How Do Tankless Water Heaters Work (Guide)

If you’re tired of running out of hot water or noticing skyrocketing energy bills from your traditional water heater, switching to a tankless water heater (also known as an on-demand water heater) could be a game-changer for your home. But how does a tankless water heater work, and why might it be a better choice for your household?

At Aquarius Home Services, we’re here to ensure you feel confident when upgrading your home systems. This blog will break down:

  • How tankless water heaters operate
  • Their benefits
  • Tips for deciding if a tankless system is the right fit for your home

What Is a Tankless Water Heater?

A white tankless water heater is mounted on a gray brick wall. Several pipes extend from the bottom of the unit, which has labels and instructions printed on its front panel. The wall has a horizontal pattern of brick tiles.

A tankless water heater is a modern heating system that eliminates the need for a bulky water storage tank. Unlike traditional water heaters, which store and heat a large volume of water at once, tankless systems heat water only as needed. This means you won’t be storing gallons of pre-heated water but rather heating water on-demand, ensuring a continuous supply of hot water whenever you need it.

How Does a Tankless Water Heater Work?

A tankless water heater operates using a compact heating unit, installed on a wall or near your water lines. Here’s a step-by-step look at how a tankless water heater functions:

Hot Water Demand is Triggered

When you turn on a hot water faucet, shower, or appliance (like a washing machine), cold water flows into the tankless water heater.

Sensors Detect Flow

Sensors within the unit detect the flow of water and immediately activate the system. This triggers the heating mechanism, which can use either gas burners or electric heating elements to warm the incoming water.

Instant Heating Begins

Once the system activates, water flows through a heat exchanger inside the unit. The heat exchanger rapidly heats the water to your desired temperature. This process happens in seconds, meaning hot water is delivered almost instantly to your faucet or shower.

Hot Water Delivered to Your Home

The heated water is then sent through your plumbing system, arriving right at the location where it’s needed—a showerhead, kitchen sink, or washing machine. Since the water is heated on-demand, you won’t have to worry about running out of hot water.

System Shuts Down When Water Stops Flowing

When you turn off the faucet or appliance, the sensors detect that the water flow has stopped, and the heating process shuts down. This efficient design ensures energy is used only when hot water is required, reducing unnecessary power consumption compared to traditional systems.

6 Key Benefits of a Tankless Water Heater

Person adjusting a modern water heater with a screwdriver. The digital display on the heater shows the temperature. The heater is stainless steel and installed on a wall, with visible pipes and connections underneath.

Now that you understand how a tankless water heater works, you’re probably wondering why so many homeowners are making the switch. Below are the key benefits of this innovative system:

1. Endless Hot Water Supply

One of the standout benefits of a tankless water heater is its ability to provide continuous hot water. Whether you’re tackling a marathon laundry day, running the dishwasher, or enjoying a long shower, you’ll have hot water whenever you need it—no interruptions.

2. Energy Efficiency

Traditional water heaters store hot water in a tank, using energy to keep the water warm even when it’s not being used. This “standby heat loss” leads to wasted energy and higher utility bills. Tankless water heaters heat water only on-demand, meaning they use significantly less energy overall. According to the U.S. Department of Energy, tankless water heaters are 24%-34% more efficient for homes that use less than 41 gallons of hot water daily.

3. Space-Saving Design

Say goodbye to the bulky tank that takes up valuable space in your basement or utility room. Tankless water heaters are compact and can be installed on a wall, freeing up room in your home. This sleek design is particularly appealing to homeowners who value a minimalist and organized home environment.

4. Longer Lifespan

On average, tankless water heaters last up to 20 years, compared to the typical lifespan of 8-12 years for traditional water heaters. While the upfront cost may be higher, the long-term savings and durability make tankless systems a wise investment.

5. Lower Utility Bills

By operating more efficiently and only heating water as needed, tankless water heaters can help you save on your energy bills. Over time, these savings can add up, making the switch not only an environmentally friendly choice but also a financially smart one.

