Tankless water heaters (also known as on-demand or instant heaters) are more expensive than most other water heaters, as is their installation. However, they are usually the most efficient. Savings may be in the area of 30% compared to a standard natural gas hot water heater. Demand heaters have been used in Europe for many years. The heater must be properly sized, according to household occupancy and usage. If too small, hot water service may be unsatisfactory. Evaluate your family's hot water demands to see if showers, dishwashing, laundry, etc. occur simultaneously. Discuss this with the dealer to determine the best size. The greater the capacity, the more expensive it is. Heaters large enough to fill a spa may be prohibitively expensive. These appliances virtually eliminate 'standby' heat losses. Gas models still require venting to the outside. However, because of their small size, they can be located in areas where standard water storage tanks could not, such as a crawl space. Venting can go directly through the crawl space wall to the outside. The projected life of a tankless hot water heater is approximately 20 years, whereas a standard water storage tank heater is 10-12 years. It is important to have a professional perform maintenance on the unit annually to ensure it is working properly and to extend the life of the water heater. As when making any long term appliance purchase, consumers considering demand heaters need to investigate specific details carefully before they buy. The U.S. Department of Energy has more information about tankless water heaters.

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