Tankless water heaters have been used for decades through out Asia and Europe as general domestic hot water heaters. They first began appearing in the United States in the 1980's. Most of the houses in America have storage water heaters, which allow many users to draw hot water at once. But if you don't have many people in the house, if you're adding on faucets far from the current water heater, or if you are remodeling a home, a tankless water heater might be your best choice. They don't waste energy by storing hot water until it is needed. Instead, when a faucet draws hot water, the gas burner or electric heating elements turn on, heating the water in the pipe as needed. These units are also known as on-demand water heaters, because you never have to wait for hot water to arrive.
Tankless water heater systems can be installed centrally in a floor plan layout, but they are more valuable in a remote part of the house. Having one at the point of use will minimize pipe runs from the main storage water heater to the tap, saving water and reducing plumbing costs. Also, their small size lets you fit them into tight spaces. A tankless water heater is a good option for a one or two-person household, in a vacation home, or as a backup system for a solar water heater. In addition, it can be useful to install one as a booster heater for a dishwasher, so you can keep your storage water heater set at a lower temperature.
While manufacturers say that tankless heaters don't run out of hot water, they can only supply a set volume of hot water at once, so it's hard to run a dishwasher, washing machine and your kitchen faucet at the same time. Each model has a "flow rate," which is measured in gallons per minute (GPM). You can get plenty of continuous hot water at one time as long as your water use is within the limits of the system's flow rate. In other countries where tankless heaters are more popular, the houses and water distribution are much smaller.
Tankless water heaters range in price from around $200.00 for a small under-sink unit up to $1200.00 or more for a gas-fired unit that delivers 5 gallons of hot water per minute. Typically, the more hot water the unit produces, the more it will cost. The expected life of a tankless water heater is 20 years, compared with an average of 10 to 15 years for tank-type water heater. Water heating uses up to 25 percent of the energy in U.S. homes and is the second largest energy expense in U.S. households, according to the U.S. Department of Energy (DOE), so it's definitely worth it to invest the time and effort in researching different water heating options such as the tankless water heater.