6. Cleaner, Fresher Water

Water stored in traditional tanks can accumulate sediment and rust over time, which may affect the taste and quality of your water. Tankless systems eliminate this issue since they don’t store water, ensuring every drop is as fresh as possible.

Electric vs. Gas Tankless Water Heaters

There are two main types of tankless water heaters to choose from—electric and gas-powered. Deciding which option is right for your home depends on factors like your household’s hot water demand and your home’s existing infrastructure.

Electric Tankless Water Heaters

  • Ideal for smaller households with lower hot water needs
  • More energy-efficient overall, especially in homes with renewable energy sources
  • Easier and less expensive to install than gas models
  • Best for mild climates where incoming water doesn’t need as much heating

Gas-Powered Tankless Water Heaters

  • Can meet high hot water demands, making them a great option for larger households
  • Heat water faster than electric models
  • Require a venting system due to exhaust gases, which can increase installation complexity and cost
  • Excellent choice for homes that already use natural gas or propane

Our Aquarius Home Services team is happy to help assess your needs and recommend the ideal model for your home.

Is a Tankless Water Heater Right for Your Home?

A person in overalls and a red shirt is inspecting a tablet while standing in a room with a white boiler and a red water cylinder. Various pipes and valves are visible in the background.

While tankless water heaters offer many benefits, they’re not the perfect solution for everyone. Here are some factors to consider:

✅ Pros of Tankless Systems:

  • Need consistent hot water—large families will benefit from endless hot water supplies.
  • Want to save on monthly energy bills.
  • Have limited space available for installation.
  • Plan to stay in your home long enough to recoup the investment in energy savings.

❌ Drawbacks to Be Aware Of:

  • Higher upfront cost compared to traditional storage tanks.
  • Installation may require significant retrofitting, especially if switching from a traditional system.
  • May struggle to supply simultaneous hot water needs for multiple fixtures in larger homes if the unit isn’t sized properly.

If you’re unsure if a tankless water heater is the right upgrade for your home, reach out to our team today. We’ll evaluate your household needs, energy goals, and budget to provide personalized recommendations.

Professional Installation and Maintenance

A tankless water heater is a high-tech system that requires professional installation to guarantee optimal performance. At Aquarius Home Services, our expert technicians ensure everything is installed safely and correctly, from proper positioning to venting for gas-powered models.

Once installed, maintenance is relatively simple but essential for keeping your tankless system running at peak performance:

  • Flush the unit annually to remove any mineral buildup, especially in areas with hard water.
  • Clean or replace filters regularly to prevent clogs or blockages.
  • Schedule routine inspections with a professional to catch and address any potential issues early.

The Aquarius Home Services team offers comprehensive maintenance plans to keep your system in tip-top shape year-round.

Make the Switch with Aquarius Home Services

Upgrading to a tankless water heater is an investment in comfort, efficiency, and sustainability for your home. With endless hot water on demand, lower energy bills, and minimal space requirements, it’s no wonder so many homeowners are making the switch.

If you’re ready to enhance your home’s water heating system, trust Aquarius Home Services to guide you through every step of the process—from selecting the right model to expert installation and maintenance. Our team is here to answer any questions, provide advice tailored to your household, and ensure you’re thrilled with your new tankless water heater.Contact us today to schedule a consultation and start saving energy while enjoying the endless hot water you deserve!

