As the name suggests, tankless water heaters (also known as "on-demand" or "instantaneous" water heaters) provide hot water directly, without the use of a storage tank. When a hot water tap is turned on, water is heated as it flows through a heating coil or heat exchanger installed inside the boiler. Either a gas (propane or natural gas) burner or an electric element heats the water. As a result, tankless water heaters deliver a constant supply of hot water—you don't need to wait for a storage tank to fill up with enough hot water.
Tankless systems can be either "coil" or "no coil.” While "no coil" units can be very efficient, tankless coils can be one of the least efficient ways to heat domestic hot water and are no longer allowed under Vermont’s Building Energy Standards. More information on the Vermont Building Energy Standards is available on the Department of Public Service main website.
Typically, "no coil" tankless water heaters provide hot water at a rate of 2–5 gallons per minute, with gas-fired units producing higher flow rates than electric ones. Sometimes, however, even the largest gas-fired model cannot supply enough hot water for simultaneous, multiple uses in buildings. For example, taking a shower and running the dishwasher at the same time can stretch a tankless water heater to its limit. To overcome this problem, you can install two or more tankless water heaters, connected in parallel, for simultaneous demands of hot water. You can also install separate tankless water heaters for appliances that use a lot of hot water, such as a dishwasher.
Tankless water heaters can avoid the standby heat losses associated with storage water heaters. However, gas-fired tankless water heaters can waste energy if they have a constantly burning pilot light. This can sometimes offset the elimination of standby energy losses, when compared to a storage water heater. In a gas-fired storage water heater, the pilot light heats the water in the tank, so the same energy isn't wasted.
The cost of operating a pilot light in a tankless water heater varies from model to model. You may want to ask the manufacturer or installer how much gas the pilot light uses for the model you're considering. If you purchase a model that uses a standing pilot light, you may be able to turn it off when it's not in use to save energy. You may also want to consider models that have an intermittent ignition device (IID), instead of a standing pilot light. This device resembles the spark ignition device on some gas kitchen ranges and ovens.
On-demand, no coil water heaters can be more efficient than conventional storage tank water heaters. ENERGY STAR® models are available (except electric resistance)
Tankless water heaters typically have a longer life expectancy than storage tank heaters and have easily replaceable parts that can extend their life by many years
The heating units can be more compact than storage tank systems
Models are available for a variety of fuels
The initial cost of a tankless water heater can be greater than that of a conventional storage water heater
Gas-fired tankless water heaters can waste energy if they have a constantly burning pilot light, which may offset the energy savings achieved by not having standby energy losses
Electric units may not supply enough hot water to meet typical routines and several units may be needed
Visit the pages below to learn more about different types of Hot Water systems: