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Tankless Water Heaters Simplified


Are you looking to replace your traditional tanked water heater? Maybe you want a supplemental source of hot water, so you don't have to use your traditional tanked water heater all the time. If so, then consider a tankless water heater.

Tankless water heaters are a cost effective option, creating hot water only when needed. When there's a demand for hot water, tankless water heaters create it. Traditional tanked water heaters keep hot water on standby so it's ready to use whenever you need it. Why pay to heat water that's not in use?

Typically, tankless water heaters provide hot water at a rate of 2-5 gallons per minute, making them an ideal option. They're a great option for apartments, condos, or larger homes.

Tankless water heaters can either act as a primary source of hot water or supplement your traditional tanked water heater, supplying you with enough hot water to get your through the winter months. In some parts of the country it gets so cold, it's hard to keep enough hot water available for everyone. What your traditional tanked water heater lacks, the tankless water heater will produce.

Other uses include:

  • Pool house or pool shower
  • Outdoor sink
  • Remote bathrooms
  • Hot tubs

Traditional tanked water heaters keep water hot inside the tank until it's ready for use, tankless water heaters don't. Your energy service provider bills you for keeping water heated whether it's in use or not, costing you hundreds of dollars a year. Essentially, you can save money on your energy bill using a tankless water heater.

For homes using 41 gallons or less of hot water per day, tankless water heaters are an efficient choice. In fact, tankless water heaters can be 25% more energy efficient than a traditional tanked water heater. Even if you use 90 gallons of hot water a day they're still at least 10% more efficient.

Tankless Water Heaters: Similarities and Differences

Tankless Water Heaters

  • On demand hot water
  • Electric or gas versions
  • Point of use or whole house options
  • No traditional tanked tank; no heat loss
  • Heat exchanger heats cold water
  • Electric resistance heating coils
  • Gas fired using natural gas or propane

Traditional Tanked Water Heaters

  • Stores hot water in the tank
  • Works by convection
  • Dip tube injects cold water into tank
  • Gas burner heats the cold water
  • Hot water rises to the top
  • Discharged through discharge pipe

Fuel Type

There are two types of tankless water heaters: electric and gas. Which one you choose depends on how much you use it.


Make sure your home can support the electrical demands of an electric tankless water heater. The amp draw is important. Most units accommodate 110V, 120V, 208V, 220V, 240V, and 270V. Check your circuits to make sure you have what's needed.


Identify the gas type: propane or natural gas. Make sure your current gas line can accommodate the gas tankless water heater. You must consider venting. There are kits available for this. Professional installation is recommended.

Tankless Water Heaters: Location, Size and Demand

The type you select should be based on your intended use. Point of use tankless water heaters can't provide enough hot water to take a shower and run the dishwasher at the same time, but whole house tankless water heaters can.

Point of use option:

  • Single point application
  • Fits under a bathroom or kitchen sink
  • Great for a single cup of water
  • Serves one sink, faucet, or shower
  • Capable of heating to 170 degree F

Whole house option:

  • Multipoint application
  • Application is based on GPM or flow rate
  • Higher flow rate equals more coverage
  • Services more than one shower
  • Services multiple faucets
  • Great for dishwasher use

Determine the size you'll need. Ground water temperature is an important determining factor. The cooler the ground water is the lower the production, meaning a tankless water heater in California would produce more hot water at a faster rate than a tank in Illinois. If you live in a colder environment, you need a tankless water heater with higher GPM.

Three factors should influence the size you choose. I've listed them below.

  • GPM flow rate
  • General temperature of cold water entering the water heater
  • Desired hot water temperature

To determine the rate of increase, subtract the desired temperature from the existing temperature. For example, if you want a shower that reaches 90° F and you're ground water is 65° F, you would subtract 65 from 90 or 90-65=25. This would be the temperature rise needed. Once you verify the rate of increase you can determine the GPM needed.

Know the typical flow rates produced by your fixtures; gallons per minute or GPM vary from fixture to fixture. Each unit features a different flow rate. You need to select a tankless water heater to meet your demands.

Understanding GPM

The Federal Energy Policy Act of 1992 required all faucet and shower fixtures made the US to have a flow rate of no more than 2.2 GPM at 60 PSI. If your unit produces more than the new standard requires, it's time to replace your faucets and shower heads. So how do you measure your flow rate? Follow the instructions below for easy measuring.

  • Collect the water from the fixture for 10 seconds
  • Measure the quantity of water in the container and convert the measurement to gallons
  • Multiply the measured quantity of water by 6 to calculate the flow rate in gallons per minute

Following these simple instructions will help you to determine what your GPM is and what type of tankless water heater to choose.

Once you know the flow rate and temperature rise, you can determine the size of the tank required to meet your needs. For smaller jobs you can use an electric tankless water heater. For larger jobs you might require a gas version. Depending on the flow rate, temperature rise, and how much heating you need at one time, you might need two units.


We've already indicated tankless water heaters are efficient. If you choose to use one, you can save 20% on your overall energy bill. As previously noted, the tankless water heater doesn't heat water when it's not in use. So when you're out of town, you don't have a water heater storing hot water that's not being used.

Another plus, if you install tankless water heaters in your home, you'll might be eligible for a federal tax credit for up to $300. All in all, you'll save money, money you can put toward your next vacation.

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