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ABCs of Water Heating with a Tankless Heater

How Tankless Heaters Work:

• When a hot water tap is opened, the cold water enters the heater and triggers the heating elements or burners to turn on. Your hot water tap acts as an ignition key for the energy used to heat the hot water you need.
• The water is then heated as it flows through the heating elements or heat exchanger.
• As you change the water flow, a water valve or thermostat controls the heating elements or burner flame to maintain a constant temperature. The amount of energy used is always proportional to the volume of hot water being used.
• The water temperature can be adjusted to produce outlet temperatures ranging from 100° to
  140° F.
• When the hot water tap is turned off, the system shuts down.

How a Traditional Tank Heater Works:

• When a hot water tap is opened, heated water is drawn off the top of the tank. Cold water is fed into the bottom of the tank to replace the outgoing hot water.
• The incoming cold water triggers the tank's electric heating element, a gas burner or an electrical coil.
• The water is heated for as long as necessary to bring the entire tank back up to the preset temperature.
• If demand surpasses the tank's storage capacity, you must close the tap and wait until the tank reheats all the water.
• Stored hot water loses heat through the side walls and up the flue pipe (if it's a gas heater). As the water temperature drops, the heater kicks on to reheat the water again over and over.
• Overall, a very inefficient system.

Your water heater is the second biggest consumer of energy in your home after home heating. Therefore, it is where you can significantly reduce the costs of your annual energy consumption. Why keep a storage tank full of hot water 24 hours a day when the average household use is less than one hour every day?

When water is heated in a tank the inside walls will soon begin to build up mineral deposits. The scale build-up on the bottom of the tank can cause it to decrease efficiency by as much as 50% over 10 years and the subsequent corrosion of the tank's inside wall will eventually cause it to leak. Compare this to a tankless water heater which does not store water and maintains its efficiency for the lifetime of the unit.

Information Source: Bosch Water Heating