Looking for another way to increase energy efficiency in your home? Tankless water heaters, also called instantaneous or demand water heaters, provide hot water only as it is needed. Traditional storage water heaters produce standby energy losses that cost you money. We do not leave our homes heated while vacationing. We only heat our homes when there is a demand for heat. In the same way, a tankless water heater is used only when there is a demand for hot water.
Tankless water heaters heat water directly without the use of a storage tank. Therefore, they avoid the standby heat losses associated with storage water heaters. When a hot water tap is turned on, cold water travels through a pipe into the unit. In an electric tankless water heater an electric element heats the water. In a gas-fired tankless water heater a gas burner heats the water. As a result, tankless water heaters deliver a constant supply of hot water. You don't need to wait for a storage tank to fill up with enough hot water.
For homes that use 41 gallons or less of hot water daily, tankless water heaters can be 24% - 34% more energy efficient than conventional storage tank water heaters. They can be 8% - 14% more energy efficient for homes that use a lot of hot water, around 86 gallons per day. You can achieve an even greater energy savings of 27% - 50% if you install a tankless water heater at each hot water outlet.