A tankless water heater, also known as an on-demand water heater, heats water directly without the use of a storage tank. When you open a hot water faucet, cold water flows through the unit where a gas burner or electric heating element warms it instantly. This design eliminates standby heat loss—energy wasted while stored water cools down—making tankless systems highly energy-efficient. If you're considering upgrading your home's hot water system, understanding what a tankless water heater is can help you decide if it's the right choice.
How Does a Tankless Water Heater Work?
Tankless heaters use a heat exchanger to raise water temperature as it passes through. Gas models ignite a burner when water flow is detected, while electric units rely on high-power elements. The unit delivers a continuous supply of hot water, but the flow rate is limited. For example, a typical gas unit might provide 5–7 gallons per minute (GPM) depending on the temperature rise needed. The U.S. Department of Energy notes that tankless water heaters can be 24–34% more energy-efficient for homes that use 41 gallons or less of hot water daily, and 8–14% for homes that use a lot of water. Source: Energy.gov
Key Benefits of a Tankless Water Heater
Endless Hot Water
Because water is heated on demand, you never run out of hot water as long as the unit can keep up with the flow rate. This is ideal for households with multiple bathrooms or appliances running simultaneously.
Energy Savings
By eliminating standby loss, tankless heaters use less energy than traditional storage tanks. The EPA's WaterSense program recognizes that efficient water heating can reduce overall household energy use. Source: EPA WaterSense However, actual savings depend on your hot water usage patterns.
Longer Lifespan
Tankless units typically last 20+ years, compared to 10–15 years for storage tank heaters. Their components are also replaceable, extending service life with proper maintenance.
Space Savings
Compact wall-mounted units free up floor space. They can be installed indoors or outdoors, depending on climate and local codes.
Tankless vs. Traditional Water Heaters: A Comparison
| Feature | Tankless Water Heater | Traditional Storage Tank Heater |
|---|---|---|
| Energy Efficiency | 24–34% more efficient (for low to moderate usage) | Lower efficiency due to standby heat loss |
| Lifespan | 20+ years | 10–15 years |
| Hot Water Supply | Continuous (flow-rate limited) | Limited to tank capacity; may run out |
| Size | Compact, wall-mounted | Bulky, floor-standing |
| Installation Cost | Higher initial cost ($1,000–$3,000 typical) | Lower upfront ($500–$1,200 typical) |
| Operating Cost | Lower over time | Higher due to standby loss |
| Maintenance | Annual descaling may be needed | Periodic flushing and anode rod replacement |
- More energy-efficient for many households.
- Takes up less space and can be mounted on walls.
- Provides endless hot water (within flow limits).
- Higher upfront investment but longer lifespan.
- Requires proper sizing and venting for gas units.
- May need electric upgrade for large electric models.
Installation Considerations
Installing a tankless water heater is not a DIY project for most homeowners. Professional assessment is required to determine the correct size based on peak hot water demand, incoming water temperature, and fuel type. Gas models need adequate venting and gas line capacity, while electric units may require a dedicated high-voltage circuit. Local plumbing codes, such as those developed by the International Association of Plumbing and Mechanical Officials (IAPMO), must be followed. Additionally, water quality affects performance; hard water can cause mineral buildup that reduces efficiency. A water softener can help protect your investment.
Maintenance Tips
To keep your tankless heater running efficiently:
- Flush the system with vinegar or descaling solution annually.
- Clean the air intake filter (for gas models) periodically.
- Check for error codes and schedule professional service if needed.
- If you suspect a leak, contact a professional for leak detection services.
If your unit requires servicing or repair, our water heater repair team is ready to help. Installation may involve modifying existing piping; for any pipe issues, see our pipe repair services.
Frequently Asked Questions
How long does a tankless water heater last?
With proper maintenance, tankless water heaters can last 20 years or more, which is significantly longer than traditional tank heaters (10–15 years). The U.S. Department of Energy states that quality units often have replaceable parts that extend service life.
Can a tankless water heater replace my existing tank heater?
Yes, but it requires professional installation. The gas line, venting, or electrical system may need upgrades. Our team at MyTownPlumber can assess your home and provide a quote.
Are tankless water heaters more expensive?
The upfront cost is higher—typically $1,000 to $3,000 for unit and installation, varying by region and fuel type. However, the energy savings over time can offset the initial investment.
Do tankless water heaters need electricity?
Even gas-powered tankless heaters use electricity to ignite the burner and operate the control board. In a power outage, you won't have hot water unless you have a backup generator.
How do I choose the right size tankless water heater?
Sizing depends on the flow rate (GPM) you need based on the number of fixtures and appliances running simultaneously, plus the temperature rise required. Consult a professional plumber for accurate sizing.
Can I install a tankless water heater outdoors?
Many gas tankless models are designed for outdoor installation, provided they are protected from extreme weather and meet local code requirements. Indoor units require proper venting.
Ready to make the switch to a tankless water heater? Contact MyTownPlumber today for expert installation and service. Take advantage of our special offer by visiting our plumbing offer page.
By: MyTownPlumber Editorial Team