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Why go Tankless? A Basic Guide to Tankless Water Heaters

If you've ever been the last one in a busy household to take a shower, you know firsthand that a traditional water heater can run out of hot water. This is because it stores water in a tank and heats it slowly, keeping it that way until you use it. There are two fundamental disadvantages to this approach: there is the possibility of running out of hot water, and keeping that water hot even when it's not needed is wasting energy. A tankless water heater solves both of these issues, saving you money on your utilities while providing unlimited hot water.

A tankless water heater produces hot water on demand. It can be powered by gas or electric and can heat anything from a remote sink to an entire household, replacing your traditional water heater entirely. These heaters are already widely used in Europe and beginning to see more use in the United States, especially in single-fixture applications where heating water on the go just makes more sense.

Table of Contents

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Features and Benefits of a Tankless Water Heater

Learn a bit more about why you should go tankless, or why tankless isn't right for you.

Sizing your Tankless Water Heater

Learn how to pick the right tankless water heater for your application.

Savings with your Tankless Water Heater

How does a tankless water heater save you money?

Installing a Tankless Water Heater

Important information about tankless water heater installation.

Shop EcoDirect's Tankless Water Heaters

EcoDirect offers a wide range of tankless water heaters.

Features and Benefits of a Tankless Water Heater

A tankless water heater offers two main benefits: endless hot water and energy savings. However, there are other reasons as well to go tankless.


  • Long term savings

    Like many renewable energy solutions, a tankless water heater does cost more initially than a tank model. In the long term, however, the heater can pay for itself through energy savings on your water heating bill. If your home uses less than 41 gallons of hot water per day, a tankless water heater can increase your efficiency by 24-34 %!

  • Unlimited Hot Water

    The amount of hot water available doesn't depend on the size of your tank, so you can never "run out" of hot water. Instead, a tankless water heater is limited by its flow rate, which is the gallons per minute (GPM) of hot water it can deliver. A gas tankless water heater offers a higher GPM than an electric one.

  • Less physical space

    Because there is no need for a tank, a tankless water heater takes up less space than a tank model.

  • Reduced risk of water damage

    Since no water is stored, there is no danger of a tank failure or rupture. Risk of water damage from pipes and fixtures, however, remains.

  • Safety

    Precise temperature control means no more sudden hot water spikes.


  • Startup Delay

    The energy-saving advantage of a tankless water heater can also be a weakness. There is a longer delay for hot water when the faucet is first turned on, since water already in the piping starts at room temperature. This can also affect intermittent-use applications such as faucets, sometimes resulting in a bit of cold water coming after an initial period of heat. This effect isn't an issue in applications like showers and dishwashers.

  • Installation Cost

    Because there are many factors that go into the installation of a tankless water heater, it can be expensive. This cost depends on whether or not you are replacing a storage water heater and your area. Installing a tankless water heater yourself is not advised, and for some manufacturers may even void your warranty.

  • Compatibility

    Tankless heaters are limited to a choice between gas and electric as a heat source, though other options are being developed. They are incompatible with passive hot water recirculation systems, and may be incompatible with active hot water recirculation systems as well.

  • Low supply pressure

    A tankless water system delivers the water pressure delivered to your property and no more.

  • Electrical Demand

    Electric tankless heaters specifically can put extra strain on electrical utilities during already high-demand times. Households using time-of-use metering must be especially careful, since using hot water during peak hours can increase operating costs over storage water heaters.

Source: Wikipedia article on water heating

Sizing a Tankless Water Heater

Tankless water heaters are rated by temperature rise at a given flow rate, so in order to select the right tankless water heater for your application, you need to know both of these.

Temperature Rise

To find your desired temperature rise, you simply subtract the temperature of the cold water going into the tankless water heater from the temperature you want your water heated to (probably 120 F). In many areas of the US, the incoming water temperature is around 50 F. See the map below for for an idea of where your ground water temperature lies.

