You bought a tankless water heater because you were tired of running out of hot water mid-shower. But now you are staring at two options — condensing and non-condensing — and the sales copy makes both sound great. One claims higher efficiency. The other claims lower upfront cost. Which one actually works for your home?
This article walks you through how each type operates, what the efficiency numbers really mean, and where each one falls short. By the end, you will know exactly which technology suits your climate, your installation constraints, and your budget. No fluff, no recycled marketing speak.
Rinnai
Rinnai RE160eP Non-Condensing Propane Tankless Water Heater | 6.1 GPM, 160k BTU, Endless Hot Water and Conserves Energy, Compact Design to Save Space, Outdoor Installation
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Related Product: If you live in a warmer climate or already have a 4-inch vent in place, the Rinnai RE160eP Non-Condensing Propane Tankless Water Heater is a solid pick. It delivers 6.1 GPM, fits five fixtures at once, and comes with Rinnai‘s 15-year heat exchanger warranty. The non-condensing design keeps the install simple — no condensate drain needed. Just make sure your region’s groundwater temperature matches its capacity; check Rinnai’s map before buying.
How Each Type Actually Works (and Why It Matters)
Both condensing and non-condensing tankless heaters burn gas to heat water on demand. The difference is what happens to the exhaust gases.
A non-condensing unit sucks in cold air, burns the gas, and sends the hot exhaust straight out the vent. The heat exchanger grabs some of that heat, but a lot escapes with the fumes. That‘s why efficiency hovers around 80-85%.
A condensing unit, by contrast, pulls the exhaust through a secondary heat exchanger. The hot gases cool down so much that water vapor in the exhaust condenses into liquid. That liquid — acidic — drips out through a drain. The extra heat captured pushes efficiency to 95% or higher.
So condensing units waste less gas. But they also cost more upfront, need a condensate drain, and require venting that won’t corrode from the acidic liquid.
Efficiency Numbers: What You Really Save
The Energy Factor (EF) or Uniform Energy Factor (UEF) rating tells you how much of the fuel‘s energy becomes hot water. Condensing units typical UEF: 0.94 to 0.98. Non-condensing: 0.82 to 0.88.
Let’s run a real example. Suppose your household uses 200 gallons of hot water per day. With a non-condensing unit at 83% efficiency, you burn about 1.2 therms of gas daily. At $1.20 per therm, that’s $1.44 per day — roughly $525 a year.
Switch to a condensing unit at 95% efficiency. Same usage: 1.05 therms, $1.26 per day, about $460 a year. That’s $65 saved annually.
But here‘s the catch. A condensing unit costs $300 to $600 more than a comparable non-condensing model. Installation can add another $200–$500 if you need a condensate drain or stainless steel venting. At $65 per year savings, the payback period is 8 to 15 years — right around the heater’s expected lifespan.
Your actual savings depend on local gas prices, groundwater temperature, and how much hot water you use. Warm climates or families that use little hot water may never recoup the extra cost.
Installation and Venting: The Real Dealbreaker
Non-condensing units use Category III venting — typically 4-inch stainless steel or PVC that can handle exhaust temperatures up to 400°F. You can vent through the wall or an existing masonry chimney, as long as the chimney is lined. No condensate drain required. That means a straightforward swap if you‘re replacing an old tankless or a standard water heater.
Condensing units produce exhaust around 130°F. That’s cool enough for Schedule 40 PVC or CPVC pipe. But the vent must be sealed to prevent acidic water from leaking. And you absolutely need a condensate drain nearby — either a floor drain, a sink drain, or a condensate pump that sends the liquid outside.
If your home has no drain in the utility room, installing a condensate pump adds cost and a point of failure. The pump can clog with sediment over time.
The Rinnai RE160eP (non-condensing) uses standard 4-inch venting and needs no drain. That’s a big deal for retrofits. In a new build with a basement floor drain, a condensing unit is easy. For a closet on the second floor, good luck.
Comparing Both Side by Side
| Feature | Non-Condensing | Condensing |
|---|---|---|
| Efficiency (UEF) | 0.82 – 0.88 | 0.94 – 0.98 |
| Upfront cost (unit) | $600 – $1,200 | $1,000 – $1,800 |
| Venting material | Stainless steel or PVC (4 inch) | PVC, CPVC, or polypropylene |
| Condensate drain needed? | No | Yes — floor drain or pump |
| Vent exit temperature | ~350°F | ~130°F |
| Annual gas cost (200 gal/day) | ~$525 | ~$460 |
| Ideal climate | Mild to warm (groundwater > 60°F) | Cold climates (better heat recovery) |
| Payback period | Immediate (lower up-front) | 8–15 years |
Five Real Questions People Ask
Can I vent a non-condensing heater through an existing chimney?
Yes, if the chimney has a stainless steel liner rated for Category III flue gases. The high exhaust temperature can degrade unlined masonry over time. Have a professional inspect it first.
Will a condensing heater freeze in an unheated garage?
The unit itself has freeze protection that circulates warm water when temps drop near freezing. But the condensate drain line can freeze if it runs outside without insulation. Keep that drain inside or heat-tape it.
Do condensing tankless water heaters need annual maintenance?
Yes, more than non-condensing. The secondary heat exchanger collects calcium and silt from the condensate. Manufacturers recommend flushing it with vinegar or descaling solution every 12 months. Skip it and efficiency drops fast.
Which type lasts longer?
Both typically last 15–20 years with proper maintenance. Condensing units have more parts (condensate pump, neutralizer kit, extra heat exchanger) that can fail. Non-condensing units are simpler, so fewer things to break.
Can I install a non-condensing heater outdoors?
Yes. Many non-condensing models, including the Rinnai RE160eP, are rated for outdoor installation. Check the manufacturer‘s spec; some need a cover if exposed to heavy rain. Condensing units are rarely rated for outdoor use because the condensate line would freeze in cold weather.
What You Should Do Right Now
- Check your local groundwater temperature and your household’s peak hot water demand. Use a manufacturer‘s sizing calculator — do not guess.
- Walk your installation site. Is there a floor drain within 6 feet? If no, a non-condensing model avoids pump headaches.
- Compare total installed cost: unit price + vent materials + labor + any condensate pump. Non-condensing wins for tight budgets.
- If you live in a cold region and use a lot of hot water, condensing makes sense long-term. But run the payback math with your local gas rates.
- Stick with a trusted brand. Rinnai, Rheem, and Noritz all have solid track records. Buy from a dealer that stocks replacement parts.
- Never oversize. A unit that’s too big short-cycles, wastes gas, and wears out faster. Match flow rate to your fixtures, not your dreams.
- Hire a licensed installer who has done tankless before. This is not a DIY project unless you are a pro. One venting mistake can leak carbon monoxide.
