You Can Go Tankless!

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by Planning Technician Carol Borck

What is a Tankless Water Heater?

Tankless Water HeaterA tankless water heater is just that; an instantaneous water heater that supplies hot water on demand without the need for a holding tank. What this means is that you can potentially have an unlimited supply of hot water (e.g., take back-to-back showers or run multiple hot water taps simultaneously.)

These on-demand water heaters are not new technology; they have been in widespread use in Asia and Europe for about 75 years, and were introduced to the U.S. market about 25 years ago. They can supply both potable water as well as hot water for hydronic building heating systems. Because they do not store or heat water when it is not needed, energy is only used when the hot water faucet is turned on.

How Do They Work?

A tankless unit has a sensor that is triggered when your hot water tap is turned on and water begins to flow into the heater. The sensor tells the unit's computer to ignite the burner which then heats the water as it circulates through a heat exchanger. The computer also monitors the water temperature to ensure that the water is heated only as hot as the unit has been programmed to produce. When the tap is turned off, the sensor shuts down the heater. Hence, there is no energy wasted in continuously maintaining heated water as with the traditional tank-type heater.


Tankless water heaters are available in gas, electric, and propane models. The majority of units sold in the United States are of the gas variety as the electric units require a very high amp draw in order to provide the same hot water flow rates that gas units have. Gas models also have a higher hot water output than electric units.

Tankless heaters can be installed for whole-house water heating or specific points of use. They can provide hot water for radiant floor heating systems. Various commercial and industrial operations can also utilize tankless units - anywhere that large volumes of hot water are necessary.

How to Select a Tankless Heater

As with many tank water heaters, even a tankless unit may not be able to adequately supply enough hot water for simultaneous, multiple users if its output capacity is not high enough to meet your particular needs. Therefore, before you purchase, it is very important that you have some idea of the peak volume of your hot water demand so that you select the most appropriate model for your household.

On-demand heater capacities range from 1 to 13 gallons per minute with 6 gallons per minute being typical for "medium" residential use. In order to determine what size tankless water heater is suitable for your home, it is necessary to estimate your peak flow demand for hot water. Because water is heated as you use it, the volume of hot water a unit can provide depends on its energy input. Larger on-demand units have bigger burners and can deliver higher volumes of hot water. Tankless retailers or plumbers can help you calculate your peak demand, but basically you will be analyzing the number of showers, hot faucets, and appliances that could potentially be in use simultaneously and summing up their respective flow rates. Once you have determined what your maximum flow demand could be, you will be able to review product specifications to choose the model that will work best for your household.


Tankless Water Heater - wall-mountedBecause storage tank water heaters heat water continuously (by cycling on and off) to maintain the desired temperature, energy is wasted (known as standby loss) when the water is not being used. Tankless heaters "flash heat" cold water on an as-needed basis when you turn on the hot tap, and hence, are more energy efficient. In fact, tankless units have about an 80-85% energy efficiency rating versus tank-type heaters that are between 50-65% efficient.

Energy efficiency is maintained over the unit's lifetime. The efficiency of tank-type heaters decreases over time due to the build-up of minerals inside the tank.

Tankless units are relatively small; about the size of a large suitcase. They can be installed almost anywhere (indoors or outside) and are often wall-mounted.

Tankless Water Heater remote controlMost tankless heaters come with digital remote controls that can be placed in convenient locations within your home. These remotes allow you to set water temperatures and will display diagnostic codes when maintenance or repairs are needed on the unit.

And yes, it is possible to never run out of hot water (but I am not suggesting that you try).

Limitations/Special Requirements

Although tankless water heaters can provide an endless supply of hot water, they do have limits as to how much hot water can be produced at any given time. As the water flow volume through a tankless heater increases, such as two showers running simultaneously, the temperature of the hot water can decrease. If you anticipate simultaneous, multiple hot water users, you need to ensure that you select a model that can meet your demand. Other options would be to install more than one tankless unit or to limit your simultaneous uses of hot water.

Tankless heaters are more easily damaged by freezing weather. Depending on the model, outdoor installations can be done in areas where the lowest temperature ranges between 5-20 degrees Fahrenheit. Units are equipped with freeze protection devices, but should not be installed in an area with extremely cold weather. The simple solution is, of course, to install it indoors.

Tankless models are more complex than tank-type heaters, and parts for them can be difficult to get. However, this is becoming less so as tankless heaters are more widely installed.

Gas tankless water heaters draw more BTU's than a standard tank heater, therefore your gas line must be a particular diameter and not be run too long so that the unit functions properly. Additionally, with an indoor gas unit, you must provide for appropriate venting and combustion air.

Costs & Life Expectancy

The initial cost of an on-demand unit is indeed more than that for a tank-type heater. A gas-fired tankless model that provides 5 gallons per minute can cost around $800 to $1000. However, it should be noted that approximately 20% of your household energy bill comes from generating hot water, and that the elimination of standby energy loss lowers your operating costs. Additionally, tankless heaters have an expected lifetime of at least 20 years or more compared to 10-15 years for a conventional water heater. Manufacturers generally offer a 10-year warranty on heat exchangers and 5 years on parts.

Do Your Homework

  • Surf the web to read up on the various types of tankless heaters and their manufacturers.
  • Find a local dealer or plumber who can help you estimate your peak flow demand and determine what capacity heater you will require.
  • Review manufacturer's product specs and check warranties.
  • Ask dealers about parts availability/difficulties obtaining parts when repairs are needed.

Disclaimer: The products pictured in this article do not constitute an endorsement, approval, or recommendation of the product by the Town of Portola Valley. These product images are provided only for informational purposes and as visual examples.

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