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Tankless water heaters fit in tight spots, such as this indoor closet. Photo courtesy Controlled Energy Corp.


Tankless water heaters -- also called demand water heaters -- are common in Japan and Europe where energy prices are historically high. They began appearing in the United States about 25 years ago. Unlike "conventional" tank water heaters, tankless water heaters heat water only as it is used, or on demand. A tankless unit has a heating device that is activated by the flow of water when a hot water valve is opened. Once activated, the heater delivers a continuous supply of hot water. The thermal output of the heater, however, limits the rate of the heated water flow. As a result, tankless water heaters may not be suitable for all residential or commercial water heating applications. This Builders Websource Tech Note reviews tankless hot water systems and provides comparisons between various manufacturers.

Table of Contents

Special Notes
This Builders Websource Tech Note has been adapted, edited and revised from the Energy Efficient and Renewable Energy Network, U.S. Department of Energy as well as manufacturer specification and installation manuals.

Water heating accounts for 20-25% of an average household's annual energy expenditures. The yearly operating costs for conventional gas or electric storage tank water heaters average $200 to $800, respectively. Storage tank-type water heaters raise and maintain the water temperature to the temperature setting on the tank (usually between 120°-140°F (49°-60°C). The heater does this even if no hot water is drawn from the tank (and cold water enters the tank). This is due to standby losses -- defined as the heat conducted and radiated from the walls of the tank-and in gas-fired water heaters-through the flue pipe. These standby losses represent 10% to 20% of a household's annual water heating costs. One way to reduce this expenditure is to use a tankless water heater (also called "demand" or "instantaneous") water heater.

Gas and Electric Tankless Water Heaters

Tankless or demand water heaters are available in propane (LP), natural gas, or electric models. They come in a variety of sizes for different applications, such as a whole-house water heater, a hot water source for a remote bathroom or hot tub, or as a boiler to provide hot water for a home heating system. They can also be used as a booster for dishwashers, washing machines, and a solar or wood-fired domestic hot water system.

You may install a demand water heater centrally or at the point of use, depending on the amount of hot water required. For example, you can use a small electric unit as a booster for a remote bathroom or laundry. These are usually installed in a closet or underneath a sink. The largest gas units, which may provide all the hot water needs of a household, are installed centrally. Gas-fired models have a higher hot water output than electric models. As with many tank water heaters, even the largest whole house tankless gas models cannot supply enough hot water for simultaneous, multiple uses of hot water (i.e., showers and laundry). Large users of hot water, such as the clothes washer and dishwasher, need to be operated separately.

Alternatively, separate demand water heaters can be installed to meet individual hot water loads, or two or more water heaters can be connected in parallel for simultaneous demands for hot water. Some manufacturers of tankless water heaters claim that their product can match the performance of any 40 gallon (151 liter) tank heater.

Selecting a Demand Water Heater
Select a demand water heater based on the maximum amount of hot water required to meet your peak demand. Use the following assumptions on water flow for various appliances to find the size of unit that is right for your purposes:

Flow Comparison

0.75 gallons (2.84 liters) to 2.5 gallons (9.46 liters) per minute
Low-flow showerheads
1.2 gallons (4.54 liters) to 2 gallons (7.57 liters) per minute
Older standard shower heads
2.5 gallons (9.46 liters) to 3.5 gallons (13.25 liters) per minute
Clothes washers and dishwashers
1 gallon (3.79 liters) to 2 gallons (7.57 liters) per minute

Unless you know otherwise, assume that the incoming potable water temperature is 50°F (10°C). You will want your water heated to at least 120°F (49°C) for most uses, or 140°F (60°C) for dishwashers without internal heaters. To determine how much of a temperature rise you need, subtract the incoming water temperature from the desired output temperature. Assuming a 120°F target temperature, in this example, the needed temperature rise is 70°F (39°C).

List the number of hot water devices you expect to have open at any one time, and add up their flow rates. This is the desired flow rate for the demand water heater. Select a manufacturer that makes such a unit. Most demand water heaters are rated for a variety of inlet water temperatures. Choose the model of water heater that is closest to your needs.

As an example, assume the following conditions: One hot water faucet open with a flow rate of 0.75 gallons (2.84 liters) per minute. One person bathing using a shower head with a flow rate of 2.5 gallons (9.46 liters) per minute. Add the two flow rates together. If the inlet water temperature is 50°F (10°C), the needed flow rate through the demand water heater would need to be no greater than 3.25 gallons (12.3 liters) per minute. Faster flow rates or cooler inlet temperatures will reduce the water temperature at the most distant faucet. Using low-flow showerheads and water-conserving faucets are a good idea with tankless water heaters.

Some types of tankless water heaters are thermostatically controlled. They can vary their output temperature according to the water flow rate and the inlet water temperature. This is useful when using a solar water heater for preheating the inlet water. If, using the above example, you connect this same unit to the outlet of a solar system, it only has to raise the water temperature a few degrees more, if at all, depending on the amount of solar gain that day.

