You could save up to 60% on your monthly water heating costs by installing a tankless water heater in your home. A tankless water heater is a demand-type unit. This means that it operates ONLY when hot water is drawn in your home. The opposite is true of conventional tank-type heaters. In a conventional heater, water is stored in its tank and kept heated continuously, whether you are asleep, at work or away on a vacation. This is a surprising realization to many homeowners, but it is a fact.

Tankless water heaters, also called combination, instantaneous, continuous flow, inline, flash, on-demand or instant-on water heaters, are gaining in popularity. The chief advantages of tankless water heaters are a continuous flow of hot water and the saving of energy, thereby reducing your monthly energy bill. These water heaters heat the water as the water flows through the device. They do not retain any water internally except for what is in the heat exchanger coil.

There are tankless water heater systems that work at the point of use, such as under your kitchen or bathroom sink. Also, there are larger units that serve multiple plumbing fixtures, even your entire house. A tankless water heater can also be used as a booster for dishwashers, washing machines, and as a backup for solar or wood-fired domestic systems.

Although gas-fired demand water heaters tend to have higher flow rates than electric ones, they can waste energy if they have a constantly burning pilot light. This can offset some of the energy savings. Moreover, much of the heat produced by the pilot light of a tank-type model heats the water in the tank, a savings that is just lost with the instantaneous units.

If you purchase a model that uses a standing pilot light, you can always turn it off when it's not in use to save energy. Alternatively, you can purchase a model with an intermittent ignition device. This resembles the spark ignition device on some gas kitchen ranges and ovens. You should check with the manufacturer for models that have this feature.

Tankless water heaters are more efficient than tank water heaters, but reviews say they take some getting used to. If you want to switch to a more efficient tankless water heater, be aware that you'll need some time to adjust, since water delivery is different than with a tank water heater. Since tankless systems don't start heating water until you turn on the tap, there is a delay of about 3/4 gallon before the water runs hot.

Flow rate of hot water from a tankless system is greatly affected by the temperature of your groundwater. The warmer your groundwater, the better the flow rate. Homes in colder climates will need a larger system to get an adequate hot-water flow rate. The average groundwater temperature in the U.S. is about 50? Fahrenheit. Most people like shower temperatures of between 105? and 120?, so your groundwater temperature would need to be raised by 60? to 75?.

You can check online for reviews of tankless water heater systems, and then decide if it is the right fit for you and your lifestyle.