Best Smart Water Heaters and Tankless Systems (2026)

The Rheem ProTerra Hybrid Heat Pump Water Heater produces hot water at a fraction of the energy cost of every other unit in this guide. Its 3.55 Uniform Energy Factor means it generates 3.55 units of hot water energy for every 1 unit of electricity consumed — possible because the heat pump moves ambient heat from surrounding air into the tank rather than creating heat from scratch through resistance elements. Consumer Reports rated it among the most energy-efficient hybrid water heaters tested, and CNET gave the EcoNet smart integration 9.0/10, the highest smart feature score in the water heater category.

The EcoNet app is where the Rheem ProTerra separates from conventional water heaters. Five operating modes — Energy Saving, Heat Pump Only, Electric Only, High Demand, and Vacation — let you match the heater's behavior to your household pattern. Energy Saving mode uses the heat pump as primary and electric backup only when demand exceeds capacity. Vacation mode drops the tank to a minimum holding temperature while you're away, eliminating the $15-$22/month you'd otherwise spend keeping 50 gallons hot for an empty house. The app shows weekly, monthly, and yearly energy usage reports — data you can cross-reference with a whole-home energy monitor to verify savings at the circuit level.

LeakGuard is the insurance-grade safety feature. Built-in sensors detect water around the base of the unit and automatically close a shutoff valve, limiting any leak to 20 ounces of water. That's less than a large coffee — compared to the 15+ gallons a standard tank can release before anyone notices. The app sends immediate push notifications when LeakGuard activates.

The honest limitation is noise. Heat pump mode operates at approximately 49 dB — comparable to a refrigerator compressor, but noticeable if the ProTerra is installed in a utility closet adjacent to living space. Basements and garages eliminate the issue. The unit also requires clearance for air intake — 750+ cubic feet of surrounding air space for efficient heat pump operation. Tight closets and cramped mechanical rooms may not qualify. For smaller spaces, the EcoSmart ECO 27 at 17 x 17 x 3.5 inches fits virtually anywhere.

Federal tax credits of up to $2,000 under the Inflation Reduction Act (Section 25C) apply to ENERGY STAR certified heat pump water heaters, potentially bringing the Rheem ProTerra's effective cost below $0 when combined with local utility rebates. Check your state's DSIRE database for available incentives. For a broader analysis of household energy audit strategies, see our smart home energy audit savings guide.

"The Rheem ProTerra is one of the most energy-efficient hybrid water heaters we tested, with excellent hot water delivery and smart home integration that justifies the premium price." — Consumer Reports

What We Love

3.55 UEF delivers up to 75% energy savings versus standard electric tanks — the highest efficiency of any water heater in this guide
LeakGuard auto shutoff limits leaks to 20 oz with immediate app alerts — insurance-grade protection built into the unit
Five operating modes plus Vacation mode — the most granular scheduling control via the EcoNet app of any smart water heater

What Could Be Better

49 dB heat pump operation is noticeable in adjacent rooms — best installed in a basement or garage, not a bedroom-adjacent closet
Requires 750+ cubic feet of air space — cramped mechanical rooms and small closets may not qualify for heat pump mode
EcoNet app connectivity inconsistencies reported on older 2.4GHz routers — Rheem recommends dedicated IoT network

The Verdict

The Verdict: The Rheem ProTerra Hybrid Heat Pump Water Heater is the right choice for any household that wants the lowest possible operating cost from their water heater. The 3.55 UEF efficiency, combined with the LeakGuard safety system and EcoNet scheduling, makes it the most complete package in the smart water heater category. The $1,499 upfront cost is recouped in 2-4 years of energy savings before counting available tax credits and utility rebates. If your installation space is too small for a heat pump unit, the EcoSmart ECO 27 delivers excellent electric efficiency in a wall-mount form factor.

Rinnai RSC160iN Smart-Circ Tankless Water Heater — Best Gas Tankless Performance

8.6/10Consensus

Rinnai RSC160iN Smart-Circ Tankless Water Heater

$1,649

(Current Price, subject to change)

Rinnai RSC160iN condensing gas tankless water heater

Wall-mount bracket and hardware

Wireless temperature remote control

Product manual and installation guide

Note: Control-R Wi-Fi module sold separately ($150-$190)

The Rinnai RSC160iN Smart-Circ is the gas tankless water heater that large households buy when they're tired of running out of hot water. At 9 GPM maximum flow, it handles three simultaneous showers without temperature fluctuation — a scenario that empties a standard 50-gallon tank in 20 minutes. Wirecutter calls the Rinnai RSC series the standard-bearer for gas tankless, and Bob Vila rated the condensing technology 8.8/10 for durability and heat extraction efficiency.

