Most tankless water heaters require a special vent piping material. This material is known as “Category III” and is typically stainless steel. Category III is required because the combustion efficiency of tankless heaters make it very probable that condensate will be formed within the venting system. This condensate is highly acidic and will destroy standard vent material in a short period of time. Type “B” gas vent is typically used when venting standard tank type water heaters. This type venting material cannot be used on tankless water heater installations. Another reason Category III vent is required is because the vent systems are under pressure from a fan within the heater. This is known as “Positive Pressure” venting and requires that the vent system be UL listed and sealed to prevent carbon monoxide from leaking out into the occupied space. All vented heaters as well as other products have maximum lengths that the venting can be run. The number of elbows required in the system will shorten installation distances. Always consult the manufacturer instructions and never exceed these distances and recommendations!
Florida codes and manufacturer instructions do not allow common venting to vent together or tie into an existing masonry chimney. The condensing gasses quickly begin to cause damage to the masonry and result in structural damage to the property as well as a very unsafe condition with carbon monoxide. If you can run the proper vent product up through an existing chimney to the outlet and provide the proper condensate drain to protect the unit, you can use the existing chimney as a “chase” to run your new vent pipe in. (Read the equipment’s manufacturer installation instructions!)
To the best of my knowledge, all vented type tankless manufacturers require that you either slope horizontal venting away from the heater, or provide some type of condensate drain within 3′ of the vent connection. This is to protect the unit from damage caused by condensate. The condensate in the venting will destroy the heat exchanger if allowed to run back to the unit. A unit’s heat exchanger will be ruined within a few years if not vented properly. All Category III vent manufacturers have the ability to provide a drain tee even when venting is installed straight up to properly protect the unit.