Tankless Water Heaters


An innovation in water heater design is the Tankless water heater. Also known as a demand-type or instantaneous water heater, this energy-efficient option functions to provide hot water on an as-needed basis. Unlike traditional storage water heaters, this tankless design can save you money by eliminating standby energy losses.

Below is an informational resource that details how tankless water heaters operate, if they are right for your particular home, and the criteria to utilize when choosing the proper model for your unique situation.

Reference the Energy Saver 101: Water Heating infographic below to aid in making the best decision. Also join our #AskEnergySaver discussion on water heating to gain a better understanding on this topic of efficient water heating.



Tankless water heaters function without stored hot water by heating water only when it is manually initiated via a faucet or other appliance. When a hot water lever or button is turned on, cold water is sent into the heating vessel through a pipe and the heating process begins by way of either a gas burner or electrical element. By the nature of this method, tankless water heaters offer a constant source of hot water. The time needed for a traditional storage tank to fill back up with hot water is eliminated. However, because there is not a large quantity of water waiting to be utilized, a tankless system will have a limited flow rate compared to a storage tank water heater. 

The average rate of hot water provided through a tankless water heater is 2-5 gallons/minute (7.6-15.2 liters/minute). Tankless water heaters operated by a gas burner produce higher flow rates than electric alternatives, however even the largest gas-fired model can struggle to supply adequate amounts of hot water to larger homes that may require more simultaneous hot water demands such as showering and running the dishwasher in tandem. 

One way to overcome this drawback would be to install two or more connected tankless water heaters to increase the output abilities for a household. Additionally, multiple demand-type water heaters can be implemented for use for each appliance within the home that requires a larger amount of hot water at a time. 


Some Applications for Tankless Water Heaters:

  • Remote bathrooms or hot tubs
  • Booster for appliances, such as dishwashers or washing machines
  • Booster for a solar water heating system



In contrast to traditional storage tank water heaters, tankless systems can provide greater energy savings. Homes that utilize 41 gallons or less of hot water per day can be 24-34% more efficient in energy output; 8-14% savings for homes that use much larger quantities (approximately 86 gallons/day). A demand-type water heater installed at each hot water outlet can yield an impressive energy reduction of 27-50%.

Although tankless water heating units cost more money initially, they typically offset this higher purchase price via long lifespan and lower energy expenses. Unlike traditional storage water heaters that usually last around 10-15 years, tankless water heaters are designed to have a life expectancy of more than 20 years and thereby further make their installation well worth the price. 

One possible disadvantage of a gas-fired instantaneous water heater can occur if the pilot light is constantly burning. If this process ends up utilizing too much gas it can run the risk of eliminating any cost-savings otherwise expected from a tankless system over a storage tank system. One way to mitigate this concern is to turn off the pilot light when not in use in models that are equipped with a standing pilot light. Alternatively, in models that contain an intermittent ignition device (IID), the pilot will only be lit when the hot water is initiated. 



Before buying a demand water heater, consider the following:

  • Size
  • Fuel type and Availability
  • Energy Efficiency
  • Overall Costs




Proper installation and maintenance of your tankless water heater can optimize its energy efficiency. Factors that influence sufficient installation are, but are not limited to, fuel type, climate, local building code requirements, and safety hazards. The complexity of this installation requires a qualified plumbing and heating contractor. 

When selecting a contractor, do the following:

  • Request cost estimates in writing
  • Ask for references
  • Check the company with your local Better Business Bureau
  • Determine they will obtain a local permit if necessary
  • Ensure they understand and will follow local building codes

If you plan to undergo installation yourself, consult the manufacturer of your tankless water heater model to obtain the proper installation/instruction manuals. Also, contact your city or town to potentially gain a building permit and to determine local installation codes.


Periodic water heater maintenance of your tankless water heater can significantly extend its life expectancy and energy efficiency. Reference your owner’s manual for specific maintenance recommendations.


In addition to the cost savings that result from a demand-type water heater, consider implementing other strategies and devices to work with your tankless system to further lower your energy expenses.

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