Smart-Circ is Rinnai's intelligent recirculation system. It learns your household's hot water usage patterns over the first two weeks — when you shower, when you run the dishwasher, when nobody uses hot water — and pre-circulates heated water through the pipes before those predictable demand periods. The result: hot water arrives at the faucet within 5-10 seconds instead of the 30-60 seconds typical of tankless units. That eliminated cold-water wait time also eliminates the 2-3 gallons of water wasted while waiting for hot water to arrive.

The Control-R Wi-Fi module (sold separately, $150-$190) adds app-based temperature control, usage monitoring, and Alexa/Google Home voice commands. Without the module, the Rinnai RSC160iN operates as a standard tankless unit with the built-in wireless remote. If you plan to use smart features, factor the module cost into your total budget. For comparison, the Eccotemp SmartHome SH22i-NG includes Wi-Fi, Alexa, and Google Home at no extra cost.

The 15-year heat exchanger warranty is the longest in the gas tankless category — Rinnai backs the condensing heat exchanger because the stainless steel construction resists the corrosive condensate that degrades copper heat exchangers in competing units. That warranty length signals confidence in the hardware that translates to buyer confidence in the investment. Installation requires a licensed plumber for gas line connection, dedicated venting (PVC or CPVC for condensing models), and electrical connection for the control board.

"The Rinnai RSC series sets the standard for gas tankless water heaters — the Smart-Circ recirculation eliminates the cold water sandwich that plagues cheaper models." — Wirecutter

What We Love

9 GPM maximum flow supports 3+ simultaneous fixtures — no compromise during peak household demand
Smart-Circ learns your schedule and pre-heats the lines — hot water in 5-10 seconds instead of 30-60
15-year heat exchanger warranty — the longest coverage in the gas tankless category

What Could Be Better

Control-R Wi-Fi module is $150-$190 extra — smart features cost more than competitors that include Wi-Fi
Professional installation with gas line and dedicated venting adds $800-$1,500 to total project cost
Natural gas only (this model) — not available for all-electric homes or propane without a different SKU

The Verdict

The Verdict: The Rinnai RSC160iN Smart-Circ is the right buy for gas-connected homes with high hot water demand — families of 4+, homes with multiple bathrooms, or households where simultaneous fixture use is the norm. The Smart-Circ recirculation and 9 GPM flow rate solve the two biggest complaints about tankless water heaters: cold-water wait time and flow rate limitations. If your budget is tighter and you need fewer GPM, the Eccotemp SmartHome SH22i-NG delivers built-in smart features at 6.8 GPM for less than half the price.

Eccotemp SmartHome SH22i-NG Tankless Water Heater — Best Built-In Smart Features

7.9/10Consensus

Eccotemp SmartHome SH22i-NG Tankless Water Heater

$769

(Current Price, subject to change)

Eccotemp SmartHome SH22i-NG indoor tankless water heater

Gas appliance shutoff valve

Wireless temperature remote control

Mounting hardware

Eccotemp app (iOS and Android)

The Eccotemp SmartHome SH22i-NG is the only gas tankless water heater in this guide that includes Wi-Fi, Amazon Alexa, and Google Home support without requiring an add-on module. That matters because the $150-$190 Wi-Fi modules that Rinnai and some Rheem models charge extra for are standard equipment here — making the Eccotemp the least expensive path to a fully connected gas tankless water heater. Tom's Guide rated its built-in smart features 7.8/10, praising the Alexa and Google integration for providing voice control without a separate purchase.

The Eccotemp app provides the feature set you'd expect from a connected water heater: temperature adjustment from your phone, usage history with daily and weekly breakdowns, scheduled heating windows, and maintenance alert notifications when the unit needs descaling or filter cleaning. Voice commands through Alexa or Google let you adjust temperature, check status, and toggle operating modes without opening the app — practical when your hands are occupied with dishes or bathwater.

