Tankless Water Heater

A tankless water heater uses a heat exchanger (gas or electric) to rapidly warm incoming cold water to setpoint temperature as it passes through, then delivers it directly to the fixture. There's no stored hot water sitting in a tank losing heat, so they're more efficient than tanks and take up less space. The trade-off is flow rate—most units max out around 5–8 GPM depending on fuel type and incoming water temp, so simultaneous high-demand loads (shower plus washing machine) can drop the outlet temp noticeably.

In the field, these require proper gas sizing for condensing models, venting (especially important with condensing units, which produce acidic condensate), and sometimes whole-house recirculation pumps if the unit sits far from the fixture. Water quality matters too—hard water and mineral buildup kill the heat exchanger faster than in a tank. Outlet temp can lag a few seconds on startup, and some models hunt for their setpoint, which annoys homeowners used to instant hot water.

Common in small homes, renovations, and point-of-use applications where a tank doesn't fit. Electricians and plumbers both need to be involved because the gas and electrical specs are tight, and installation costs run high compared to a standard tank. Not a drop-in replacement—vent, gas line, and water piping often all change.