LARGE-CAPACITY WASHING MACHINES, dishwashers, luxury shower systems, and whirlpool tubs can put a severe strain on a standard water heater with even the largest-capacity tank. Eventually, the tank runs out of hot water and requires time to recover. One way to solve that problem is by using a tankless water heater.

Kyle Murray, vice president of marketing for Waitsfield, Vt.–based Controlled Energy Corp., says tankless water heaters have seen a dramatic 20 percent to 30 percent per-year increase because the systems offer several advantages that conventional water heaters don't. One of those advantages is greater energy efficiency.

“Over a year, you can save up to 40 percent on the water-heating portion of your [energy] bill,” says Brad Monaghan, East Coast sales manager for Irvine, Calif.–based Takagi.

Instead of continuously drawing on energy to heat and store water in a tank, tankless systems flash heat water as it is needed by passing it through a copper heat exchanger. When a hot-water tap is turned on, a flow sensor is tripped. The tripped sensor signals the burners to fire up the heating element.

“The sensor detects the temperature and flow rate of the incoming water and calculates exactly how many BTUs to fire in order to heat the water to the desired or set temperature,” says Tiffani Thompson, specialty products sales manager for Rheem Water Heaters in New York. “When the tap is turned off, the entire unit shuts down, so there is no standing pilot.”

Because tankless systems are compact and designed with sealed combustion, they can be installed on the inside or outside the home.

Tankless units are more expensive than traditional water heaters, Monaghan says, “but with the fuel savings, they can generally pay themselves off over two to three years.”

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