As a homeowner, learning the difference between indoor and outdoor tankless water heaters and knowing which one to install is important. To make this decision, it’s important to know the difference between the two types of units and which one is best suited to your needs.

Let’s dive into some of the key differences between indoor and outdoor tankless water heaters.

An indoor tankless water heater is typically used in areas with cold climates since they’re enclosed and can maintain the hot water temperature better in a harsher environment. On the other hand, an outdoor tankless water heater requires less space since it’s outside, but isn’t as efficient or reliable in colder weather conditions

Both have pros and cons, so let’s look at this in more detail to help you decide which one is best for your needs.

Indoor Tankless Water Heaters

An indoor tankless water heater is installed inside your home, typically near the point of use (i.e., under a kitchen sink). It takes up less space than a traditional hot water tank since there’s no large reservoir of water to store.

An indoor model is ideal for those who want their hot water on-demand without having to worry about extreme weather conditions outside.

On the other hand, an indoor tankless water heater is more expensive due to installation costs and higher operating temperatures required by code in most cases. Due to the higher operating temperatures, some indoor models require special venting that can be difficult and costly to install in some homes.

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Outdoor Tankless Water Heaters

An outdoor unit is installed outside the home and is designed to withstand the elements. These units are generally less expensive than indoor models since they don’t require special venting or additional insulation like an indoor model would need.

If you happen to live in a climate where temperatures drop below freezing, you must always be sure to take precautions to avoid freeze damage, such as draining the unit or installing a freeze-protection device. 

Outdoor tankless water heaters also tend to be louder than their indoor counterparts due to ventilation fans built into them that helps dissipate exhaust gases produced during operation. They also take up more space outside your home than an indoor unit would take up inside it.

In addition, with an outdoor model, you will need access to electricity outdoors in order for it works properly – something that isn’t always easy or cheap depending on where you live and how far away from your house you need power run from an electrical panel inside your home.

Other Factors to Consider

There are some other factors to consider when deciding between an indoor and outdoor tankless water heater. These include where it’s installed, ease of maintenance, regulations, and safety.

1. Installation Location

The most obvious difference between an indoor and outdoor tankless water heater is where they are installed. An indoor tankless water heater is installed inside your home, usually in a closet or utility room near a source of power.

An outdoor unit, on the other hand, is installed outside the home and is designed to withstand the elements.

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Of course, if you live in a climate where temperatures drop below freezing, you must always be sure to take precautions to avoid freeze damage, such as draining the unit before winter sets in.

2. Maintenance Needs

Another major difference between these two types of units has to do with their maintenance needs.

Seeing indoor water heaters are protected by the building they are in, maintenance is often restricted to occasional cleaning and standard check-ups for proper operation.

On the flip side, because an outdoor unit will be exposed to harsher weather conditions throughout the year, it will require more frequent maintenance than its indoor counterpart – this includes regular inspections for any signs of corrosion or damage from inclement weather.

3. Regulations

Local codes and regulations also play a role in deciding which type of heater you can install in your area – so be sure to check with your local authorities before making any final decisions.

4. Safety Considerations

And finally, when it comes to safety considerations, an outdoor tankless water heater can present a greater risk of fire or explosion due to its proximity to flammable materials outside the home.

Indoor units are generally considered safer since they are not located near any combustible materials and because they require a higher operating temperature, the risk of explosion is significantly lower.

Final Thoughts

When choosing between an indoor or outdoor tankless water heater for your home it’s important to weigh all of the pros and cons before making a decision – from cost and convenience factors to size considerations and ease of installation/maintenance requirements.

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Ultimately, each type has its own unique advantages and disadvantages so it’s important that you do research into what type would best fit your needs before investing in either option.

Whichever way you decide to go ultimately depends on what works best for your specific situation.

Just make sure that when making this decision you consider both short-term needs (cost) as well as long-term needs (efficiency). Those are key factors to take into account when deciding which type of tankless water heater is best for your home.

About the author

I started working as a quality control manager with the Water Authority of Nassau County in 2005. After a few years, I moved into Water Waste Prevention, where I currently work as the production supervisor. I love my job and the people I work with, but most of all I love spending time with my family.