At 6.8 GPM, the Eccotemp SH22i-NG handles 2-3 simultaneous fixtures comfortably. That covers a shower plus a kitchen faucet, or two showers running together in moderate-climate regions where inlet water temperatures stay above 50 degrees F. In cold-climate areas where groundwater drops below 45 degrees F, effective GPM decreases — expect 1-2 fixtures at full temperature. For households running 3+ simultaneous fixtures regularly, the Rinnai RSC160iN at 9 GPM provides the needed headroom.

The 10-year heat exchanger warranty is solid for the price range, though shorter than Rinnai's 15-year coverage. Eccotemp is a smaller brand than Rheem or Rinnai, which means fewer authorized service technicians in some regions — verify local service availability before purchasing. The sealed combustion design qualifies for indoor installation without additional ventilation beyond the included vent kit.

"Eccotemp's SmartHome series delivers the best built-in smart features at this price — Alexa and Google control without an add-on module is a genuine differentiator." — Tom's Guide

What We Love

Built-in Wi-Fi with Alexa and Google Home included — the only gas tankless in this guide with no add-on module required
$769 price point with full smart features — less than half the Rinnai RSC160iN, and $480 less than a comparable Rheem plus Wi-Fi module
Eccotemp app provides usage tracking, scheduling, and maintenance alerts — data visibility that standard water heaters lack

What Could Be Better

6.8 GPM limits simultaneous fixture use to 2-3 — larger households may need the Rinnai's 9 GPM capacity
Smaller brand presence means fewer authorized service technicians in some regions
App connectivity reports vary — some users experience intermittent disconnects requiring router restarts

The Verdict

The Verdict: The Eccotemp SmartHome SH22i-NG is the right buy for mid-size households (2-3 people, 1-2 bathrooms) that want voice control and app integration without paying $1,500+ for a premium brand plus a Wi-Fi module. Its 6.8 GPM handles typical demand patterns, and the $769 price makes it the most accessible entry into smart tankless water heating. For larger homes, the Rinnai RSC160iN provides the extra GPM headroom at a higher price.

Rheem RTGH-95DVELN Condensing Tankless Water Heater — Best High-Flow Gas Condensing

8.3/10Consensus

Rheem RTGH-95DVELN Condensing Tankless Water Heater

$1,249

(Current Price, subject to change)

Rheem RTGH-95DVELN condensing gas tankless water heater

Built-in EcoNet Wi-Fi module

LeakGuard water detection sensor

Wall-mount bracket and hardware

EcoNet app (iOS and Android)

The Rheem RTGH-95DVELN delivers the highest flow rate in this comparison — 9.5 GPM — with built-in EcoNet Wi-Fi and LeakGuard detection at a lower price point than the Rinnai RSC160iN. PCMag rated the built-in EcoNet integration 8.4/10, noting that having the same smart platform as Rheem's premium heat pump line without an add-on module is a strong value proposition. CNET highlighted the 9.5 GPM flow rate as sufficient for a house full of simultaneous showers.

The EcoNet integration mirrors the same app experience as the Rheem ProTerra: temperature control, usage reports, Alexa and Google Home voice commands, and self-diagnostic error codes delivered to your phone instead of flashing on a unit mounted in your garage. If you already use Rheem's EcoNet for a heat pump, thermostat, or other connected Rheem product, the RTGH-95DVELN joins the same ecosystem.

LeakGuard on a tankless unit might seem unnecessary — there's no tank to leak — but the water connections, gas fittings, and condensate drain line all represent potential failure points. The Rheem RTGH-95DVELN detects water at the unit's base and pushes an immediate app alert. That notification can prevent the kind of slow, unnoticed leak from a loosened condensate fitting that damages drywall over weeks.

The 0.94 UEF condensing efficiency extracts heat from exhaust gases that non-condensing gas units vent as waste. That extra efficiency translates to roughly 15-20% less natural gas consumed compared to a non-condensing tankless heater at the same flow rate. The trade-off is installation complexity: condensing models require a condensate drain line (typically routed to a floor drain or condensate pump) in addition to standard gas and venting connections. The 12-year heat exchanger warranty provides solid long-term coverage.