Demand water heaters generally cost more than conventional storage tank-type units. Small point-of-use heaters that deliver 1 gallon (3.8 liters) to 2 gallons (7.6 liters) per minute sell for about $200. Larger gas-fired tankless units that deliver 3 gallons (11.4 liters) to 5 gallons (19 liters) per minute cost $550-$1,000 or more.

The appeal of tankless water heaters is not only the elimination of the standby losses and the resulting lower operating costs, but also the fact that the heater delivers hot water continuously. Gas models with a standing (constantly burning) pilot light, however, offset the savings achieved by the elimination of standby losses with the energy consumed by the pilot light. Moreover, much of the heat produced by the pilot light of a tank-type water heater heats the water in the tank; most of this heat is not used productively in a demand water heater. The exact cost of operating the pilot light will depend on the design of the heater and price of gas, but could range from $12 to $20 per year or more. Ask the manufacturer of the unit how much gas the pilot light uses for the models you consider. It is a common practice in Europe to turn off the pilot light when the unit is not in use.

An alternative to the standing pilot light is an intermittent ignition device (IID). This resembles the spark ignition device on some gas kitchen ranges and ovens. Not all demand water heaters have this electrical device. You should check with the manufacturer for models that have this feature. Some models use batteries to trigger the IID, wheras others require an permanent electrical source.

Life Expectancy and Maintenance
Most tankless models have a life expectancy as long as 15 to 20 years. In contrast, storage tank water heaters last 5 to 15 years. Most tankless models have easily replaceable parts that can extend their life by many years more.

Depending on your water conditions, periodic maintenance is required. For example, many units incorporate a water inlet filter. This inlet filter must be periodically inspected and cleaned to ensure optimum flow and efficiency. In addition, some manufacturers recommend that the heat exchanger be cleaned and "descaled" to clear out any build-up of mineral deposits. Failure to descale the heat exchanger can result in premature failure and gradual loss of heating efficiency and flow volume.


Inside view of the Aquastar tankless heat exchanger, courtesy Bosch, Inc.

Tankless Gas Water Heater Comparison
The following table compares several popular brands of gas demand water heaters. Gas heaters tend to be more common for larger flow rates, while electric heaters are great for remote fixtures with modest flow rate requirements. Contents
Vendor Aquastar Aqua
Myson Paloma Vaillant Bradford White
170 125 38 42 325 PH24 PH16 PH12 PH6 325 PM 1000
(1,000 BTU)
165 125 38.7 126
(116 LP)
100 178 121 89.3 43.8 100 125
Flow Rates at 110° (GPM)
4.5 3.2 .9 3.2 2.6 4.7 3.0 1.8 1.0 2.0 3.2
Vent Size
6" 5" 3" 5" 5" 7" 6" 5" 4" 5" 6"
Optional Power Vent
Y Y Y Y Direct Y Y Y Y Y Direct
Thermo- static Control
Temp Adjustable
Shipping Weight (lbs.)
70 43 18 58 49 82 70 40 20 38 57
2 yrs Parts 10 yrs Heat Exch 2 yrs Parts 10 yrs Heat Exch 1 yr Parts 5 yrs Heat Exch 1 yr Parts 5 yrs Heat Exch 1 yr Parts 10 yrs Heat Exch 1 yr Parts
5 yrs Heat Exch
Toll Free Service
Built In Flow Control For Steady Outlet Temp

Source: http://www.jademountain.com/

Sizing Guide Example
Using the above chart as an example, the following table illustrates the suitability of specific models within a given brand based on simultaneous usage requirements. This table is based on the Aquastar brand from Bosch.



Model 38
Model 125
Model 170
Venting (dia.)
3" 5" 6"
One sink (1 gpm)
yes yes yes
Two sinks (2gpm)
no yes yes
no 3 gpm yes 4 gpm yes
Two showers (same time)
no no 2 gpm yes
Bath tub
yes-slowly yes yes
Washing machine
no yes yes
no yes yes
Whirlpool bath
no yes yes



