquire a tankless water heater in harsh environmental conditions, you can install it outside. Selecting the proper model for indoor or outdoor use is crucial.

3. Why would you put a tankless water heater outside?

If you don’t have enough area to install a tankless water heater, putting it outside is an excellent idea to save up room. This is the most suitable choice for houses that are limited in terms of wall space.

4. Are outdoor tankless water heaters good?

If you’re looking to buy a tankless water heater, an outdoor version is a significant consideration. These heaters are space-saving, do not need venting, and installing them is simpler and cheaper.

Summary: Indoor Vs Outdoor Tankless Water Heater


Ultimately, your area’s climate should be the primary consideration when deciding between indoor vs outdoor tankless water heater.

Areas with chill and breezy conditions, where temperatures drop below 0 degrees Celsius in the winter, are ideal for indoor water heaters. However, if your region rarely experiences sub-zero temperatures, you can reap all the advantages of an outdoor tankless water heater.

In addition to climate, you should also consider other aspects, such as the spot where the heater will be installed, whether it is in a current house or one that is still being constructed, and the protection level of the area you live in.

I hope this article on indoor vs outdoor tankless water heater sounds helpful!

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