What runs at the same time
A tank stores hot water. A tankless unit makes it as you go, so it is sized in gallons per minute, not gallons. Add up what realistically runs together. We use 2.5 gallons per minute for a showerhead, which is the federal limit, about 1.8 for a faucet and about 2 for a dishwasher or washer. Two showers at once already means 5.
How cold the water comes in
The unit has to lift incoming water up to the setpoint. We use 120°F, the commonly recommended setting. Where the average January low is 40°F or higher, we figure incoming water at 65°F, a rise of 55°F. Between 25°F and 40°F we use 52°F, a rise of 68°F, and below 25°F we use 42°F, a rise of 78°F. Every place on our Michigan list is below 25°F in January, so the checker works with a 78°F rise.
How the size is worked out
The heat a unit has to deliver each hour is the flow in gallons per minute, times the rise in degrees, times 500. That figure comes from the weight of a gallon of water. We round it and place it in one of our own planning bands, based on that delivered heat. Up to 90,000 BTU per hour is a small unit. Up to 150,000 is a standard whole-house unit. Up to 190,000 is a large unit. Above that, two units are linked together.
A tankless unit trades flow for rise. The same unit gives more gallons per minute at a small rise than at a big one, which is why every tankless rating is stated at a rise.
Gas and electric limits
Gas units go up to about 199,000 BTU per hour of input, and two can be linked. Electric units top out near 36 kW, about 123,000 BTU per hour, and they need a very large electrical service. The result shows how many gallons per minute each one delivers at your rise. A plumber or an electrician checks the gas line, the electrical service and the venting before any unit is chosen.
Data: fixture flow rates from the federal showerhead limit and typical faucet and appliance flows, the 120°F setpoint recommended by the US Department of Energy, and incoming water bands set from Daymet winter data 2015 to 2024 for each place.