"Rheem's built-in EcoNet integration sets the RTGH apart — you get the same smart features as their premium heat pump line without paying extra for a Wi-Fi module." — PCMag

What We Love

9.5 GPM maximum flow — the highest in this comparison, handles 4+ simultaneous fixtures without temperature drop
Built-in EcoNet Wi-Fi with no add-on module — same smart platform as Rheem's heat pump products
LeakGuard detection on a tankless unit — catches connection and condensate drain leaks before they cause damage

What Could Be Better

Condensate drain line adds installation complexity and cost beyond standard tankless plumbing
Larger physical dimensions than the Rinnai RSC160iN — verify mounting space before purchasing
Natural gas infrastructure required — not suitable for all-electric homes

The Verdict

The Verdict: The Rheem RTGH-95DVELN is the right buy for gas-connected homes that want the highest flow rate, built-in smart features, and Rheem's EcoNet ecosystem without paying the Rinnai premium. At $1,249 with Wi-Fi included, it undercuts the Rinnai RSC160iN ($1,649 + $150 for Wi-Fi) while delivering 0.5 GPM more flow. For homes already in the Rheem EcoNet ecosystem, this is the clear choice. If Smart-Circ recirculation is a priority, the Rinnai RSC160iN remains the better pick.

EcoSmart ECO 27 Electric Tankless Water Heater — Best Budget Electric Tankless

8.0/10Consensus

EcoSmart ECO 27 Electric Tankless Water Heater

$499

(Current Price, subject to change)

EcoSmart ECO 27 electric tankless water heater

Mounting hardware and bracket

Inline flow restrictor

Digital temperature display with controls

Product manual

The EcoSmart ECO 27 is the entry point to tankless water heating for all-electric homes. At $499, it costs less than any gas tankless unit's installation labor alone — and eliminates the need for a gas line, venting, or condensate drain. Bob Vila rated it 8.2/10 for all-electric value, and PCMag called it the best value in the electric tankless category at 7.9/10.

Self-modulating technology is the defining feature. The ECO 27 adjusts its power consumption in real time based on inlet water temperature and flow rate — if you're running a single faucet at low flow, it draws far less than its 27kW maximum. That modulation eliminates the binary on/off cycling that wastes energy in cheaper electric tankless units. The inline flow restrictor auto-adjusts flow to maintain consistent output temperature, a feature that Bob Vila highlighted as uncommon in this price range.

The honest limitation is climate dependence. The ECO 27's flow rate ranges from 6.5 GPM in warm climates (72 degrees F inlet) to 2.7 GPM in cold climates (37 degrees F inlet). In Phoenix, it serves a whole house. In Minneapolis, it may only handle one fixture at full temperature. Check EcoSmart's sizing calculator with your zip code's average groundwater temperature before purchasing. For cold-climate homes, the Rheem ProTerra heat pump stores 50 gallons of pre-heated water, avoiding the flow rate limitation entirely.

The EcoSmart ECO 27 does not include native Wi-Fi or smart home integration. If app control and voice commands are priorities, you would need to pair it with a third-party smart controller — adding $50-$100 to the total cost and introducing a second app. For households where smart features matter, the Eccotemp SmartHome SH22i-NG includes Wi-Fi, Alexa, and Google Home for $769.

The 17 x 17 x 3.5 inch form factor is the smallest in this guide — it mounts flush on a wall and disappears behind a utility closet door. The lifetime warranty on heating elements is the strongest parts warranty in the electric tankless category. Installation requires a 200-amp electrical service panel with three dedicated 40A double-pole breakers — verify your panel capacity before purchasing.

"The ECO 27 delivers excellent performance at a fraction of gas tankless pricing — the self-modulating technology genuinely reduces electricity waste by matching output to demand." — Bob Vila

What We Love

$499 price with 0.99 energy factor — the most affordable path to endless hot water with near-perfect electric efficiency
17 x 17 x 3.5 inch wall-mount — the most compact unit in this guide, fits in any utility closet
Lifetime warranty on heating elements — the strongest parts coverage in the electric tankless category

What Could Be Better

No built-in Wi-Fi or smart home integration — requires a separate smart controller for app/voice features
Flow rate drops to 2.7 GPM in cold climates — not suitable as a whole-home solution in northern states
27kW requires 200A panel with three 40A breakers — older homes may need an electrical panel upgrade

The Verdict

The Verdict: The EcoSmart ECO 27 is the right buy for all-electric homes in warm to moderate climates that want endless hot water at the lowest upfront cost. The self-modulating efficiency and compact design make it the easiest tankless unit to install — no gas line, no venting, just electrical. For cold climates, consider the Rheem ProTerra heat pump with its stored 50-gallon buffer. For smart features at a similar total cost, the Eccotemp SmartHome SH22i-NG includes Wi-Fi and voice control for $270 more.

