Tankless Water Heaters

How tankless or on-demand water heating system works, pros and cons, brands...

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When searching for the residential tankless water heaters, also called on demand and instant hot water heaters, it is important to know that the tank-less system and heating process is different from tank-type systems. Use this article to explore how these high efficient and condensing products can benefit you, reduce the energy consumption and save money.


About tankless water heaters

The main advantages of the tankless water heaters are the tank-less or on-demand design, continuous flow and endless supply of hot water, low energy consumption (up to 30-40% reduction when comparing it to tank-type heaters), small and compact design, replaceable parts, condensing technology and great savings.

When comparing the tankless technology with storage-tank you will see that the conventional type is heating water even if there is no demand, while the tankless appliances work only when you open the hot water tap or on demand.

bosch tankless water heater

Tankless water heaters can use gas or electricity. The favorite types are gas-powered with the electronic ignition, but you can also find models with the continuously burning pilot light, both types having pros and cons.

The size of the unit you need depends on demand, how big the house is and the family size. Some manufacturers offer a multi-system set-up that can link many units into one system, to satisfy high demand of the large homes.

Majority of these tankless hot water heaters are whole-house type, as they have higher GPM flow rate capacity, so they can easily handle high water demand, for more than one application at a time.

There are also some manufacturers that offer economy residential and commercial grade models for using in space heating and water heating at the same time - known as the combi boilers.

How tankless works

After checking how tankless water heaters work, you will see that these models are more complex than standard type, so more knowledge is required before trying to install or service them. This is especially true when dealing with the gas-powered units.

How electric tankless type works

Electric tankless heaters utilize the heating element that is controlled by the flow-sensing device that operates with a constant heat input and maximum flow rate. Flow rate depends on the pressure which can be adjusted on the knob.

If there is a request for maximum flow, the outgoing water toward the hot water tap will be cooler since it spends less time passing through the heat exchanger.

How gas type works

Modern gas-powered tankless models use the latest technology where the output temperature, flow, safety and other parameters are controlled and regulated by the electronic circuit board or small computer. Good examples are Rinnai, Noritz, Takagi or Paloma.

this picture explains how tankless hot water heaters work

When you open the hot water tap a flow sensor in the tankless hot water heater sends the signal to the electronic module. From there signal goes to the gas valve to open the gas flow.

If all the requirements are met, natural gas or propane flows into the burner located inside the combustion chamber. The gas is ignited either by the pilot flame (older models) or spark from the electrode.

Burning gas heats the heat exchanger where the incoming cold water gets quickly heated to the pre set and desired temperature. The heat exchanger transfers the heat from the burner to the water heating instantaneously. A vent pipe vents products of combustion out using the direct vent or powered vent system.

Once the faucet is turned off, the flow stops and flame goes out. As it can be seen from the above explanation tankless water heaters heat the water on demand, while providing you with an endless supply of hot water. These models are mainly installed on the wall, saving you the floor space for other use..

Video: Tankless Basics

Reviews by fuel source


Electric tankless hot water heaters have a compact and small design, saving you lots of space. They have a long service life as they are less prone to hard water and sediments. You can choose point-of-use or whole-house water heaters. Electric tankless water heaters do not require venting and do not produce greenhouse gases. Top selling brands in North America are Bosch, Titan, Stiebel and Eemax.


Gas tankless hot water heaters are environmental friendly appliances also. Many of them utilize the advanced technology for energy efficiency, and meet strict emission standards. They can use natural gas or propane - LP. Gas tankless water heaters produce higher flow rates than the electric ones.

Tankless hot water heaters can be further divided into two categories; one that can only work as on/off (older models) and the other with the modulation (utilizing the modulating gas valve).

Hot water heaters with modulation, base the heat output on the water flow. For example if the demand for hot water is higher, modulating gas valve provides more gas and the final result is more power.

emergency plumber


Here is the list of the popular residential tankless hot water heaters in US and Canada, where many are Energy Star qualified models, some brands are cheap and the other expensive:

  • GE

See our selection of the best tankless models.


  • Endless hot water supply. Run out of water? Never.

  • Durability, life span is 20 years or more (for some).

  • You can save up to 50% of energy and heating costs.

  • High efficiency heaters available, marked as Energy star.

  • Flexible installation options, can be installed anywhere, inside or outside.

  • All the parts are replaceable.

  • Lower greenhouse gas emissions.

  • Reliability rating is 99%.

  • Safety - no scalding injuries.

  • Provides you clean and fresh hot water.

  • No tank no leaking problems.

  • Some use smart technology with self-diagnostic program (great for repairs) and precise temperature control for safety and comfort.

  • Government tax credit, rebate and other incentives.

  • They can use natural gas or propane (LP).


  • With the high up-front costs tankless system can cost up to three times as much as tank-type heaters.

  • Required upgrades like venting system or gas line are costly.

  • The hot water output is split among all the household fixtures, resulting in inconsistent water temperature, temperature fluctuation or cold-water-sandwiches.

  • Venting gas and propane units requires expensive stainless steel tubing, for some brands other materials are used.

  • Electric instant water heaters may require an additional circuit and lots of energy.

  • Gas water heaters require the additional expense of an annual servicing.

  • Instant water heaters need a minimum flow rate to activate the heat exchanger.

  • Tankless water heaters rely on the pressure that is delivered to your home - the reason why you need a good plumbing system.

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(Photos are courtesy of Bosch and Takagi)