Takagi builds a leading Japanese-made gas demand water heater which is now available in the US and other parts of the world. The following table compares the original Takagi Flash Heater T-K1 to the latest Mobius model. The Takagi Mobius is capable of producing a rate of flow approaching 10 GPM, making it ideal for central water heating. Note that with most gas-supplied demand heaters, significant input BTU is required to ensure proper and safe operation. As a result, gas lines must be properly sized to supply the required volume and pressure. Depending on the run length from the gas meter to the heater, the gas supply line may range from a minimum of 3/4" to 1-1/4" or more. Failure to properly size the gas supply will starve the unit of fuel, leading to an inefficient and potentially dangerous operating condition.
Tankless Water Heater Takagi FLASH Model T-K1 Takagi MOBIUS Model T-M1
Power Input 
Natural Gas; 37,000-165,000 BTU 
Propane Gas ; 35,000-165,000 BTU 
Natural Gas; 25,000-235,000 BTU 
Propane Gas ; 25,000-225,000 BTU 
Thermal Efficiency 
Max. 82.3% Natureal Gas,
Max. 84.7% LPG
Max. 83% Natureal Gas,
Max. 85% L.P.
First Hour Rating 
Over 216 Gallons per Hour  Over 300 Gallons per Hour 
Energy Factor
Natural Gas: 0.81, Propane Gas: 0.84 Natural Gas: 0.82, Propane Gas: 0.84
4" Standard round, Built in standard power vent system
Gas Connections 
3/4 " Male NPT 
Water Connections 
3/4 " Male NPT 
Water Pressure 
Min. 15 Psi , Max. 150 Psi 
Natural Gas Inlet Pressure 
Min. 6.5 " wc , Max. 10.5 " wc  Min. 5.0 " wc , Max. 10.5 " wc 
Propane Gas Inlet Pressure 
Min. 11 " wc , Max. 14 " wc 
Gas Supply Diameter (to meter).
3/4" <20 ft.
1" <20-80 ft.
1-1/4" <80-300 ft.
Note, excludes other loads
Minimum Flow to Activate Burners 
3/4 gpm
Maximum Hot Water Out Flow 
5.3 gpm 9.6 gpm
24.5" x 16.5" x 8.3"  24." x 18" x 9" 
Net Weight 
60 lb.  70 lb. 
Electrical Supply 
120 V , 60 Hz with Maximum 0.8A

Source: http://www.takagi-usa.com/

Electric Tankless Heaters
Whole house electric demand water heaters are best when there is no natural gas or LP available. Since electric demand heaters are less powerful than their gas counterparts, flow rates are generally limited to 1-3 gpm for a typical 70 degree temperature rise. Point of use electric heaters are great for a remote faucet or bathroom where usage is minimal and the flow rate is small.

One important consideration of electric demand heaters is the available supply of electricity. Some of the larger models require as much as 120 amps, which could easily overload many household electrical panels. When installing an electric demand heater, it is essential to provide very heavy-duty branch wiring according to electrical codes, as well as proper circuit breakers designed for the load. The most powerful electric models, such as the PowerStar 28 requires 3x40a circuits.

When comparing between electric models, the key measure of performance is temperature rise. Unless otherwise stated, a 50-degree inlet water temperature is typical. Therefore, to achieve 120-degrees which is considered a minimum acceptable level, the system must be capable of providing a 70-degree temperature rise at a given flow rate. Not all manufacturers provide this data, making it harder to compare actual performance between units.

PowerStar (CEC)
Model Number
19T 28T 110 145 165 180 220
208-240 VAC 208-240 VAC
Circuit Breaker
2x40a 3x40a 1x50a 1x60a 1x70a 2x40a 2x50a
Minimum Flow Rate
0.8 gpm 0.25 gpm
Temp Rise vs. Flow Rate
2.1 gpm @ 115 deg (65 degree rise) 3.2 gpm@ 115 deg (65 degree rise) 75 deg @ 1 gpm 66 @ 1.5 gpm 75 deg @ 1.5 gpm 81 deg @ 1.5 gpm 75 deg@2 gpm
Operating PSI
info not available 5-150
99% 99.5%
Thermal Thermal/Manual
Pipe Size
1/2" 1/2" 3/4"
9"x10"x3.5" 12"x12"x3.5" 9"x12"x3" 11"x12"x3" 17.5"x12"x3"
8 lbs. 11 lbs. 8 lbs. 9 lbs. 12 lbs.
info not available UL/CSA
10 years heat exchanger
1 year parts
100% lifetime
This list does not cover all available sources of information on tankless water heaters, nor is the mention of any publication, product, service, or organization to be considered a recommendation or endorsement. This list was updated in May 1999.

"Efficiency of Tankless Domestic Water Heaters," Energy Design Update, (7:4) pp. 6-9, April 1988.

Extended Range Tankless Water Heater, J. Harris, Harmony Thermal Co., 1993. Available from National Technical Information Service (NTIS), 5285 Port Royal Road, Springfield, VA 22161, (800) 553-6847. 33 pp., $19.50, Order Number DE 93013327.

"Going Tankless," P. du Pont, Home Energy, (6:5) pp. 34-37, September/ October 1989.

"Instant Hot Water-Maybe," A. Wilson, Journal of Light Construction, (7:2) pp. 55-56, November 1988.

"Never-Ending Hot Water and Energy Savings, Too," R. Layne, Popular Science, (228:4) pp. 106-08, 150-51, April 1986.

"On-Demand Water Heaters," J. Wagner, Journal of Light Construction, (15:4) pp. 51-54, January 1997.

Performance of Instantaneous Gas-Fired Water Heaters, National Bureau of Standards, 1987. Available from NTIS, (see above). 66 pp., $27.00, Report Number PB-87200390.

"Seisco Tankless Electric Water Heater Sets New Standard," N. Nisson, Energy Design Update, (17:5) pp. 14-16, May 1997.

"Tankless Water Heaters," Consumer Reports, (51:1) pp. 53-55, January 1986.

"Targa Energy Unveils New Gas-Fired On-Demand Water Heater," N. Nisson, Energy Design Update, (17:6) pp. 13-15, June 1997.


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