If you’re tired of running out of hot water or want to cut your energy bills, you may be considering a tankless water heater. But how does a tankless water heater work—and what makes it different from a traditional tank? This guide explains everything you need to know, from how these systems heat water instantly, to the best models for your home, plus common features, accessories, and tips for getting the most out of your new heater.
Quick Picks: Best Tankless Water Heaters
-
Best Overall:
Rinnai V65iN Natural Gas Tankless Water Heater – Efficient, compact, and perfect for most homes. -
Best Budget:
EcoSmart ECO 18 Electric Tankless Water Heater – Great for apartments, condos, or supplemental use. -
Best Premium:
Rheem Performance Platinum 9.5 GPM Gas Tankless Water Heater – High power for large families and homes.
How Does a Tankless Water Heater Work?
Unlike traditional water heaters that store hot water in a big tank, tankless (or “on-demand”) water heaters don’t store hot water at all. Instead, they heat water instantly as you need it. Here’s a step-by-step look at what happens when you turn on a hot water tap:
- Water Flow Starts: When you open a hot water tap, cold water travels through a pipe into the tankless heater.
- Activation: The flow sensor detects the moving water and signals the heater to turn on—no standby or waiting required.
- Heating: A powerful gas burner or electric element rapidly heats the water as it passes through a heat exchanger—no tank needed.
- Continuous Hot Water: As long as the tap is open and there’s water flow, the heater keeps supplying hot water—literally “on demand.”
- Smart Controls: Many modern units monitor temperature, flow rate, and adjust energy use for perfect comfort and efficiency.
- Shutoff: When you close the tap, the flow sensor shuts off the heating element or burner. No energy wasted.
Why Go Tankless? Main Benefits Explained
- Endless Hot Water: You’ll never run out, even with back-to-back showers or filling a big tub.
- Energy Savings: No standby heat loss—these units use energy only when you need hot water, saving money every month.
- Space-Saving Design: Compact and wall-mounted, they free up valuable space compared to bulky tanks.
- Longer Lifespan: Most tankless heaters last 15–20 years with basic care—much longer than most tank models.
- Cleaner Water: No risk of rusty tank sediment; water is heated fresh every time.
Types of Tankless Water Heaters: Which Is Right for You?
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Gas Tankless Water Heaters:
- Use natural gas or propane
- Highest flow rates—best for large families and high-demand homes
- Requires venting, professional installation recommended
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Electric Tankless Water Heaters:
- Plug-and-play for smaller homes or apartments
- Simple installation—no venting required
- Best for single or small households, or supplemental hot water
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Whole-Home vs. Point-of-Use:
- Whole-home units handle multiple showers or appliances at once
- Point-of-use models supply one sink or shower, ideal for add-ons or remote bathrooms
Key Features to Look For in a Tankless Water Heater
- GPM (Gallons Per Minute): The flow rate the heater can supply. Choose the right size for your home’s busiest usage.
- Temperature Controls: Digital or manual controls to adjust water temperature for safety and comfort.
- Efficiency Rating: Look for high energy factor (EF) or uniform energy factor (UEF) numbers for maximum savings.
- Warranty: Reputable brands offer 10–15 years on heat exchangers and 5+ years on parts.
- Smart Features: Wi-Fi, recirculation, or self-diagnostic systems can make maintenance easier.
How Tankless Heaters Compare to Traditional Tank Models
| Feature | Tankless | Traditional Tank |
|---|---|---|
| Hot Water Supply | Endless, on demand | Limited to tank size |
| Energy Use | Only when needed | Constant standby loss |
| Size | Compact, wall-mounted | Large, floor-standing |
| Lifespan | 15–20 years | 8–12 years |
| Upfront Cost | Higher | Lower |
| Maintenance | Annual flushing | Flush every few years |
Best Tankless Water Heater Accessories
My PlumbingStuff Tankless Water Heater Flushing Kit
- Keep your heat exchanger clean and efficient
- All-in-one kit for annual maintenance
- Extends heater life and maximizes performance
Final Verdict: Regular flushing is the #1 way to prevent problems and enjoy endless hot water.
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Watts Lead Free Tempering Valve
- Blends hot and cold water for safe delivery
- Prevents scalding and temperature spikes
- Easy to install and adjust
Final Verdict: A must for families—adds comfort and safety to your tankless system.
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EcoSmart ECO 18 Electric Tankless Water Heater
- Budget-friendly, wall-mounted, digital controls
- Perfect for small homes or apartments
- Lifetime warranty for residential use
Final Verdict: Excellent performance at a great value—easy install for most DIYers.
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Comparison Table: Top Tankless Water Heaters
| Model | Type | Max GPM | Home Size | Price Link |
|---|---|---|---|---|
| Rinnai V65iN | Natural Gas | 6.5 | 2–3 bath | View |
| EcoSmart ECO 18 | Electric | 3.5 | 1 bath | View |
| Rheem Perf. Platinum | Natural Gas | 9.5 | 3+ bath | View |
FAQ: How Tankless Water Heaters Work
- Do tankless water heaters really provide endless hot water?
Yes—as long as you don’t exceed the unit’s maximum flow rate (GPM), you’ll have unlimited hot water for showers, laundry, and more. - Is there a delay before hot water reaches the tap?
There can be a brief wait as cold water in the pipes clears, but the heater produces hot water instantly after activation. - Can I replace my tank heater with a tankless model?
Usually yes, but you may need upgrades to gas, electric, or venting. Professional installation is best for most conversions. - How long do tankless water heaters last?
Most last 15–20 years with annual flushing and basic care—much longer than traditional tanks. - What kind of maintenance is required?
Flush the system once a year to prevent scale and keep it running strong. Use a flushing kit for best results.
Conclusion
Tankless water heaters deliver endless hot water, better energy efficiency, and a modern upgrade for any home. By understanding how these systems work and picking the right model, you’ll enjoy comfort, savings, and worry-free performance for years to come. Ready for instant hot water? The switch to tankless is easier than ever.