How Does a Tankless Water Heater Work?

Last Updated On January 9, 2023
how does a tankless water heater work

A tankless water heater unit is small…really small when compared to a traditional tank water heater.

So it’s not uncommon to ask ourselves, “How does a tankless water heater actually work?”

Get ready to be surprised by what these little things can and cannot do.

What's In This Guide?

      The tankless water heater allows just enough water to pass through a small heated pipe. The cold water enters the tankless hot water heater when we turn a hot faucet on in our home. 

      The water flow is then heated with burners or a heating element before it comes out of our shower, sink, or other plumbing devices calling for hot water.

      No bulky holding tank is necessary with this process because it’s not necessary for pre-heated water to be held in reserve. We can heat the exact amount of water we need on demand without wasting any unnecessary gas, electricity, or hot water. This is also how you get a hot shower in space!

      Traditional tank-style gas and electric water heaters are still widely used and will be for some time. However, tankless water heaters make for a great hot water supplement in many homes, such as under sinks or near a shower, and can even supply hot water entirely. This is especially true in off-the-grid hot water solutions. However, keep in mind that they do require maintenance.

      How a Tankless Water Heater Works: 4 Steps

      Many families are switching to the popular cost-efficient tankless water heater. You should know how a tankless water heater works and gain some tips if you install one in your home. The following guide is how a tankless water heater works in four basic steps.

      Step 1 – Hot Water Tap

      It is up to the tankless water heater to provide hot water on demand. It waits until we turn on a hot water tap at any location in the house. This will activate the flow sensor inside the water heater to start working. 

      Unlike a tank unit, you won’t wait for hot water. There might be a problem if you don’t feel water heating up quickly, or if your tankless unit is running but no hot water faucets are turned on.

      Step 2 – Flow Sensor

      A flow sensor is built inside every tankless water heater. This sensor tells the unit when hot water is on somewhere in the house. A computer inside the tankless water heater automatically ignites the burners when water is detected. 

      Step 3 – Heat Exchanger

      The heat exchanger consistently warms the water as it passes through the tankless water heater. It heats the water to the desired temperature as it passes through the small pipes inside the heat exchanger. These small pipes travel through the burners or heating element, transferring heat into the tap water.

      Step 4 –  Automatic Shut Down

      The most energy-efficient aspect of a tankless water heater is that it only runs when you have a hot water faucet turned on. 

      Every tankless water heater will automatically shut down when the flow sensor detects the hot water has been turned off. A tankless water heater should not be running if we’re not using our hot water. This is why so many homeowners love these units to save money on their utility costs and to save water in the bathroom.

      How Does a Tankless Electric Water Heater Work?

      All electric tankless water heaters work by passing the water through small pipes connected to an electrical element. This heating element warms the water as it travels through the unit. No burner or pilot light is required. 

      A tankless electric water heater can save you a fortune compared to standard tank-style water heaters. They only run power when we use our hot water instead of storing it in a large tank.

      How Does a Gas-Powered Tankless Water Heater Work?

      Like most gas appliances in our home, a gas-powered tankless water heater works by using gas burners instead of a heating element. Like electric water heaters, the heat exchanger is a small gas pipe. This pipe, however, passes through the flames on the burners. 

      A gas tankless water heater can save us more money than its electric counterparts due to the lower cost of natural gas and its speed to the desired temperature.

      Propane is the cheapest and most efficient gas we can use. Propane-powered tankless water heaters work the same way that natural gas ones do. Rerouting gas lines to our house can be costly but can save us a lot of money in our lifetime. See this post to learn more about how much propane tankless units use.

      Do You Run Out of Hot water With a Tankless Water Heater?

      Tankless water heaters provide instantaneous water on demand. They do not require a large holding tank to take up space in our home. If you’re looking to take a never-ending shower, the tankless water heater is the way to go. However, you must be realistic when choosing capacity. 

      You will need a larger unit if you have a big family. The smaller units won’t run two showers at the same time. While we can never run out of hot water with tankless heaters, they can fail to keep up with our demand when too many hot water activities are happening at once. 

      It’s a good idea to calculate the amount of water we’re using at a single time when we have a tankless water heater. Read more about water heater capacity and family size

      Did you know: You could, quite literally, never run out of hot water if you install a single-point of use tankless water heater at every hot water faucet in your house.

      did you know how a tankless water heater actually works

      How Often Does a Tankless Water Heater Run?

      A tankless water heater will only turn on when we ask it for hot water. The flow sensor will only allow water to enter the heat exchanger if it detects that hot water has been turned on somewhere in the home. 

      The burners will only heat the water while the hot water flow is turned on. We have complete control over when the hot water heater runs, so no timer is required to save on heating costs.

      It never needs to preheat gallons of water just sitting in a tank. This means you might have faulty equipment if you notice a tankless water heater running but you are not using the hot water.

      Does a Tankless Water Heater Work Better Than a Tank Water Heater?

      The water heater tank still reigns supreme in the US, but the number of tankless water heaters sold is steadily increasing. It is the dawn of the tankless water heater. Call a professional plumber today if you have questions about water heater replacement.

      The amount of energy we save is astronomical. Families and businesses are saving money every day by switching to a tankless water heater, whether gas or electric. 

      The tank-style water heaters are so large and bulky and prone to leaking. Most people are replacing their conventional water heater tanks with a new tankless water heater unit when it comes time for a replacement, evaluating the true cost.

      Doing all the math before committing to a tankless system is crucial. It’s even more important to know how a tankless water heater works. We won’t have any issues with a new tankless water heater as long as you flush and maintain it. Extra hard water can pose a challenge, tho. 

      With this guide, you can finally understand exactly how a tankless water heater works. Be sure to read out other guides to make an informed decision on which tankless unit to buy. We cover major brands and have included Rinnai reviews, AO Smith reviews, Rheem tankless, Westinghouse, and more.

      This video shows how easy it is to replace a traditional water heater with a new eco-friendly tankless water heater.

      FAQs: How Does a Tankless Water Heater Work?

      How Does a Tankless Water Heater Work? 

      Every tankless water heater has a heat exchanger. The heat exchanger is a small pipe that travels through burners. The water is heated as it travels through these thin pipes and is delivered on demand.

      Does a Tankless Water Heater Work Better Than a Tank Water Heater?

      A tankless water heater is more energy efficient than a traditional unit, but may not be able to supply the entire house with hot water simultaneously. The positive things about a tankless water heater outweigh the negative. We will save money using a tankless water heater rather than a tank water heater. 

      How Often Does a Tankless Water Heater Run?

      A tankless water heater will only run when we turn the hot faucet to the on position. A computer inside the tankless water heater will detect that we want hot water. Only then will the tankless water heater run “on demand.”

      Do You Run Out of Hot water With a Tankless Water Heater?

      The tankless water heater will never run out of hot water. It doesn’t require a large tank of water to heat at a time. A tankless water heater heats our water while the water is traveling through the unit.

      The tankless water heater will continue to provide us with hot water for as long as we have the hot water faucet turned on. However, it will not be able to heat all of the hot water demands simultaneously in a large home. Be sure to match capacity.

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      About Plumbing Navigator

      We write about "all things plumbing," helping you navigate common questions, repairs, and the best plumbing products on the market.

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      We write about “all things plumbing,” helping you navigate common questions, repairs, and the best plumbing products on the market.

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