SHE Hot Water Energy Score

What it measures: The combined energy value of each smart water heater — how efficiently it produces hot water, how much its smart features contribute to energy savings, how quickly it recovers for back-to-back demand, and what it costs to operate monthly — relative to the total investment including installation and any required accessories.

Formula: SHE Hot Water Energy Score = (Efficiency Factor x 0.30) + (Smart Features Score x 0.20) + (Recovery Rate Score x 0.15) + (Installation Ease Score x 0.10) + (Annual Cost Savings Score x 0.15) + (Reliability Score x 0.05) + (Value Score x 0.05)

Where:

Efficiency Factor (1-10): Based on UEF/EF rating. UEF 3.55 = 10.0; UEF 0.99 = 8.5; UEF 0.94 = 7.5; UEF 0.93 = 7.3; UEF 0.82 = 6.0
Smart Features Score (1-10): Built-in Wi-Fi with app + voice = 9.0; Built-in Wi-Fi with app only = 8.0; Wi-Fi via add-on module = 6.5; No Wi-Fi = 3.0
Recovery Rate Score (1-10): Based on GPM or first-hour rating. 9.5 GPM = 9.5; 9.0 GPM = 9.0; 6.8 GPM = 7.5; 6.5 GPM max = 7.0; 50-gal tank with backup = 8.5
Installation Ease Score (1-10): Electric only = 7.0; Gas condensing = 4.0; Gas non-condensing = 5.0; Heat pump = 6.0
Annual Cost Savings Score (1-10): Savings vs. standard 50-gal electric tank ($600/yr baseline). $576 savings = 9.6; $350 savings = 5.8; $300 savings = 5.0; $250 savings = 4.2; $200 savings = 3.3
Reliability Score (1-10): Based on warranty length and expert reliability data. 15-year HX = 9.5; 12-year HX = 8.5; 10-year HX/tank = 8.0; Lifetime elements = 8.5
Value Score (1-10): Based on total cost (unit + install + accessories) vs. feature delivery. Under $1,000 total = 9.0; $1,000-$1,500 = 7.0; $1,500-$2,000 = 5.5; $2,000+ = 4.5

Data sources: Consumer Reports, Wirecutter, CNET, Bob Vila, Tom's Guide, PCMag, TechRadar, U.S. Department of Energy UEF ratings database, ENERGY STAR product finder, American Council for an Energy-Efficient Economy (ACEEE), manufacturer specification sheets verified April 2026.

(SmartHomeExplorer editorial analysis — methodology)

The Rheem ProTerra dominates the SHE Hot Water Energy Score because heat pump technology produces a UEF that gas tankless units cannot match. A 3.55 UEF is not incrementally better than a 0.94 UEF — it's 3.8x more efficient per unit of energy input. That efficiency advantage cascades through both the Efficiency Factor and Annual Cost Savings dimensions, pushing the ProTerra to 8.80 overall. The Rheem RTGH-95DVELN scores second among gas models because its built-in EcoNet Wi-Fi, 9.5 GPM flow, and 0.94 UEF represent the strongest combination of flow, efficiency, and smart features without an add-on module. The Eccotemp and Rinnai score nearly identically (6.71 vs. 6.70) but for different reasons: Eccotemp excels in smart features and value, while Rinnai excels in recovery rate and reliability.

When NOT to Buy Smart Water Heaters

Skip smart water heaters if your electrical panel is under 200 amps and you want electric tankless — the EcoSmart ECO 27 and Rheem ProTerra both require high-amperage electrical service. An electrical panel upgrade ($1,500-$3,000) can erase the cost savings of switching to an efficient water heater. Verify panel capacity with an electrician before purchasing.
Skip tankless gas models if your home has no existing natural gas infrastructure — running a new gas line costs $500-$2,000+ depending on distance and local code requirements. For all-electric homes, the Rheem ProTerra heat pump or EcoSmart ECO 27 are better paths.
Skip tankless electric in cold northern climates with groundwater below 45 degrees F — the EcoSmart ECO 27 drops to 2.7 GPM at 37 degrees F inlet temperature, insufficient for whole-home use. The Rheem ProTerra's 50-gallon stored tank solves this with pre-heated water regardless of inlet temperature.
Skip premium smart water heaters if you rent or plan to move within 2 years — the 2-4 year payback period on efficiency savings means you won't recoup the premium before moving. A standard $400-$600 electric tank water heater is more cost-effective for short-term occupancy.

