Condensing tankless units extract extra heat from exhaust for higher efficiency, while non-condensing units are simpler but need different venting.
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Quick answer
A condensing tankless water heater extracts additional heat from its exhaust gases before venting them, using a secondary heat exchanger that cools the exhaust enough to condense water vapour out of it, which generally results in higher overall efficiency and allows for smaller-diameter, often plastic venting. A non-condensing tankless unit vents exhaust at a higher temperature without that secondary heat recovery step, which is a simpler design but requires venting material rated for that higher exhaust temperature, typically stainless steel rather than plastic. The better fit for a specific home depends on available venting routes, the household's hot water demand, and whether the home's existing infrastructure favours one venting approach over the other, which a licensed technician can assess directly.
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A condensing tankless unit uses a second heat exchanger stage to pull additional usable heat out of the exhaust gases before they leave the unit, cooling those gases enough that water vapour within them condenses into liquid, which is then drained away through a dedicated condensate line. This extra heat recovery step is what gives condensing units their generally higher efficiency compared to non-condensing designs, since less usable heat is lost up the vent.
A non-condensing tankless unit skips this secondary heat recovery stage, venting exhaust gases at a meaningfully higher temperature. This is a simpler mechanical design with one fewer component to maintain, but it requires venting material capable of safely handling that higher exhaust temperature, which generally means stainless steel venting rather than the PVC or polypropylene venting commonly used with condensing units.
| Factor | Condensing tankless | Non-condensing tankless |
|---|---|---|
| General efficiency | Higher, due to secondary heat recovery | Lower, exhaust carries more unused heat |
| Venting material | Typically PVC or polypropylene | Typically stainless steel |
| Condensate drainage | Required | Not applicable |
| Mechanical complexity | More components, including condensate handling | Simpler design |
| Typical venting cost | Often lower material cost | Often higher material cost due to stainless steel |
In many Metro Vancouver homes, especially retrofits into older character homes without existing appropriate venting, the availability and cost of a suitable vent path plays a large role in which type ends up being the practical choice, sometimes even more than the efficiency difference itself. A condensing unit's typically lower-cost plastic venting can make a longer run to a suitable exterior wall more affordable, while a non-condensing unit's stainless steel venting, though more expensive per length, might be the better fit if a very short, straightforward run is available and simplicity is preferred.
Homes needing to route venting a longer distance to reach a suitable exterior wall, common in some basement mechanical room layouts, often lean toward condensing units partly for this practical venting cost reason, separate from the efficiency question entirely.
A condensing unit's condensate, the water byproduct of the secondary heat recovery process, is mildly acidic and needs a proper drain connection, and in some installations a neutralization step, before being discharged. This is a standard, well-understood part of a condensing tankless installation for a licensed technician, but it does mean the installation location needs a suitable, code-compliant drain nearby, which is worth confirming during planning rather than assuming any mechanical room location will automatically work.
Safety note
Tankless water heater installation, including venting and condensate drainage, must be performed by a Technical Safety BC licensed gas fitter to ensure combustion gases and condensate are safely managed. If a gas smell is ever present, leave the home immediately and call FortisBC at 1-800-663-9911.
It generally has a higher efficiency design due to the secondary heat recovery stage, though actual real-world savings also depend on usage patterns and correct installation, which a licensed technician can speak to for a specific home.
Not generally; condensing units typically use different venting material rated for cooler, condensing exhaust, so a licensed technician needs to assess whether existing venting is compatible or needs to be replaced.
No, non-condensing units don't produce condensate the way condensing units do, so they don't require a dedicated condensate drain connection.
It depends on the specific venting route and drain access available; condensing units often use less costly venting material, but installed cost overall is best confirmed with a licensed technician's assessment of your home.
They have an additional condensate handling component to maintain, but overall periodic maintenance, including descaling, is a factor for both types depending on local water conditions.
Yes, available vent path and, for condensing units, drain access, are often the deciding practical factors in where a tankless unit can realistically be located within the home.
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