William Lund asked:


Let’s begin by examining the traditional tank-type water heater.  Basically you have a big barrel of water with a fire under it.  (We will get to electric water heaters shortly.)  If you put the fireplace right under the barrel with the chimney through the center of the barrel then you have a pretty good idea of how a gas water heater heats the water.

The gas flames are not very big, so it takes up to an hour to heat that barrel of water.  Having that barrel of hot water is very handy.  You can take a shower and have plenty of hot water. With a big barrel several people could take showers without running out of hot water.  If you want just a trickle of hot water you just adjust the faucet.  Filling a bathtub quickly is no problem.  Usually a bath faucet will produce a much larger flow than sink or shower fixtures.  That way you can fill up the bathtub quickly before the water has a chance to cool off.

An electric tank type heater works in a similar fashion.  Heating elements similar to electric stove burners are submerged in the tank and heat the water.  Heating water with electricity takes much longer since the heating elements used in tank type water heaters are not that powerful.  Heating water with electricity is also much more expensive.

Storage or tank-type water heaters are not perfect.  Gas heaters have to have the little pilot light burning all the time, and although small, it does consume energy.  Even though that big barrel of hot water is very well insulated it still leaks out some heat.  This is known as standby loss. Standby loss is what the tankless water heaters do not have.

Now we can examine tankless water heaters.  A tankless water heater can be thought of as a long piece of pipe coiled up and put over that fire.  As water flows through the tube, the fire heats it up.  A never ending supply of hot water!

Of course, if the tube is only a few feet long, the water won’t be exposed to the heat of the fire long enough to heat it very much, especially if the water is flowing real fast through the pipe.  So it’s a long piece of pipe or tubing. When water is not flowing through the pipe the gas burner is not turned on.

To turn on the burner water must flow in the pipe.  When you turn on your fixture, a flow switch inside the heater turns on the burner. So there is no pilot light energy being used.  And since there is no big barrel of water to keep hot, there is no standby loss either.  All is well with the world. 

As with the tank-type heater, the tankless heater is not perfect either.  Since there is no big barrel of hot water, when you turn on your hot water you will not only have to wait for it to make it through the house piping, but first it must travel all the way through that long pipe.  So it will take longer to get your hot water.  This means you will likely run more water down the drain than with the tank water heater, and thus waste more water.

Another downside is that to turn on the flow switch you need to have at least ½ gallon per minute of flow and usually more to turn on the heater.  Less than that and the heater will not come on.  So if you want to use just a trickle of hot water you need that big barrel of hot water.

Want to fill your bathtub…it might not be that easy.  Typically tankless units won’t be able to match the flow rate of a bathtub faucet, so it will take longer to fill the tub…possibly a lot longer.  The bath water might cool off before the tub gets full.

The average temperature of the water going into your dishwasher will be lower, possibly causing the dishes to not be as clean. (More cold water must be run out of your system before the hot water arrives…and with a dishwasher the amount is small enough it may not even get any hot water for the first cycle.

Tankless water heaters do not work with traditional hot water circulating (re-circ) systems.  If the circulating water does not have a high enough flow to turn on the heater, then the circulating water won’t be hot. If it is high enough, then the heater will never turn off.  They will however work with the newer demand type hot water circulating pumps.  The demand pumps will eliminate the problem of running more water down the drain while you wait.

Now that you have more information you can make a better informed decision.