Tankless Water Heaters in Milpitas, CA

How does a tankless water heater work?

It heats water as it flows through the unit, instead of keeping a tank of water hot all day. When you open a hot water tap, a sensor sees the water moving and fires a gas burner. The burner heats a heat exchanger (a coil of pipe the water runs through), and hot water comes out a few seconds later. When you close the tap, the burner shuts off.

Because there is no tank to empty, a properly sized tankless unit keeps making hot water as long as you need it. The trade-off is that it can only heat so many gallons per minute, so we size it for how many showers, sinks and appliances your household runs at the same time.

What is the difference between an 80% and a high-efficiency tankless water heater?

The difference is how much of the gas’s heat ends up in your water. A standard tankless water heater, often called an “80%” or non-condensing unit, turns roughly 80% of its gas into hot water. The rest leaves through the vent as very hot exhaust. A high-efficiency condensing unit adds a second heat exchanger that pulls extra heat out of that exhaust before it leaves, so it reaches about 95%.

Efficiency is shown on the unit’s yellow label as its UEF (Uniform Energy Factor). A UEF of 0.80 means about 80% efficient, and 0.95 means about 95%. As of November 2026, ENERGY STAR certifies gas tankless water heaters with a UEF of 0.95 or higher and a flow of at least 2.8 gallons per minute over a 67°F temperature rise. In practice, that means condensing models.

Feature	Standard (80%, non-condensing)	High-efficiency (about 95%, condensing)
Share of gas turned into hot water	About 80%	About 95%
Heat exchangers	One	Two: the second one captures heat from the exhaust
Venting	Exhaust is very hot, so it needs a special metal vent	Exhaust is cool enough for PVC plastic pipe, which is often easier to route
Condensate drain	Not needed	Needed: the unit makes slightly acidic water that runs to a drain, usually through a neutralizer
ENERGY STAR	No	Yes, at a UEF of 0.95 or higher
Gas use for the same hot water	Higher	Lower
Good fit when	Replacing an existing 80% unit with the same venting already in place	Installing new, or when a drain and a PVC vent route are easy to add

Both types heat water the same way you’d notice at the tap. The high-efficiency unit simply wastes less gas doing it. We’ll look at where your unit can vent and drain, then explain which one makes sense for your home.

Is a tankless water heater right for my home?

It’s often a good fit if one or more of these is true:

• Your household runs out of hot water with a tank.
• You want to free up floor space in a garage or closet. Most tankless units mount on a wall.
• You want a unit that only burns gas when someone is using hot water.
• Your gas line and venting can support the unit, or can be upgraded.

A tank or a heat pump water heater may be the better choice if your gas line is small and a larger one isn’t practical, or if you’d rather go all-electric. Our water heater replacement page compares all three.

What does a tankless installation involve?

1. Check your home. We look at your hot water use, the gas line size, the vent route, where a condensate drain can go, and a nearby outlet for the unit’s controls.
2. Size the unit. We match the unit’s flow (gallons per minute) to the fixtures you use at the same time.
3. Written estimate. You get a free, clear quote for the unit and any gas line, vent or drain work.
4. Permit and installation. We pull the permit, remove the old water heater, mount the new unit, and connect the gas, water, venting and drain.
5. Test and walk-through. We check for gas and water leaks, confirm the venting works safely, and show you the settings and how to keep it running well.

Do tankless water heaters need maintenance?

Yes. Plan on a descale once a year. Our tankless maintenance visit is $150, with 15% off for Comfort Club members. Minerals in Bay Area water build up as scale inside the heat exchanger, which can lower hot water flow and trigger error codes. A yearly water heater maintenance visit flushes the scale, cleans the inlet filter and checks the venting and condensate drain. If you have a gas water heater, test your carbon monoxide detectors twice a year. Never ignore a gas smell: leave the home and call PG&E or 911.

Do Bay Area air rules affect gas tankless water heaters?

Not anything you have now. A working water heater does not have to be replaced. As of November 2026, the Bay Area Air District’s building appliance rules page lists a zero-NOx standard for new water heaters between 75,000 and 2 million BTU/hr starting January 1, 2031, and says this includes tankless water heaters. NOx is a type of air pollution from burning gas. Whole-home gas tankless units are usually rated in that range. The standard applies to new units made after that date, not to water heaters already in homes. We’ll tell you what’s current when you’re ready to choose.

“I highly recommend Upgrade Home Services. Victor is fair, knowledgable, affordable, and provides very professional customer support.”

Dawn S., Google review

Why choose Upgrade Home Services for a tankless water heater?

Upgrade Home Services is a family-owned company based at 743 Ames Ave in Milpitas, licensed by the California Contractors State License Board (CSLB #1066776) and serving homeowners since 2002. We install, repair and maintain tankless, tank and heat pump water heaters, and we handle the permit for you. We serve 22 cities in Santa Clara, San Mateo and southern Alameda counties, including Milpitas, San Jose, Santa Clara, Fremont and Sunnyvale. Estimates on new and replacement water heaters are free.