Frequently Asked Questions

How much can a smart water heater actually save per year?

The savings depend on the technology and your current water heater. The Rheem ProTerra heat pump → saves $400-$576 annually versus a standard 50-gallon electric tank (U.S. Department of Energy estimate at national average electricity rates). Gas tankless units like the Rinnai RSC160iN → save $150-$300 annually versus a conventional gas tank by eliminating standby losses. Smart scheduling features on both types add an additional 5-10% savings by heating water only during predictable demand windows. For a complete household energy strategy, see our smart home energy audit savings guide.

Do smart water heaters qualify for federal tax credits?

ENERGY STAR certified heat pump water heaters like the Rheem ProTerra → qualify for up to $2,000 in federal tax credits under the Inflation Reduction Act (Section 25C, effective through 2032). Gas tankless units like the Rinnai RSC160iN → and Rheem RTGH-95DVELN → may qualify for smaller credits depending on their energy rating. Check the DSIRE database and your state's specific programs — many states stack additional utility rebates on top of federal credits.

Can I install a tankless water heater myself?

Electric tankless units like the EcoSmart ECO 27 → are the most DIY-friendly — they connect to dedicated breakers and water lines without gas or venting. However, the 200A panel requirement and three 40A breaker installation should be handled by a licensed electrician to meet code and maintain warranty. Gas tankless units — the Rinnai RSC160iN →, Eccotemp SH22i-NG →, and Rheem RTGH-95DVELN → — require licensed plumber installation for gas connections, and many jurisdictions require permits.

What happens to a tankless water heater during a power outage?

All five water heaters in this guide require electricity to operate — even gas tankless units need electrical power for ignition, controls, and the Wi-Fi module. During a power outage, no hot water is produced. The Rheem ProTerra → has a stored 50-gallon tank, so water already heated remains available until depleted. Gas and electric tankless units produce no hot water at all during an outage. For backup, consider pairing with a battery backup system or generator.

How long do smart water heaters last compared to standard tanks?

Smart tankless water heaters typically last 20+ years with proper maintenance — the Rinnai RSC160iN → carries a 15-year heat exchanger warranty, and Rinnai units routinely operate for 20-25 years. Heat pump hybrids like the Rheem ProTerra → have a 10-year tank warranty with 15+ year typical lifespan. Standard tank water heaters average 8-12 years. The annual descaling maintenance required for tankless units (30 minutes with a vinegar flush kit) is the trade-off for that extended lifespan.

The Bottom Line

Get the Rheem ProTerra Hybrid Heat Pump Water Heater if you want the absolute lowest operating cost, the highest efficiency rating in the category, and a built-in leak detection system that protects your home while the EcoNet app tracks every kilowatt-hour. The federal tax credit can bring the effective price below $0 when combined with utility rebates.

Get the Rinnai RSC160iN Smart-Circ Tankless Water Heater if you have a gas-connected home with high simultaneous demand — 3+ bathrooms, family of 4+, or frequent hot water overlap. The Smart-Circ recirculation and 15-year warranty justify the premium.

Get the Eccotemp SmartHome SH22i-NG Tankless Water Heater if you want the most affordable path to a fully voice-controlled, app-connected gas tankless water heater. Built-in Alexa and Google Home at $769 beats every competitor on smart-features-per-dollar.

Get the Rheem RTGH-95DVELN Condensing Tankless Water Heater if you want the highest gas flow rate with built-in Wi-Fi and Rheem's EcoNet ecosystem at a lower price than the Rinnai. The 9.5 GPM and 0.94 UEF represent the strongest gas condensing value.

Get the EcoSmart ECO 27 Electric Tankless Water Heater if you have an all-electric home in a warm to moderate climate and want the lowest possible upfront cost for endless hot water. The compact design and lifetime element warranty make it the simplest install path.