Tankless Water Heaters

How tankless water heaters work

Last Modified on: 4/14/2022

tankless water heaters
Heating water accounts for up to 30 percent of the average home’s energy budget. Some manufacturers of tankless water heaters claim their tanks can cut your energy costs by as much as 50% over regular heaters.

Savings & Efficiency: Tankless water heaters are an affordable option for energy savings. A tanked water heater constantly uses energy to heat and reheat water. Standby heat loss creates waste. And, since going green is very important, a tankless heater is a fantastic investment. Tankless units allow you to easily reduce waste and reach economic efficiency.

Heat as much water as you need without paying to keep it stored. With a tankless model you benefit from a constant supply. Simply turn on the hot water faucet.

How it works: A propane tankless water heater uses a flame so hot you don’t need to keep water sitting in a storage tank, eating up energy dollars while it waits to be used. You simply turn on a hot-water faucet. A flow sensor will activate a propane gas burner to heat the water. The heating will continue until you turn off the faucet, at which point the gas burner shuts off.

Take a closer look at how a tankless water heater works:


Leading water heater manufacturer Navien has provided this illustration of how a tankless water heater works.

Why a propane tankless water heater?

Watch an electric storage water heater tank being replaced with a propane tankless system.

Compare your propane water heating options

Type of water heater EF (Energy Factor) Annual Operating Costs*
Propane Tank 0.58 $682
Propane Tankless 0.82 $482
Propane Condensing Tankless 0.96 $412

Two great options for propane tankless water heaters

Noncondensing Tankless System

  • Uses a single heat exchanger to heat water on demand.
  • Efficiency rating is generally in the mid 80% range (compared to an old 40-gallon tank that is about 60% efficient).

Condensing Tankless System

  • Uses two heat exchangers.
  • Secondary heat exchanger captures extra heat before it escapes into the vent system.
  • Extra heat is transferred to heat incoming water that flows through primary heat exchanger.
  • Efficiency rating is generally in the mid 90% range, about 10-15% higher than a noncondensing tankless unit.