Nicholas Kintigh
Nicholas Kintigh
1739846058
Wyatt was very knowledgeable and friendly. He seemed to know what needed to be done and explained everything.
Jodi Powell
Jodi Powell
1739844907
Great customer service!!!! I would highly recommend!!!!
Charlie Cremers
Charlie Cremers
1739835727
Justin from Aquarius Kincetico was great. He was very knowledgeable about our drinking water system, and our water softener system. He walked through everything with me. Thank you again for all your services
Diane Chaussee
Diane Chaussee
1739834775
Derk was so informative and always asked if we had any questions. He answered every question that we asked him. He was pleasant, knowledgeable, and very nice. It was a wonderful experience and we are so happy we have this system now to drink good water! Thank you!!!
Rod S
Rod S
1739831646
Very friendly and knowledgeable. Nick is a great representative of your company.
Jim Molitor
Jim Molitor
1739831493
Very knowledgeable and helpful
J Carroll
J Carroll
1739828599
On time, professional, and efficient. Ryan / Aquarius knows what he is doing!
kurt nyberg
kurt nyberg
1739827475
The people there are supper great and did a great job explaining what we needed to know about it and installing in the time he said
Greg Wax
Greg Wax
1739827456
Rena Shepard
Rena Shepard
1739827174
Anthony was very nice and patient with all. Did a great job and explained everything to me. Thank you
Robert Boyle
Robert Boyle
1739825454
Great and professional installation.
jane larson
jane larson
1739823632
Mike was very thorough and explained everything he was doing. He was a great representative of Aquarius Home Services.
Erik Johnson
Erik Johnson
1739818756
Great service
Maria Fernandes
Maria Fernandes
1739818541
Technician was awesome and did a great thorough job with routine maintenance and system inspection, including taking sensor measurement data at a ceiling vent. World-Class professional knowledge, talent, and technical skill. Thank you, Alec! We look forward to AC inspection in the approaching season, as well...
Gail Brandt
Gail Brandt
1739817675
Gordy provided great service.
Donna Kodet
Donna Kodet
1739810757
Great experience with work done today.Excellent explanations on systemThey were happy to make adjustments as requested. Highly recommend them
Andrew Blattner
Andrew Blattner
1739747698
Great service and experience! Andrew was awesome!
DAN KOLAND
DAN KOLAND
1739683557
Nick repaired our furnace on a Saturday night. He walked me through what was was wrong and had it working after a short period of time. Nick and Aquarius are the best! It would have been a cold night without them.
Christopher Sobraske
Christopher Sobraske
1739658824
Ryan Kahl did a phenomenal job! Extremely knowledgeable about our system and was able to answer all my questions. He was very professional and helpful especially with taking the time to make sure I was 100% confident in our system along with giving me helpful tips above and beyond our system. He really exceeded the value we expected from our service plan.
Corinne Klitzke
Corinne Klitzke
1739645858
Heather Reynolds
Heather Reynolds
1739644317
Max was very helpful!
Bill Enloe
Bill Enloe
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Pete Hayes
Pete Hayes
1739565324
Was a bit hesitant on keeping up with Kinetico!! But your two service techs ( Justin and Hannah)went above and beyond what I was expecting!! They spent so much energy and information related to my issues , making it a pleasant experience. Like I gained two new friends. Plus explained how a different service should take care further issues. Definitely would like to see them for my next service!!! Even got my wife back on board. Thanks again. Pete Hayes
Debbie Doyle
Debbie Doyle
1739561479
Aquarius came out this morning and replaced two toilets and did some plumbing work downstairs all in one morning. The plumber, Joe, was efficient, answers questions, provided helpful information, and was very friendly and personable. I will DEFINITELY use Aquarius again.
Matt Van Beusekom
Matt Van Beusekom
1739558449
Excellent and efficient work. Would definitely recommend!
Josey Dooley
Josey Dooley
1739557030
Amazing service!
Jessica Tracy
Jessica Tracy
1739556713
Gordon was very friendly and knowledgeable - makes the visit/process so much easier.
James M
James M
1739555300
After months of high water bills and feeling itchy, the Aquarius team came to the rescue. My 25 year old kinetico softener finally gave up and was constantly cycling. At the end of the service call we realized the old unit wasn't worth repairing. They sent out a salesperson the same day, providing a great range of options to fit my price point. My new softener arrived early so we were able to move up the install date. Install was flawless and we're back to having the softest water ever. I'm super happy with every interaction I've had with the Aquarius team. They are all super friendly, knowledgeable, and professional. I rarely leave reviews and only leave them when I'm really impressed. That's definitely the case with this company.
