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What is a Tankless Water Heater & How Do They Work?

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Have you ever been faced with the dilemma of having to decide between running a load of laundry and having a comfortable shower? Have you been meaning to run the dishwasher because your friends are coming over, but don’t know if there will be enough hot water to get the job done?

These are common occurrences in most households, and when they happen, a conventional hot water heater may not always be enough to get the job done. Tankless hot water heaters provide on-demand hot water as soon as you turn the tap, and they keep it coming for as long as you need. With the ability to save space, higher overall efficiency, and not having to worry about shower lineups, dish pileups, and other potential inconveniences, a tankless hot water heater may be a good option for your home. Read on to discover some of the benefits, and how these modern mechanical gems work.

How They Work

The comparison of a tank water heater and a tankless water heater

Tankless water heaters provide warm or hot water whenever they are activated, which is done in an instant as you turn your faucet to the warm or hot position. A conventional tank-style water heater will hold an in-house supply of water, whereas its tankless counterpart uses an internal heat exchanger to raise the incoming water supply to the desired temperature, commonly referred to as “on-demand”.

For this reason, tankless systems don’t experience standby heat loss, which typically occurs in conventional systems when water is constantly being heated day and night, even when you don’t need it.

These internal heat exchangers are similar to those found in other common appliances such as air conditioners, fridges, and radiators, and simply require access to heat from another source, such as propane or electric, in order to heat the passing water for you to use.

Overall, the  way a tankless system works can be broken down into 2 simple steps:


The heat exchanger is activated when you turn your faucet to the warm or hot position.


The passing water is heated to the desired temperature that you have chosen by turning your faucet to the desired position or setting.

A service technician tightening a cold water valve on top of a water tank with a wrench. The water lines are identified as red for hot water and blue for cold water.


Unlimited Hot Water

A tankless hot water heater will never run out of water, as it heats the incoming water rather than maintaining a certain level of hot water with limited usage.

Longer Life

Tankless heaters generally last 5 to 10 years longer than tank-style systems and are typically more durable as well.

Greater Efficiency

Because tankless water heaters do not heat water on an ongoing basis when it may not be needed, they are more efficient as they are utilized on-demand instead.

Compact Size

Tankless water heaters generally take up substantially less space than conventional tank-design heaters, especially if you opt to have an individual heater installed under each sink in your home.

Heat As Needed

Power is consumed more economically as it is only required when the tap and temperature are turned on for hot water, rather than constantly heating water that is not in use in a tank-based system.

Lower Heating Bills

You can significantly save on your energy and heating bills as a result of more efficient power consumption from a tankless system.


Tankless water heaters can not cause a flood within your living quarters as they don’t store large amounts of water. This minimizes the risk of a tank leak causing potential damage to your home.


Higher Up-Front Cost

The price of a tankless water heating system is more expensive upfront than a tank-based system but tends to pay itself off due to the overall higher level of efficiency and leading to savings on your utility bills.


The hot water that a tankless water heater generates is spilt between all outputs within your home. If multiple people are having showers at the same time, for example, the water may only be lukewarm.

Possible Gas Line Replacement

Depending on the model of tankless water heater, your home may require an upgrade to the existing gas line in order to adequately fuel the system.

Possible Extra Circuit Needed

An additional electrical circuit may be required in your home to provide the appropriate power for your tankless water heater, depending on your selection.Overall, there are pros and cons to any water heating system which is why it’s generally recommended to meet with a professional in order to determine your needs. That way you may take certain considerations into account when it comes to making a decision that will work best for you and your family’s water heating needs.

Thomas Howard

Written by Thomas Howard

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