Groundwater Temperature Map

Source: US Environmental Protection Agency

For example, EcoDirect is located in southern California. If you look at the map, this area has a groundwater temperature of 72 F. If we wanted our water heated to 120 F, we would need a tankless hot water heater that offered an appropriate flow rate at a 42 F temperature rise.

120 desired temperature - 72 groundwater = 42 temperature rise

Flow Rate

Because it is heating water as you use it, the amount of water it can heat at any one time is limited; typically, this maximum flow rate ranges from 2 - 5 gallons per minute, which needs to be considered when choosing a tankless hot water heater for an application with multiple fixtures, such as a household. Electric models tend to have a lower flow rate than gas-powered ones.

For example, if you expect to run two showers and a dishwasher at the same time, you will need a bigger tankless heater than if you are only ever going to be running a single shower at a time. Sizing your tankless water heater can be done in three easy steps:

  1. Make a list of all the household appliances and fixtures needing hot water that you might possibly be running simultaneously. For instance, maybe you will be running a shower, a dishwasher, and a sink.
  2. Write down the gallons per minute (GPM) each appliance or fixture requires. Since different pressure can result in different flow rates, your GPM may not be what is on the box. You can get the most accurate idea of the GPM of your shower or faucet by placing a container underneath to catch the water for 10 seconds, measuring the amount of water gathered, converting it to gallons, and then multiplying by six. A newer, code-compliant showerhead should come in below 2.5 GPM. An approximate household water use chart can be seen below:

    Household Water Use

    Appliance Typical Model GPM
    Shower 2.5 GPM
    Pre 1994: 3.0+ GPM
    Sink 2.5 GPM
    Pre-1994: 3.0 GPM
    Washing Machine Top Loading: 40 Gallons/Load
    Front-Loading: 20 - 25 Gallons/Load
    Dishwasher 7.0 - 10.5 Gallons/Load (2-3 GPM)

    Source: Water Audit Fact Sheet

  3. Add these numbers together. This is the total GPM you will need from your tankless water heater.

If your GPM is too high for a single tankless water heater, you can reduce it by installing low flow fixtures or install multiple heaters in series to cover the load.

Energy Savings with a Tankless Water Heater

A tankless water heater saves you money by simply eliminating standby energy loss. However, there are other things that can be done to reduce your cost even further. Not all tankless water heaters are created equally, and certain types of tankless water heaters may be more cost efficient in your area than others.

Tankless Applications

Along with your household application, a tankless water heater can be used for...

  • Remote fixtures, such as sinks and hot tubs
  • Booster for appliances like the dishwasher or washing machine
  • Booster for solar water heating

There are several different feul types that a tankless water can use. All three of the options currently offered by EcoDirect (electric, natural gas, and propane) are widely available throughout the United States. The tankless water heater that will cut your costs the most depends on your local energy cost, the efficiency of the heater, and outside factors such as pilot lights.

Local Energy Cost

This is a very straightforward factor; you can learn what type of fuel is least expensive for you with a call to your local utility.

Model Efficiency

Like solar panels, different models offer different efficiencies. As a result, even if natural gas is the cheapest fuel available in your area, a more energy-efficient electrical model could actually cost you less to run.

Outside Factors

There are other factors that should be considered when purchasing a tankless water heater. A gas tankless water heater with a pilot light, for example, can completely offset the energy savings from going tankless. Fortunately, there are easy fixes for this, such as checking how much gas your model actually uses to operate the pilot light, turning off the pilot light when not in use, or getting a model with an intermittent ignition device (IID).

If you need a very high flow rate, an electric model may not be the right choice for you. Because the flow rate of electric tankless water heaters tends to be lower than that of a gas model, it may just not make sense to go electric in certain situations.

Installing a Tankless Water Heater

Though it is possible to install your own tankless water heater, installing it properly requires taking many factors into account, such as your climate and local building code regulations. Installing your own tankless water heater can also void its warranty.