Conventional tank type water heaters currently make up the majority of water heaters in North America. Unfortunately, they’re a very inefficient way to heat and store water. They heat and store hot water when you’re at work, sleeping, and even when you’re on vacation. Not a great way to save on those rising energy bills. Tankless (on demand or instantaneous) water heaters, on the other hand, only heat water when it’s needed. Since there is no 24/7 storage of hot water, no constant reheating of the stored hot water, tankless water heaters come with a significant energy savings advantage.

Tankless hot water heaters provide hot water instantly when the hot water faucet is turned on. The water is then heated rapidly as it passes through the tankless water heater unit. When the faucet is turned off, the unit is then shut down. This provides for a improved efficiency, as you’re only paying for the energy that is utilized, avoiding the standby losses so commonly associated with conventional tank type models.

Tankless water heaters come in two common forms: gas and electric tankless water heaters . The gas tankless water heaters are most appropriately used for whole house applications and are commonly more powerful, but come with more requirements than electric. Gas lines must be routed, along with specific venting and combustion requirements. Much of this can be avoided with electric models. Due to higher electricity costs, however, these are most appropriate for single point or point-of-use (POU) applications. Examples would include a bathroom or kitchen usage.

Going with a tankless application can result in a broad range of energy savings. Results of up to 50 percent lower energy costs are possible, according to the U.S. Department of Energy. This, of course, is dependent on the efficiency of your previous unit, your water usage, and the type of your new application.

One advantage that tankless hot water offers over tank type models is an endless supply of hot water. We’ve all been in a shower, only to be shocked by a sudden surge of cold water. This is a big disadvantage that comes with traditional tank type units. They have a limited capacity. The tankless water heaters will never run out of hot water, as water is continuously heated as it passes through the heater.

You get clean water with a tankless system. Traditional water heaters store water in their tanks. Over time these tanks are susceptible to rust and scale build-up. The older your tank, the more rusty it can become. Rather than showering with water from an old rusty tank, tankless units allow you to shower with clean water, as water just simply passes through the unit as it’s heated. Additionally, the life of tankless units may be longer than that of traditional tank types due to fewer corrosion issues.

A more obvious advantage is that tankless water heaters come in very compact sizes. The fact that they’re much smaller than traditional tank units, affords them a number of advantages. Their space saving design not only frees up extra room, but they can be located in a number of locations. Tankless water heaters are commonly installed on walls, in attics, in closets, inside or outside. Special precautions must be followed for proper installation, however.

The most notable advantage of all is the energy savings inherit with tankless hot water heaters. Whether you’re running an electric tankless water heater or gas-fired tankless water heater , the savings are often substantial. Traditional tank water heaters have to constantly maintain hot water temperatures. This is not a very efficient method, as much energy is lost. Tankless applications allow you to eliminate these unnecessary standby losses. Depending on a number of variables, such as hot water usage, your climate, and overall efficiency of your tankless set-up, you can save anywhere from 10 to 50 percent on your hot water bill.