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October 17, 2022

How Does Tankless Water Heater Work?

How Does Tankless Water Heater Work? - LG Home Comfort

A water heater is necessary for every home as it provides hot water for cleaning, cooking, and other purposes. There are two types of water heaters available in the market: tankless and storage tank water heaters. So, is a tankless water heater better than the other?

Read on to find out more.

What Is a Tankless Water Heater?

A tankless water heater doesn’t have a storage tank. It heats water as needed and provides a continuous hot water supply. Also referred to as an on-demand or instant hot water heater, this is more energy-efficient than storage tank water heaters as they don’t store hot water.

How Does Tankless Water Heater Work?

Water is instantly heated using tankless water heaters without the requirement of a storage tank. They have a heating element (usually gas or electric) activated when the hot water tap is turned on. After the gas burner or electricity begins heating the water, it circulates around the heat exchanger. This, in turn, raises the water temperature to the desired level and sends it to the fixtures.

For instance, you need to use hot water for a morning shower. The water heater will start supplying hot water when you turn on the shower. The cold water that enters the system is quickly heated and supplied to you. This process continues as long as you need hot water. Once you turn off the shower, the heating element shuts down automatically.

Tankless Water Heaters Pros and Cons

Like other home appliances, tankless water heaters have their own pros and cons that you should be aware of before making a purchase.

Here’s a summary:


  • You can save money in the long run as they are more energy-efficient than storage tank water heaters because they only heat water when needed.
  • They have a longer lifespan as they don’t have the corrosion common in storage tank water heaters.
  • You can have an unlimited supply of hot water as they can supply a continuous flow of hot water.
  • They take up less space as they are compact and can be installed on the wall.
  • Most tankless water heaters have longer warranties.


  • The tankless water heater’s initial cost is higher than storage tanks or traditional water heaters.
  • They require more maintenance as they have more parts that can break down.
  • There is a possible temperature inconsistency in the hot water supply when multiple faucets are running at the same time.
  • They cannot provide hot water if there is a power interruption.
  • Your home may need major changes in the plumbing system and follow local building codes to accommodate a tankless water heater.

How Much Is a Tankless Water Heater?

This depends on the brand, type (electric or gas), and capacity. But the average cost of tankless water heaters is around $3,000. This is just an estimate and can go lower or higher. Also, as mentioned, you can save money on your energy bill in the long run because you only use the unit when you need it.

Contact a local contractor near you to get a more accurate estimate for your home.

Is Tankless Water Heater Worth It?

This depends on your specific needs and budget. If you are looking for an energy-efficient unit with a longer lifespan, then a tankless water heater may be worth the investment. Also, the tankless water heater advantages outweigh the disadvantages if you don’t mind spending a little more upfront and doing regular maintenance.

However, a storage-tank water heater might be a better option if you work with a tight budget. If you are still undecided, consult with a contractor who can help you choose the best choice for your home.

Tankless Vs. Tank Water Heaters

In contrast with tankless water heaters, tank water heaters store hot water until you need it. They are less expensive upfront and are easier to install. However, they are less energy-efficient than tankless water heaters and have a shorter lifespan.

Tankless and storage tank water heaters share similarities. These include the potential mineral buildup. This happens when water evaporates and leaves minerals behind, which can clog your pipes. This is why you should regularly monitor and descale your tankless or storage tank water heater every few years.

Here’s a quick overview of the pros and cons of these types of water heaters in comparison with on-demand:


  • More affordable upfront
  • Easy to install
  • Can heat water even during power outages


  • Not as energy-efficient
  • Shorter lifespan
  • Takes up more space
  • It may not be able to meet the high demand for hot water
  • There could be a water leak if it’s not properly installed

How to Choose the Right Tankless Water Heater

If you finally decide to get a tankless water heater for your home, here are a few guidelines you can consider to help you choose the right one:

  • Gas or electric tankless water heaters

You first need to decide whether you want a gas or electric tankless water heater. If your home doesn’t have a natural gas line, then your only option is an electric unit. However, if you have a natural gas line, you have to decide which is more economical: natural gas or electricity. Typically, natural gas is cheaper than electricity, but this can vary depending on your location.

  • Size

Tankless water heaters are available in various sizes. The one you need will depend on your hot water requirements. You can get away with a smaller unit if you have a small home with only one or two people. But if you have a larger home or family, you will need a bigger unit. Sometimes, homeowners with large houses install two separate heaters with different units.

  • Energy Efficiency

There are two tankless water heater types: standard and condensing. Standard units are less expensive but are not as energy-efficient as condensing units. If you want energy savings, you may choose the condensing one.

  • Installation

Tankless water heaters can be installed either indoors or outdoors. If you decide to install it outdoors, you must consider the weather in your area. If you live in an area with cold winters, you must get a unit that can withstand the cold weather. Conversely, if you live in a hot climate, then you have to get a unit that can handle the heat.

  • Water Pressure

Another thing to consider is the water pressure in your home. Tankless heaters require a minimum water pressure of 15 to 150 pounds per square inch (psi). If your home doesn’t have enough water pressure, you must install a booster pump.

  • Water flow rates

Tankless water heaters have a maximum flow rate, usually from 0.5 to 0.7 gallons per minute (GPM). If you exceed this, the unit will shut off. So, you need to know the flow rates of your fixtures (showerheads, faucets, etc.).

The Bottom Line

Hot water tank vs. on-demand water heater is a common question among homeowners. However, the answer to this question depends on your specific needs and budget. If you are seeking ways to save energy, a tankless unit may be worth the investment as they are also more long-lasting.

They may have drawbacks, but the benefits outweigh them. On the other hand, if you have a tight budget, you may go for a storage-tank water heater. If you are still undecided, consult a contractor who can help you choose the best option for your home.

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