How a Tankless Water Heater Works

How a Tankless Water Heater Works

The water heater in your home may look simple on the outside, but it has an ingenious design inside. It uses the principle that hot water rises to heat incoming water in the tank.

When it comes to water heater maintenance, prevention is always better (and less expensive) than cure. Regularly draining and flushing your water heater can help prevent sediment accumulation which can cause corrosion in your home’s hot water pipes.

Storage Tank Water Heaters

Traditional storage tank water heaters use a large tank to store hot water until it is needed. The tanks are heated with gas or electricity, and a thermostat controls the heating elements. When the hot water tap is turned on, the thermostat signals the system to turn on one of the electric or gas heating elements, and heat is transferred to the stored water. The hot water then flows to the faucet. These systems have a long useful life, though they typically require regular flushing to remove mineral sediment from the tank.

One drawback of this type of water heater is that it continually loses heat through the tank walls while waiting for the hot water tap to be used. This is called standby heat loss, and it drives up energy bills for the homeowner. Newer models of storage water heaters are well-insulated, and older ones can be wrapped in an insulation blanket to minimize this loss.

Also, these systems take up more space than on-demand models. This isn’t usually a problem in homes with basements, but it can be an issue for homes that are space-challenged. In addition, if you replace an old storage tank water heater with a new model, the newer water heater may be larger and require a bigger space, due to federal energy efficiency requirements.

Tankless Water Heaters

A tankless water heater creates hot water on demand, heating it when the unit senses a flow of water through the system. This type of heater is more energy-efficient than traditional models because it uses less fuel and power to operate. This also helps homeowners save money on utility bills, and it’s a better option for the environment.

This type of heater comes in gas and electric varieties. A gas tankless model is the preferred choice for homes that use a lot of hot water, as it can handle a higher demand than an electric unit. Electric models are more suitable for smaller homes or single-family residences that don’t require a high volume of hot water usage.

The best tankless water heaters have a flow rate that’s matched to your home’s needs, allowing you to use as much or as little hot water heater water as you want without worrying about running out of water. The most popular tankless models are capable of delivering up to 11 gallons per minute (GPM) using a high draw pattern, which is the industry standard for evaluating heavy-duty water heaters.

Like other types of water heaters, tankless models require regular maintenance to keep them in good condition. This includes flushing the heat exchanger to remove hard-water deposits, ensuring the gas supply line is properly connected and that there are no leaks, and checking for signs of electrical issues. If you hear rattling or banging sounds, call for a professional inspection to determine the source of the problem.

Energy-Efficient Water Heaters

For eco-conscious homeowners, choosing an energy-efficient water heater is a smart investment. It not only saves money and reduces carbon emissions, but it also helps you lower your electric bills. Look for ENERGY STAR certified models with a high Uniform Energy Factor (UEF) rating, which reflects how efficiently the water heater heats and stores water.

If you opt for a conventional storage tank water heater, look for options with insulation to minimize cycling losses. These are the energy losses that occur while hot water circulates through the tank, inlet and outlet pipes. In addition, consider a gas model with an automatic ignition pilot that turns off when not needed, rather than using a constant flame like older models.

Another option is a hybrid water heater, which uses a regular tank for storing hot water and a demand-type system that heats water only when you use it. This type of water heater can be 24%-34% more efficient than standard tank water heaters, and it can help you reduce your electricity usage by up to 20%.

If you want to cut your energy costs even further, consider an electric heat pump water heater (HPWH). These units rely on electricity for heating, but they work like “batteries” that store and use clean, renewable solar power. They can run on tankless instant water heater off-peak electricity, lowering your electric bill and cutting your carbon footprint, and they’re eligible for the federal Energy Efficient Home Improvement Tax Credit through 2024.


A storage tank water heater is a simple appliance that heats your water on demand when you need it. Water enters the appliance unheated and is heated by electric resistance elements that run from side to side. Once the water reaches a high enough temperature, it flows through a pipe at the bottom of the heater to your home’s hot water system.

Installing a new water heater or replacing an existing one is typically a fairly straightforward plumbing job. The most significant cost comes from modifying or expanding the existing water and gas lines to accommodate the new unit. This work requires a professional to ensure it’s done safely and in compliance with local plumbing, building and safety codes.

Depending on your location, you may need to modify or extend the cold and hot water lines to the water heater. You’ll also need to make connections for the gas valve and electrical wires.

You can purchase copper tubing, a soldering iron and pipe fittings at your local hardware store for completing these tasks. However, it’s often easier to hire a plumber for the installation process to prevent any accidental damage or mistakes. For example, improperly connecting a gas line can cause a carbon monoxide leak or a fire. It’s also not a good idea to attempt to remove or install a gas water heater without a proper permit.

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