A tankless water heater is a relatively new take on the venerable water heater that makes it easier to clean our bodies, our dirty dishes, and our laundry. Instead of having a tank that contains several gallons of water to be heated, a tankless water heater just heats up the water that will be sent to a faucet or appliance. It uses less energy and potentially less water than a traditional water heater.

There are several benefits of a tankless water heater, including less energy consumption. A tankless water heater also eliminates one of the more common causes of internal flooding inside homes. Ruptured tanks of water heaters can cause significant flooding – especially if you don’t catch it right away. Internal flooding caused by a ruptured water heater tank will allow the water to flow continuously until the supply is cut off. That won’t happen with a tankless water heater.

Modern, bright bathroom

How a Tankless Water Heater Works

A tankless water heater uses a heating element that makes the water hot before sending it to the respective faucet, appliance, or shower head. When you turn on the hot water, the water flows through a heat exchanger that uses either electricity or natural gas to heat it. You won’t have to wait for the water inside a water tank to heat up to the optimal level before you feel it. You get the hot water faster while using less energy.

The tankless water heater gets its water from a cold water pipe, which means the water generally is at about room temperature before being heated. The cold water passes through a heating element that is located near the faucet, shower head, or appliance that needs the hot water. The water does not flow as quickly as it does through a traditional water heater, but it heats up faster and holds the heat better due to the shorter journey to where it is needed.

Tankless Water Heaters Improve Water-Efficiency

Another name for the tankless water heater is a “demand” water heater, which means it produces hot water on demand but not beforehand. The U.S. Department of Energy says a tankless water heater can be about a third more efficient than a traditional water heater. It is especially beneficial on homes that use no more than 41 gallons of hot water every day. If you have a large family, the tankless water heater might not prove as beneficial as it would for a home with a smaller family or just one or two people living in it.

Tankless Water Heaters Are More Energy-Efficient

A tankless water heater also can use significantly less energy than a traditional water heater. The U.S. Department of Energy says a home that uses about 40 gallons of hot water every day can save up to 34 percent on energy costs to produce that hot water. That is a significant savings on the cost to heat water in a tank and then send it through a network of pipes that are certain to cause some heat loss in the water.

Even in homes that use a lot of hot water every day, a tankless water heater can use up to 14 percent less electricity or natural gas to provide your home with hot water on demand. The less energy your home uses, the better your return on investment in a new tankless water heater. You also run a lesser risk of water damage inside your home. You don’t have to wrap the hot water pipes with insulation or worry about them causing condensation when they sweat. Dry pipes and no water tank make it less likely that mold or mildew might set in and make your home less safe for its inhabitants.