What Is a Tankless Water Heater?
A tankless water heater is a water-heating appliance that warms water only when a fixture calls for hot water. It has no storage tank. Cold water passes through a heat exchanger, where gas burners or electric elements raise the water temperature before it reaches a faucet, shower, or other outlet.
Quick Facts About Tankless Water Heater
Category
Water heating equipment
Used for
On-demand hot water
Common confusion
Often mistaken for a compact storage tank
Also called
On-Demand Water Heater, Instant water heater
Often discussed with
Water Heater Installation, Water Heater Repair
Key Takeaways About Tankless Water Heater
- Water heats only when a fixture calls for hot water.
- The unit needs suitable fuel, water flow, venting, or electrical service.
- A tankless unit is not the same as a small storage tank.
How Tankless Water Heater Works

A tankless water heater starts heating when a faucet, shower, or appliance creates water flow. A flow sensor signals the control system, and the heat source warms water as it moves through a heat exchanger. The heated water then travels through the hot-water pipes.
Related glossary terms: Expansion Tank, Manifold, Thermostatic Mixing Valve.
Gas models use a burner and need proper exhaust venting. Electric models use heating elements and need suitable electrical service. Both types depend on correct water flow, temperature settings, pipe connections, and system controls.
How Installation Applies
During water heater installation, the existing fuel source, water lines, vent path, and drain arrangement help determine how the unit connects. The installer also checks that fixtures receive hot water as expected and that controls operate correctly.

Expert Note
When we handle a tankless water heater installation, we check the water lines, fuel or electrical supply, venting, and controls as one system. We also review fixture flow and temperature behavior after connection. These checks help identify installation needs that a product label alone cannot show.
Tankless Water Heater in Practice: A Real-World Example
A homeowner replacing an aging storage water heater may choose a tankless water heater for a remodel. The installation plan accounts for the existing gas or electrical setup, water connections, vent path, and space around the unit.
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Related Terms
Expansion Tank
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Manifold
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Thermostatic Mixing Valve
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Water Softener Resin
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