Water heating is one of the biggest energy costs in most homes, and a tankless heater already saves by skipping standby losses. The most energy efficient models go further: condensing gas units capture heat from their own exhaust, and self-modulating electric units draw only the power each shower needs. These four score highest on efficiency.
We compared UEF ratings, condensing design, modulation and smart features that cut waste, using manufacturer specifications and owner feedback. For scored reviews see tankless water heater energy efficient reviews, or see the best affordable tankless water heater guide for low running costs; our Editorial Policy explains our process.
Top 3 Most Energy Efficient Tankless Water Heaters
Rheem RTGH-84DVLN 8.4 GPM Condensing Natural Gas Tankless (Indoor)
- UEF 0.93
- 8.4 GPM
- Condensing
Rinnai RSC199iP Smart-Circ Condensing Propane Tankless (Indoor)
- Smart-Circ
- 11 GPM
- Condensing
EcoSmart ECO 36 36kW 240V Electric Tankless Water Heater
- 99.8%
- 36kW
- Self-modulating
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Energy Efficient Tankless Water Heaters Compared
| # | Product | Key Features | |
|---|---|---|---|
| 1 |  Rheem RTGH-84DVLN 8.4 GPM Condensing Natural Gas Tankless (Indoor) |
| Check Latest Price |
| 2 |  Rinnai RSC199iP Smart-Circ Condensing Propane Tankless (Indoor) |
| Check Latest Price |
| 3 |  Noritz NRC71DVNG 7.1 GPM Indoor Condensing Direct Vent Tankless |
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| 4 |  EcoSmart ECO 36 36kW 240V Electric Tankless Water Heater |
| Check Latest Price |
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1. Rheem RTGH-84DVLN 8.4 GPM Condensing Natural Gas Tankless (Indoor)
Best Overall
- Condensing with 0.93 UEF
- 8.4 GPM at a 35°F rise
- Hot Start programming
- Ultra-low NOx, direct vent
- Condensate drain needed
- Natural gas version
- Fuel: natural gas
- Flow: 8.4 GPM
- BTU: 157,000
Rheem’s RTGH 8.4 balances high efficiency with enough flow for 3–4 showers.
A UEF of 0.93 means far less wasted gas than older units.
Who the Rheem RTGH 8.4 GPM fits best
Natural gas homes.
Who should skip the Rheem RTGH 8.4 GPM
Propane homes.
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2. Rinnai RSC199iP Smart-Circ Condensing Propane Tankless (Indoor)
Best With Smart Recirculation
- Super High Efficiency Plus condensing design
- Up to 11 GPM
- Smart-Circ learns your schedule and runs the pump only when needed
- Propane, indoor install
- Higher price tier
- Propane version
- Fuel: propane
- Flow: up to 11 GPM
- Model: RSC199iP
Rinnai’s Smart-Circ avoids running recirculation all day, which saves both water and gas.
It is ideal for larger propane homes.
Who the Rinnai RSC199iP fits best
Large propane homes.
Who should skip the Rinnai RSC199iP
Small homes.
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3. Noritz NRC71DVNG 7.1 GPM Indoor Condensing Direct Vent Tankless
Best Compact Condensing
- Indoor condensing direct vent
- Up to 7.1 GPM
- Very high efficiency, low NOx
- Compact design
- Limited listing detail
- Natural gas only
- Fuel: natural gas
- Flow: up to 7.1 GPM
- Model: NRC711-DV-NG
Noritz’s NRC71 is a compact condensing heater for 2–3 bath homes.
It vents through a direct vent system.
Who the Noritz NRC71DVNG fits best
Mid-size natural gas homes.
Who should skip the Noritz NRC71DVNG
Propane homes.
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4. EcoSmart ECO 36 36kW 240V Electric Tankless Water Heater
Best Electric
- 99.8% energy efficient (per maker)
- Self-modulating, digital temperature control
- 36kW, up to 6 GPM
- Made in the USA (per listing)
- Needs four 40A breakers and 150A service
- Electricity rates vary
- Power: 36kW, 240V
- Model: ECO 36
- Fittings: 3/4″ NPT
EcoSmart’s ECO 36 converts nearly all power to heat and draws only what each tap needs.
Pair it with solar or low off-peak rates for the lowest bills.
Who the EcoSmart ECO 36 fits best
All-electric homes.
Who should skip the EcoSmart ECO 36
Homes with limited service.
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How to Maximize Tankless Efficiency
| Tip | Why |
|---|---|
| Choose condensing gas | Captures exhaust heat for higher UEF |
| Use smart recirculation | Avoids running a pump all day |
| Lower the set point | Less energy per gallon |
| Flush yearly | Scale cuts efficiency |
Frequently Asked Questions
What is the most energy efficient tankless water heater?
The Rheem RTGH 8.4 GPM with a 0.93 UEF.
Is electric more efficient than gas?
Electric converts nearly all power to heat, but running costs depend on rates.
What does UEF mean?
Uniform Energy Factor; higher is more efficient.
Do condensing units cost more to install?
They need a condensate drain but often use plastic venting.
Final Verdict: Best Tankless Water Heater Energy Efficient
The Rheem RTGH 8.4 GPM is the most energy efficient tankless water heater overall. The Rinnai RSC199iP is best with smart recirculation, and the EcoSmart ECO 36 is the best electric option.
Overall: Rheem RTGH-84DVLN 8.4 GPM Condensing Natural Gas Tankless (Indoor) Check Latest Price
Smart recirculation: Rinnai RSC199iP Smart-Circ Condensing Propane Tankless (Indoor) Check Latest Price
Electric: EcoSmart ECO 36 36kW 240V Electric Tankless Water Heater Check Latest Price
Higher efficiency means lower bills for years.
Looking for something else? Browse all of our Water Heaters guides and the wider Heating & Cooling section.
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