Condensing vs Non-Condensing Water Heaters — What's the Difference?

Two Technologies, One Goal

When shopping for a tankless water heater, you'll quickly come across two types: condensing and non-condensing. Both heat water on demand, but they do it differently — and the difference matters for your energy bill, installation, and long-term comfort.

How Non-Condensing Units Work

Non-condensing water heaters, like our NHW700-199AE, heat water using a single heat exchanger. The exhaust gases produced during combustion are vented outside at high temperatures (around 300–500°F). These units are typically more compact and easier to install, making them a great choice for outdoor installations or retrofits where venting is already in place.

How Condensing Units Work

Condensing water heaters, such as our NPE-180A2, NPE-210S2, and NPE-240A2, use a secondary heat exchanger to extract additional heat from the exhaust gases before they leave the unit. This process cools the gases to the point where water vapor condenses — hence the name. The result is significantly higher efficiency, often reaching 95%+ thermal efficiency.

Key Differences at a Glance

• Efficiency: Condensing units are more efficient (up to 95%+) vs. non-condensing (around 80-85%).
• Venting: Condensing units use PVC venting (cooler exhaust); non-condensing require stainless steel or special venting.
• Installation cost: Non-condensing units can be cheaper to install if existing venting is compatible.
• Operating cost: Condensing units save more on gas bills over time.
• Condensate: Condensing units produce a small amount of acidic condensate that must be drained properly.

Which One Is Right for You?

If you're building new or replacing an old unit and want maximum energy savings, a condensing model is the smart long-term investment. If you need an outdoor unit or are working with existing venting infrastructure, a non-condensing model may be the more practical choice. Browse our full range to find the perfect fit.