If your shower isn't lasting as long as it used to, or you are experiencing other issues with your hot water, it may be time for a new water heater. Traditional water heaters have served their purpose well for years, but recently, new Tankless Water Heaters have been becoming more and more popular. Is a tankless water heater right for you?
What is a tankless water heater, and how does is work?
Unlike standard water heaters that keep water hot and ready for use at all times in insulated 20- to 80-gallon tanks, tankless models don't store hot water, they heat on demand. When a hot water tap is turned on, cold water runs through a pipe into the unit where a flow sensor turns on a gas burner or an electric element to heat the water to the desired temperature. When the hot water tap is closed, the flow sensor turns off the burner. 
How are tankless water heaters powered?
Tankless water heaters can be fueled by gas (natural or propane) or electricity. Gas-powered units require venting (just like standard tank heaters). Most gas models also have electronic controls, so an electric outlet is needed. Full electric tankless heaters don't need venting but have minimum voltage and AMP requirements—consult a professional to be sure your power is adequate.
Are there different types of tankless water heaters?
Two types of heaters are generally offered: whole house and point of use. Whole-house systems are powerful enough to generate hot water at flow rates to serve a household. Point-of-use units have low flow rates and are designed to supply hot water for a single appliance or location. These compact contraptions are typically installed directly adjacent to wherever they're needed, such as under a sink; they're most often used to augment a system when instant or additional hot water is needed.
How much hot water can a tankless heater generate?
Unlike standard water heaters, which draw on reserves, tankless water heaters provide a continuous supply of hot water. Sound too good to be true? Well, sort of. While the stream of hot water is unlimited, tankless models can only heat and deliver water at a certain flow rate. That output, or capacity, is measured in gallons per minute (gpm). So, while a tankless water heater won't "run out" of hot water like a storage tank can, there may be an issue of not being able to pump out enough hot water for multiple uses at the same time.
How compact are tankless water heaters?
Space savings is one of the biggest advantages of tankless water heaters. Unlike their 5-foot-tall, 24-inch-wide monolithic cousins that demand substantial real estate in a home (sometimes their own room), tankless units are wall-mounted and typically measure in at a demure 1.5 feet tall, 24 inches wide, and 9 inches deep.
Are tankless water heaters more efficient than the standard tank variety?
Yes. A drawback of standard tanks is the energy used to keep the water hot at all times, otherwise known as “standby losses.” Tankless water heaters eliminate these heat losses. The EPA estimates that tankless water heaters offer a 35 to 40 percent energy savings over high-efficiency storage tank heaters.
Tankless Water Heater Recap
Pros
- Space savings
- Increased energy efficiency
- Lower operating costs
- Long life
- Constant temperature output
- Endless supply of hot water
Cons
- Expensive
- May not generate enough output for high-use homes
- Electric controls mean no hot water during a power outage
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