Tankless water heaters save energy by staying "off"

Flow turns on the fire. A gas-fired tankless water heater only burns fuel when a hot water tap is turned on. Cold water is heated in a heat exchanger. A typical residential tankless water heater is no bigger than a medium-size suitcase.

Tankless water heaters are also referred to as "demand water heaters," because they only consume fuel when there's a demand for hot water. A tank-type water heater consumes energy at fairly steady intervals because it's designed to maintain a certain water temperature in the tank. But apart from the tiny amount of electricity required to power its digital display, a tankless water heater stays "off" until you turn on the heat by opening a hot water tap or switching on the dishwasher or washing machine.

Most tankless water heaters burn natural gas or propane fuel. The combustion process warms a heat exchanger through which the water flows. Electronic ignition eliminates the need for a pilot light, so no gas is consumed in the heater's "dormant" mode.

Enjoy energy savings when nobody's home

If your house is empty during the week or during frequent vacation periods, why would you want to "pay" a tank-type water heater to heat 40-80 gallons of water over and over again? That's the cycle that occurs because of standby heat loss. Even in a well-insulated hot water tank, the water eventually cools sufficiently to force the heating element or burner to turn on and bring the water back up to the required temperature. A tankless water heater never goes through this cycle. Depending on what your normal demand for hot water happens to be, a tankless water heater can cut your water heating expenses by as much as 45%.

No leaks, and plenty of installation flexibility

With a tankless water heater, there's no need to worry about the damage that might be caused if an older tank-type water heater springs a leak when you're not around to call the plumber. And since a typical home-size tankless water heater is about as big as a medium-size suitcase, it can be installed just about anywhere. Many models don't require a chimney; instead, exhaust gasses can be vented outside through a plastic pipe.

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