Can Water Heaters Be Installed Outside: What You Should Know

tankless water heater

Let’s face it, tank water heaters take up a lot of space inside a house. They are big and bulky and can cause damage if a leak were to occur. Homeowners are always looking for the best way to hide a water heater, even if that means installing it outside.

One of the questions we get asked is, Can a water heater be installed outside? Yes, a water heater can be installed outside in certain instances. Electric and gas tank-style water heaters are not designed to be installed outside without shelter. On the other hand, gas tankless water heaters have exterior models that can be installed outside. Electric tankless water heaters can also be installed outside with some sheltering recommended to protect the unit from the weather.

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To expand on this, whether a water heater can be installed outside depends on two main factors; your climate and type of water heater. We will look at both gas and electric tankless and tank-style water heaters

Where should a tankless water heater be installed

Tankless Gas Water Heaters

New gas tankless model water heaters come in both exterior and interior models. The units are specific to each installation, so you need to know which installation method you are using prior to purchase. In other words, and interior tankless can’t be installed outside and vice versa.

You can tell the difference between the two based on how the unit is vented. The tankless outdoor units have built-in venting located in the front of the unit. The tankless indoor models have a vent flue attachment at the top of the water heater.

Outdoor models are designed to be installed outside on the side of your house. These water heaters do not need to be vented because the unit is already installed outside. The vents are located on the front of the water heater near the top of the unit.

Indoor tankless water heater models have to be installed inside. They are not constructed to withstand the exterior elements. They are usually installed inside a garage and have to be vented to the exterior, usually through the exterior wall. 

However, tankless water heaters can be installed indoors along an exterior wall, such as inside a basement or other interior room or inside an attic. While these methods are not common, it is an option. These methods typically include the tankless water heater being installed in conjunction with a recirculation system and water heater storage tank.

Insider’s Tip: Keep in mind, when installing an outdoor tankless water heater the unit should not be installed within four feet below or to the side, and one foot above, any door or operable window that can be opened. This is to prevent carbon monoxide from entering into the living space.

Tankless Electric Water Heaters

Tankless electric water heaters are growing in popularity, particularly in small spaces such as small houses, apartments, condos, and RVs. Other uses include outdoor spaces such as pool houses and outdoor showers.

Electric tankless water heaters can be installed as a whole-house option however, you need to read the specifications carefully because these units do have their limitations and can cost a lot of money to operate if a big demand is placed on the unit.

However, these units have proved to be ideal for small spaces, for example where only one bathroom and a kitchen are present. I would not recommend them for a family of more than 2 as a whole-house option.

Electric tankless water heaters can be installed outside but some form of shelter is recommended to protect the unit from the elements. Ideal applications include outdoor kitchens, pool houses, and outdoor showers.

Are you shopping for a tankless water heater? Our Buyers Guide: What Tankless Water Heater Do I Need? can help you answer questions about tankless water heaters.

Can a tank water heater be installed outside

Electric and gas tank water heaters are not designed to be installed outside without shelter. These water heaters are generally installed inside the garage, storage area, attic, or indoors. Some exceptions do apply. 

If you live in a warm climate that doesn’t have harsh winters you can install an electric or gas tank water heater outside provided it is inside some type of weatherproof shelter or a steel water heater enclosure.

Steel enclosures are not designed for all tank water heaters though. The diameter of the water heater cannot exceed 30 inches, which will eliminate some models such as lowboy models. Typically these enclosures will fit up to an 80-gallon water heater max.

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I don’t usually recommend steel enclosures because they are not constructed with a back to the enclosure and are generally not sealed of insulated well. The steel enclosure doesn’t have a back because it is designed to sit up against the house. These enclosures are also prone to leaks from rainfall which can cause the exterior of the tank to rust. 

If you intend to install a water heater outside inside a steel enclosure, it is recommended that you do not install the water heater directly on the ground. You can construct a raised wooden platform or you can purchase a steel raised water heater platform.

This is recommended so that water does not collect in the bottom of the enclosure and rust out the tank. Also if using a gas water heater you don’t want water collecting in the burner chamber.

Also, if you do install a water heater in an outside storage building you should consider using a water heater blanket.

Can a Heat Pump Water Heater be Installed Outside

Heat pump water heaters are can’t be installed outside. These units are also not recommended in unheated spaces, such as garages, because they would rely more on the electric-mode due to the wide variances in temperature of the air surrounding the water heater.

Ideally, heat pump water heaters require more space than tank models because they are taller. They also need more space to operate properly; manufacturers recommend 100sf to ensure enough airflow around the unit. So, the ideal space would be a laundry room or mechanical room.

If you would like to learn more about heat pump water heaters, our article Hybrid Heat Pump Water Heaters: Benefits, Cost, & Savings is a complete guide to the benefits, costs, and savings associated with these units.

Common Areas Water Heater can be Installed

Tank-style Water Heaters

Most tank-style water heaters can be installed anywhere in your home. The most common areas are:

  • Garages – attached unheated spaces
  • Basements – unfinished and finished spaces which commonly house mechanical systems
  • Attics – unfinished spaces above the living space.

However, tank-style water heaters can also be installed inside your home: 

  • Kitchens – common in older homes where metal box cabinets would house a small water heater. It can also be found under sinks and inside cabinets countertops.
  • Bathrooms – also common in older homes where the water heater would be located inside a closet. Hot water would flow to the fixtures quicker.
  • Laundry rooms – Often beside the clothes washer.
  • Interior closets – such as under staircases or in hallways.

Insider’s Tip: Keep in mind that interior installed water heaters need to have a drain pan with a discharge pipe directed to the exterior of the house. Gas water heaters also need an 18-inch stand to elevate the water heater to protect the burner chamber from flammable vapors and (if inside a garage) a stop post is needed.

Tankless Water Heaters

As I mentioned earlier, tankless water heater’s come in two models. You have an exterior model that has to be installed on the exterior of your home and an interior model that has to be installed on an interior surface and vented to the exterior.

Exterior Tankless Water Heaters

Let’s look at the exterior models first. And exterior tankless water heater is typically installed on a sunny sidewall that is not easily seen. This is generally done for both warmth and aesthetic purposes. 

Tankless water heaters installed on the exterior need to stay as warm as possible particularly during winter months. It is also important to have the water supply lines insulated to prevent freezing. 

Many people are installing fencing or some other decorative covers to hide the view of the tankless water heater and maximize curb appeal. 

Interior Tankless Water Heaters

Indoor tankless water heaters are most often installed in garages and basements. While uncommon, they can be installed inside attics and interior living spaces. As we mentioned before, the indoor tankless water heater needs to be located on an exterior wall where it can be easily vented to the exterior.

Attics are the exception because they can be vented through the roof much like a gas furnace. Indoor tankless units can be mounted to wood framing in the attic just as it would in other interior areas.


Whether shopping for a new house or just shopping for a new water heater to install in your current house, consider the present location of the water heater and any alterations to the plumbing that may be needed to achieve your desired goals.

A properly installed water heater in the proper location will provide you years of reliable service. With proper installation and routine maintenance, a water heater can last many years, even one installed outside. is owned and operated by Hubert Miles is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to also participates in affiliate programs with other affiliate sites. Hubert Miles is compensated for referring traffic and business to these companies.

Hubert Miles

I've been conducting home inspections for 17 years. I'm a licensed Home Inspector, Certified Master Inspector (CMI), and FHA 203k Consultant. I started to help people better understand the home inspection process and answer questions about homeownership and home maintenance.

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