The condensing tankless gas waterheater discharges condensate.When heat from the exhaust gas is collected withinthe secondary heat exchanger, condensation occursfrom moisture in the exhaust gas and the resultingwater is discharged from the drain pipe (approx.0.8 gallons/hour (3 liters/hour) maximum). It is not awater leak. Do not plug or block the drain line as itmust always be allowed to freely flow.Note : The condensate discharged is acidic with a pHlevel of approximately 2-3.A condensate neutralizer may be required bylocal code prior to disposal.Drain pipe(Installation example)Overview of Condensing Tankless Gas Water HeaterThis water heater is a high efficiency, fully condensing appliance. Unlike a traditional tankless waterheater, a condensing type captures heat from the exhaust gas and uses it to preheat the incomingcold water as it passes through the secondary heat exchanger as illustrated below.The condensing tankless gaswater heater tends to showwhite steam.After the exhaust gas passes through thesecondary heat exchanger, it becomes low intemperature and moisture rich which tends toproduce steam at the vent discharge terminal.This is a normal occurrence.Condensate comesout from here.Cold waterCold waterGasGasHot waterHot waterCondensateCombustion gasAbout400˚F (200˚C)Exhaust ExhaustAbout140˚F (60˚C)ConventionaltypeCondensingTankless GasWater HeaterWater is heatedusing the exhaustgas which is about400˚F (200˚C) .Primary heat exchangerPrimary heat exchangerSecondary heat exchangercondensate trapCombustion gasAbout400˚F (200˚C)About400˚F (200˚C)During combustion, whitesteam may often be seen.This is normal.