Tankless and Demand Water Heater Overview 
For Electric & Natural Gas Customers

Tankless water heaters, also known as demand water heaters, heat water directly without the use of a storage tank. Water flowing through a large coil is heated only on demand by either gas or electricity. There is no storage tank to continuously maintain hot water. The technology is limited on the number of water fixtures it can supply with hot water at the same time. For example, a person taking a shower could experience a very short blast of cooler water if another person or appliance requires hot water. The cool blast of water is a result of the low water flow safety built in to the heater. When flow is restricted either by additional demand from another source or a plugged faucet or shower, the heater is designed to safely shut off the fuel to prevent overheating the unit allowing little or no water flow. 
How They Work
Tankless or demand type water heaters avoid standby heat losses associated with storage water heaters. When hot water is turned on, cold water is signaled to start flowing into the tankless water heater where the water is heated by either a gas burner or an electric element. However, a demand water heater's output limits the flow rate.
Typically, demand water heaters provide hot water at a rate of 2-5 gallons per minute and gas-fired demand water heaters produce higher flow rates than electric ones. However, even the largest, gas-fired model cannot supply enough hot water for simultaneous multiple uses in large households or business applications. Taking a shower and running the dishwasher at the same time can stretch a demand water heater to its limit. To overcome this problem, you can install two or more demand water heaters connecting them in parallel for simultaneous demands of hot water. You may also want to install separate demand water heaters for appliances - such as a clothes washer or dishwater - that use a lot of hot water in your home.
Additional Information
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