On-Demand Hot Water Heaters 
Buying Tips, Pros and Cons

Rinnai on-demand water heater

Buying an on-demand hot water heater - yes or no. This article will present you not only the facts and reviews but opinions from professionals and most common user comments about on-demand water heating, advantages, sizing, costs, and manufacturers.

As I was reading more and more about on-demand water heaters and how these compare to tank-type, I was becoming more and more confused.

A vast number of websites and “gurus” are dealing with the topic on demand vs. tank or traditional (conventional) type. One group prefers an old traditional way with the tank-type heater, while others, especially those who experienced on-demand water heating, like the tankless technology.

How on-demand heating works. On-demand vs. tank

On-demand hot water heater, often called tankless, can be powered by natural or propane gas, electric also, and it provides hot water whenever you need it (as soon as you open the tap), and delivering it in continuous supply to one or multiple applications, simultaneously.

The cold water passes through the heat exchanger where it is heated instantly by a built-in gas burner or heating elements (electric on-demand units).

This type of the appliances provides endless hot water, so it is perfect for homes where there is a high demand for hot water, or for the occasional use (cottages or on camping, for example). Use this article to find more about tankless.

Contrary to on-demand heaters, water tank heaters heat water inside the large tank, and hot water is almost always ready. If all of the water from the tank is gone - used, you have to wait for some time before you can use it again (depends on the recovery and tank capacity). More about tank-type heaters here.


  • Indoor models – models installed only inside the house.
  • Outdoor models – installed outdoor only.
  • Point of use – small on-demand water heaters that are installed mainly under the sink in the kitchen or bathroom, and close to the hot water fixture.
  • Whole-house – installed mainly on the wall to save space and provide enough hot water from small to large homes.
  • Portable – this type is used mainly when camping or when hot water is needed outside and off-grid (washing pets on the farm, for example).
  • Mobile – this type is used in RVs or marine industry, and the most common are those on propane fuel.

Selecting and sizing demand water heaters

Before buying a water heater, you need to consider the following:

  • Size
  • Fuel type and availability
  • Efficiency
  • Costs

If you require professional assistance, contact a local water heater expert today!

If you need HELP contact an expert today!


Sizing an on-demand hot water heater is not hard to figure out. You would be best if you determined the flow rate and the temperature rise for the applications in your home. List the number of applications you expect to use at the same time and add up their flow rates, calculated in gallons per minute (GPM).

The temperature rise is also easy to calculate; subtract the temperatures of the incoming water temperature and desired output temperature. Different values for temperature rise are usually given in the manufacturer’s manuals.


On-demand water heaters are more efficient than conventional type – most have the energy factor of 0.82, Energy Star – 0.87 or higher, and the most advanced, such as condensing have the energy efficiency of over 90%.


The on-demand water heater is more expensive than traditional tank-type. The prices can be double, or more. Venting is also very expensive, as the non-condensing models use the stainless steel vents due to the high exhaust gas temperature and acidic nature of condensation. Tankless heaters have more sophisticated elements; they need more care, which makes the service and maintenance more expensive too.

On average, one on-demand water heater can save up to 40% of heating costs, when properly installed.

Popular gas tankless manufacturers for residential use

Popular on-demand manufacturers for RVs and camping

  • Eemax
  • Suburban
  • Zodi
  • Coleman
  • EccoTemp

Popular on-demand electric heaters


The main advantage of the on-demand hot water heater over the storage tank-type is the use of sophisticated components, which are replaceable and serviceable. For example, if leaking happens on the water tank heater, you have to replace the whole unit, while if the heat exchanger leaks, no problem, you just have to replace this particular element.

Tank-type heaters operate at a constant gas input rate, while tankless have a modulating burner (actually gas valve provides more or less gas), which adjusts its power based on the water flow. Since the tankless heaters do not have the tank, but heat exchanger, they are able to provide hot water up to its maximum rated output. If the system is not sized properly the unit cannot meet the demand if the demand exceeds the maximum output. On the other hand, tank-type can handle peak demands.

Most of the tankless units utilize the self-diagnostic system and remote controller to monitor the water heating and change the settings which makes them convenient to operate. Advanced electronics allow easy troubleshooting so in some cases homeowners can fix the problem.

On-demand hot water heater does not require the anode rod since there is no water storage and the inner components are made of the copper and stainless steel, so there is no corrosion as it happens on metal tanks.

If you require professional assistance, contact a local water heater expert today!

If you need HELP contact an expert today!

Other requirements

All tankless heaters need a minimal water flow to trigger the ignition so properly sized plumbing pipes are a must. Tank-type can work with any flow or pressure. Also, the correct size of the gas pipe should provide sufficient gas for gas combustion so when switching from tank to tankless; a proper size should be provided and the new vent pipe. Every on-demand water heater consumes a large amount of gas at the beginning.

According to consumerreports.org on-demand water heaters are more efficient but not economical.

Installation and maintenance tips

Installing an on-demand water heater is much more expensive than conventional tank-type, especially in the case of the venting system where stainless steel pipes should be used. Direct vent tankless models are designed for the installation in any part of the house as they come with the sealed combustion chamber and vent system that gets the air from outside and transfers the flue gases out safely.

In retrofit situations, when replacing the tank heater with the tankless, installation costs are higher. Due to its higher gas inputs, tankless units require larger venting and gas line.

Periodic water heater maintenance can greatly extend the unit’s life and reduce service costs.


Almost every on-demand hot water heater has the 12-year warranty, some 15 years, on the heat exchanger and five on other elements, while most of the tank-type heaters 6-9 years, rarely 12.

Life expectancy

On-demand water heaters have an average service life of up to 20 years while tank-type of 10-15 years. While almost all the elements of tankless units can be replaced, this is not the case with the conventional models.


Based on the facts from above, the on-demand hot water heater is more energy and water efficient with long draws, and that is why it is recommended in situations where there is high hot water demand. Since it heats water only when it is needed it is also recommended in places where it is not used frequently.

One of the frequent complaints about the tankless operation is the "cold water sandwiching”, which is minor when taking into account the great number of positive reviews. With the new advanced technology implemented in some models, water heaters today are capable of reducing the number of temperature fluctuations, significantly.

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