#AskMike Can a tankless water heater be installed outside? Yes, it can. I do recommend looking into a tankless water heater for your home. Heating water is the average home’s second highest utility cost after heating and cooling the house itself. A tankless (or on-demand) hot water heater is different from a typical water heater because it produces hot water ON DEMAND. The units run on electricity, natural gas, or propane. This unit is from Bosch heating & Cooling | Mike Holmes