How Does a Tankless Hot Water Heater Work?

  • December 29, 2022
  • By MR COOL

Tankless hot water heaters provide hot water on demand rather than heating and storing it for later use. With a tankless system, you can enjoy nearly endless hot water because it doesn’t rely on a stored supply. A tankless water heater operates efficiently, saving families money on energy and water bills. If you want to upgrade your water heater system, continue reading to learn about tankless water heaters and how they work.

Types of Water Heaters

Water heaters provide the hot water necessary for various purposes and appliances such as dishwashers and hot showers. Families can choose between various water heater types:

Conventional Storage

A conventional storage tank water heater is a common type of water heater. It features an insulated water tank that heats and holds hot water until a household uses it. The tank’s capacity determines how much water a household has available at one time. Once a home’s residents use the tank’s available water, they must wait until the tank fills again to use hot water. 

Heat Pump

A heat pump water heater is also known as a hybrid water heater, and it uses heat in the ground and air to heat water. Instead of using electricity to generate heat, a heat pump water heater only needs electricity to move heat from the air and ground to the water.


Solar-powered water heaters are energy-efficient systems that operate on energy from sunlight. They draw energy from solar panels on a home’s roof and transfer it to a closed-loop system that heats water using a heat-conductive material. 


A condensing water heater heats water using a home’s unused gas fumes. It funnels heated exhaust from the home’s natural gas system through a coil on the bottom of the water tank. This heats the water using little energy since the gas is already used for other purposes within the home before it heats the water. 


Tankless water heaters use heated coils instead of tanks to provide homes with hot water. A tankless water heater uses modern technology to provide households with almost endless hot water. Tankless water heaters are not limited by a certain capacity because their heated coils heat water on demand. Tankless water heaters are excellent for families who want to save water and energy while having access to hot water when they need it. 

How Are Tankless Hot Water Heaters Unique?

Tankless water heaters are unique because they heat water while it flows through pipes instead of storing hot water for later use. Since they heat water instantly rather than storing and keeping it warm, tankless water heaters use less energy than traditional hot water heaters, saving families money on their energy bills. 

How Does a Tankless Water Heater Work?

A tankless heater can provide water on demand because it heats water when you need it. When you turn on a faucet or the shower, the tankless system detects water movement in the hot water lines and activates the heat exchanger to apply heat. Tankless systems are not instantaneous water heaters, but they do heat water quickly. The system heats water within 15 seconds, sends the hot water to the faucet you’re using and continues to heat water as long as you use it.

How Does a Tankless Hot Water Heater Ignitor Work?

In a tankless water heater, a heat exchanger heats water as cold water flows through it. Internal sensors detect water flow and ignite the gas burner or activate the system’s electrical element. The gas or electric element heats the water as it flows through the heat exchanger, and the heat source turns off when you turn the tap or appliance off.

How Do Tankless Water Heaters Measure Water and Regulate Temperature?

Tankless hot water heaters measure water flow in gallons per minute (GPM), which quantifies the hot water steady flow rate a heater can produce. Homeowners can add the GPMs they plan to use for their appliances and fixtures at the same time to determine their home’s necessary flow rate. 

The colder your home’s incoming ground water temperature is, the higher your tankless water heater will need to raise its temperature to provide comfortable hot water. To determine what temperature your system will need to heat your water, you must consider your region’s average groundwater temperature. 

First, determine your area’s coldest possible groundwater temperature. You can then subtract the expected groundwater temperature from your desired hot water temperature to determine your water heater’s ideal heating temperature. Most households need their systems to heat their water to about 100 to 115 degrees Fahrenheit. 

Types of Tankless Hot Water Heaters

Tankless water heaters have various flow rates, maintenance and energy costs and energy savings based on their fuel type. Homeowners can also choose between three different types of tankless water heaters — condensing, non-condensing and hybrid. 

How Does a Natural Gas Tankless Hot Water Heater Work?

Tankless gas water heaters operate on natural gas. They typically produce more hot water than electric tankless heaters, making them an excellent choice for larger families that use large amounts of water. Installing a gas-powered tankless water heater may be more complex and have a higher cost than installing an electric tankless water heater because most homes need a plumbing reconfiguration to accommodate a tankless gas water heater. 

How Does an Electric Tankless Hot Water Heater Work?

Electric tankless water heaters operate on electricity, and they are typically easy to install. They are also easy to maintain, but most of them can only power one outlet at a time. Electric tankless heaters are not as energy-efficient as gas-powered tankless heaters, but they are a good option for families that don’t use natural gas.

How Does a Condensing Tankless Water Heater Work?

Condensing tankless water heaters heat water using multiple heat exchangers. The heat exchangers trap the exhaust that the first heat exchanger produces, making a condensing tankless heater more energy-efficient than a non-condensing tankless heater. 

How Does a Non-Condensing Tankless Water Heater Work?

A non-condensing tankless water heater uses one heat exchanger to heat water. It produces a hot exhaust that must be released outdoors, requiring a vent that directs it outside the house. Due to the necessary vent, non-condensing tankless heaters typically cost a little more than condensing tankless water heaters.

How Does a Hybrid Tankless Water Heater Work?

Hybrid tankless water heaters contain a small tank and heat water by pulling heat in from the air outside the tank. Hybrid models are typically more efficient than condensing and non-condensing tankless water heaters because they use less energy, but they have a slightly higher cost. A hybrid system can only function when its tank is surrounded by open air, so homeowners may need to expand their storage space when they install a hybrid model.

