Operating this way gives a tankless system some advantages over a conventional water heater (one with a storage tank), including:
Unlimited hot water – With a right-sized tankless water heater, hot water will flow continuously for as long as your main water line keeps feeding it.
Much greater efficiency – By working only when needed, not using a pilot light, and never having to reheat water, a tankless water heater can often improve efficiency by 30 percent or more.
More placement flexibility – Since they don’t have a tank, tankless systems are about the size of a suitcase – much smaller than conventional water heaters. That means a tankless system can used housed in crawl spaces, attics, and other spaces too small for a conventional water heater. If you’re space challenged, a tankless system is the way to go.
Longer equipment life – The primary culprit in the limited lifespan of a conventional water heater is the corrosive water stored in its tank. Because it doesn’t store water, a tankless water heater will last an average of 40 percent longer than its storage model counterpart. The more durable components of a tankless water heater system also fail less frequently and can often be repaired rather than replaced.
More value for your home – A tankless water heater can improve your Home Energy Rating System (HERS) and LEED scores, which can add value to your home if you choose to sell it down the road (a high-efficiency conventional water heater can do this, too).