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Benefits of a Tankless Hot Water Heater

How Tankless Water Heaters Save Energy
From Jeffrey Orloff, former About.com Guide

Cost of Heating Water in the Home:
Generally, 20 percent of a home’s energy use comes from heating water for bathing, washing dishes, laundry, and cooking. Annually, this can add up to more than $450 to operate a conventional storage water heater.
How Conventional Tanks Work:
Storage tank-type water heaters raise and maintain the water temperature to the temperature setting on the tank (usually between 120 degrees – 140 degrees Fahrenheit (49 degrees – 60 degrees Celsius). Even if no hot water is drawn from the tank the heater will operate periodically to maintain the water temperature. Also, when cool water enters the tank to replace used water it too needs to be heated to the desired levels.
Standby Loss:
The process of heating water in a storage tank suffers from what is called, “standby loss”. Standby loss describes the energy wasted to maintain a specific temperature in the tank. Standby loss accounts for up to 20 percent of a home’s annual water heating costs.
How Tankless Water Heaters Work:
Tankless water heaters are often referred to as, “on-demand water heating,” because it does not store heated water. Once the faucet is opened, water flows into the heater where a sensor turns on the heat exchanger or heating coils. Water flows through the heating coils, it is heated to the desired temperature. Once the faucet is closed, the sensor automatically shuts down the heating coils. The entire process takes about 5 seconds to heat the water initially.
Advantages:
We have seen that since there is no standby loss, tankless heaters can be more energy efficient than their counterparts. Other advantages to tankless water heaters are that they do not waste water since water is heated almost immediately. Also, you will not run out of hot water in the middle of a shower.
Since tankless heater are smaller and do not hold water, their life span is 20 years, twice its counterpart’s.