Do Tankless Hot Water Heaters Run Out of Hot Water?

A tankless water heater can become overwhelmed under certain circumstances. You can count on having a continuous flow of hot water for a long, relaxing shower, but using hot water in multiple faucets at one time may be too much for some systems. Choosing the right size water heater for your home is extremely important.

Can a Tankless Water Heater Provide an Endless Supply of Hot Water?

A tankless water heater will not run out of water, but a high demand can overwhelm it. Using hot water in a single appliance or the shower will not overwhelm the system, but using it in multiple taps at the same time can deplete the system’s power so it struggles to keep up. When a tankless heater becomes overwhelmed, it may take slightly longer to heat the water initially. You can avoid overwhelming your tankless water heater by calculating your maximum hot water demand. 

You can calculate the GPM of hot water your household typically uses during peak times to help you purchase the right size tankless system. Installing two or more tankless systems can also prevent system overwhelm for families who expect to frequently use hot water for multiple purposes at the same time. 

How Many Showers Can a Tankless Hot Water Heater Support?

A tankless water heater can provide hot water at a flow rate equal to or below the system’s maximum flow rate. If a household has a water heater with a 4 GPM flow rate, the heater can supply hot water for a shower and one appliance at the same time. A heater with an 8 GPM flow rate can typically support up to two showers and one appliance simultaneously.

It’s also important to consider a system’s British thermal unit (BTU), which measures how much energy a tankless water heater requires to raise water temperature by one degree Fahrenheit. A heater with a high BTU can supply hot water for more bathrooms and appliances than a heater with a lower BTU.

Larger families that expect to use multiple showers at once may not benefit from a tankless water heater as much as smaller families. Calculating your home’s GPM and a tank’s BTU can help you determine if a tankless water heater is right for you.

How to Maintain a Tankless Hot Water Heater

Tankless water heaters require less maintenance and replacement parts than conventional water heaters. However, you should still take measures to maintain a tankless water heater and prolong its life span. To care for your tankless water heater, you must complete the following tasks:

  • Clean the water line filter: Most tankless water heaters contain a water line filter that protects the system from sediment, scale and hard water. These contaminants can damage the system if they build up, so it’s important to clean or replace your water filter according to your heater’s user manual.
  • Clean the air filter: If you have a natural gas tankless water heater, it may contain a filter between its fan and the air intake pipe. Insects, dirt and debris can clog this filter over time, disrupting the heater’s airflow. Clean the air filter regularly to prevent clogging.
  • Descale and flush the system: Calcium and lime deposits can accumulate in a tankless water heater system over time. Descaling and flushing your system once a year can remove harmful deposits from your system.

Cleaning a system’s water line filter and the air filter is a simple process, but you may need to schedule professional maintenance for descaling and flushing the system if unfamiliar with the process. It’s also important to schedule annual maintenance for your tankless water or service it twice per year if you have hard water. 

Tankless Hot Water Heating Troubleshooting

While tankless water heaters require less maintenance than traditional water heaters, they can still require some troubleshooting on occasion. Consider some helpful troubleshooting tips for the following situations:

Low Hot Water or System Shut-Down

Your tankless water heater may struggle to provide hot water or shut down completely if your household overloads it. If this occurs, limit simultaneous applications to decrease your demand for hot water and reset your system. If this occurs frequently, consider purchasing a second tankless water heater or upgrading your current system.

Random Cold Water 

You may experience a random period of cold water that lasts several seconds if you use hot water shortly after another person or appliance in the home uses hot water. This is because a tankless hot water heater will release any hot water trapped in the pipes before heating new hot water. 

If you start a shower with hot water that turns cold for a short time, you are receiving the water that was trapped in the pipes. This does not indicate any issues or needs for repairs, so you can wait for the cold water to pass before entering the shower or using an appliance.

Blocked Air Supply or Exhaust

If your tankless water heater displays an error code regarding your system’s air supply or exhaust, there may be a complication with its combustion air or venting. If this occurs, check your heater’s vent pipes for any holes or connection gaps. You should also check your heater’s manual to make sure your system meets clearance requirements. A tankless water heater needs adequate space for proper venting, so it’s important to check for any objects or animal nests that may be blocking your system’s air supply. 

Ignition or Flame Failure

A tankless water heater may fail to ignite if there is an issue with the gas supply. You may need to fill your propane tank, but you can also check your water valve and gas valves if your propane tank is already full. Each valve should be fully open. If these solutions don’t work, you may need to call a technician to repair your ignition pack or address larger complications.

Filling your propane tank and checking your valves can also resolve a flame failure. However, you may need to call a technician to install a larger gas line or address complications such as venting, combustion or regulator issues. 

Who Should Get a Tankless Hot Water Heater?

Tankless water heaters are an excellent option for many households. You can benefit from a tankless water heater if you want to use less energy and water while maintaining your comfort. You should consider upgrading to a tankless water heater if your home can support a tankless heater’s electrical needs and your household uses a low to moderate amount of hot water at a time. 

Where Can I Find a Tankless Water Heater?

Our very own tankless water heater is coming soon! This unit can support up to four home appliances at the same time, and it gives you consistent water temperatures throughout the year, even when it’s freezing outside! This water heater can run off of gas or propane. Its 15-year heat exchanger warranty, 5-year parts warranty, and 5-year limited labor warranty will ensure that your water stays as warm as you need for as long as you need!

Find more information on our new tankless water heater here, or call us at 270-366-0457. You can also send us an email on our contact page.

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