Brian Hagen
Brian Hagen
1739551834
Steve Sherwood
Steve Sherwood
1739551765
Great service. Prompt and knowledgeable
Peter T
Peter T
1739551605
Dirk did a good job communicating and installing the system. Recommend.
Nancy Lahmann
Nancy Lahmann
1739551066
Dylan checked boiler and did a thorough inspection. Very polite. He also knocked off a big ice chunk outside …extra service and much appreciated.
Ann Marie Haerter
Ann Marie Haerter
1739550777
Friendly, efficient, knowledgeable
Kenneth Schwebach
Kenneth Schwebach
1739498359
Great service tec! She was very knowledgeable and helpful.
Neal Kempel
Neal Kempel
1739497034
First, Aquarius responded to my interest in an RO system promptly. After deciding to commit to their solution, the installation, Including a water softner solution, it was scheduled the same week. Michael was the installer and he called when in transit and arrived right on schedule. We went over the work to be done and the placement of the equipment with only one issue that arose. The RO and water softener installation would not be a problem, but plumbing for the outdoor outlets would require additional material and labor, not included in the quote. I was looking forward to using the outdoor faucets without switching the system over. We elected to continue with the installation and Michael kept us informed throughout the day of his progress and completion time. He had everything cleaned up and provided us with a review of the system. To date, we are very pleased with the system and want to thank Michael for a great install. My only recommendation to Aquarius would be to take an additional step, during the initial meeting possibly, and physically look at the plumbing to ensure the quote covers all the materials to meet the customer request.
Jacqueline Garberg
Jacqueline Garberg
1739496644
Wyatt was thorough, considerate, a trusted service professional! Thank you!
Deb N
Deb N
1739489085
Tyler from Aquarius Home Services did a great job! He was extremely knowledgeable and helpful.
Jeffrey Ek
Jeffrey Ek
1739486327
The techs are always very cordial, explain what they are doing, and in and out as quickly as makes sense. Having said that, I’ve never felt that they rushed through their work.
Keith Wolff
Keith Wolff
1739485872
Everything was checked out and explained the tech was very informative would recommend them. Thank you!
Jessica Fisher
Jessica Fisher
1739484813
We have had our Aquarius services longer than a decade. During this time, the equipment has never failed us, but more importantly we have received absolutely outstanding customer service anytime we have needed anything. Today was no different, Wyatt came to our house to do our periodic inspection and was able to help troubleshoot a problem and find a solution the very same day. The entire time he was here, he kept his workspace, clean and orderly, and he was very polite and respectful of our home. The shocker came when he was about to leave and told me this was his fifth day On his own! Very impressed, not only with him as a person, but the quality of employees that come out out of Aquarius. Highly recommend this company.
Jane Ogren
Jane Ogren
1739484717
Friendly and knowledgeable
Mike Gunderson
Mike Gunderson
1739483907
I had an old furnace that was on its last legs and needed to be replaced ASAP.Day one: Service Tech arrived 2 hours after initial contact with Aquarius. Sales Rep arrived within an hour of the request. Deal was made and installation appointment scheduled for the NEXT DAY!Day two: Contacted by the installation team at 7:00 am. Arrived at 7:30. Finished up by 2:30.All of the staff that I dealt with were friendly, professional and great to work with. They explained everything very well. I was expecting to wait 2-3 weeks for a new furnace and A/C. This was all done inside of two days. I would 100% recommend Aquarius to anyone needing any type of home service.Tall Mike, Mike Sippel, Chris Oigard, Dave and Luke it was great to work with you. Thanks for everything!Oh, they like dogs too.
Katie Raymond
Katie Raymond
1739481339
Sue Ufheil
Sue Ufheil
1739471348
Colton was very professional and explained everything he was doing. Very happy with service today.
Jarrod Wieland
Jarrod Wieland
1739470866
James Grant
James Grant
1739469886
Wonderful experience with Andrew & Joey , installed new efficient electric water heater . Courteous , clean , efficient, highly recommended
Jeremy Ruth
Jeremy Ruth
1739468208
Justin and Hana were super friendly and they helped figure out an issue with our RO system. Great appt
James Dixon
James Dixon
1739466779
Creative problem solver, pleasant personality, efficient and cleaned up well.
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