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How a Tankless Water Heater Works
Quick answer: A tankless senses flow when you open a hot tap (often above 0.4–0.6 GPM), fires a gas burner or electric elements, and heats water in a heat exchanger in seconds. Example: a 199,000 BTU/h unit heats about 5.4 GPM by 70°F. No tank means no standby loss — flow is the limit.
Context: heating on demand
Traditional tanks keep 40–80 gallons hot around the clock and lose heat through the tank walls (standby loss). A tankless unit stays idle until water flows. Then it heats only what you use, as you use it. That design explains both the advantages — endless duration, smaller size, lower standby loss — and the limits, chiefly a ceiling on flow at a given temperature rise.
Key components
- Flow sensor: detects water movement and signals the control board.
- Control board: reads inlet and outlet temperature and adjusts firing rate.
- Burner or elements: gas burner with modulating valve, or electric resistance elements.
- Heat exchanger: copper or stainless coils where heat transfers into water.
- Secondary exchanger (condensing units): captures heat from exhaust for higher efficiency.
- Fan and venting (gas): moves combustion air and exhaust safely outside.
- Inlet filter and service valves: protect the unit and allow maintenance.
Process: what happens when you open a tap
- Hot tap opens; water starts moving through the unit.
2. Flow sensor crosses the activation threshold (often 0.4–0.6 GPM).
3. Gas units start the fan, ignite and modulate the burner; electric units switch on elements.
4. Sensors compare outlet temperature to the setpoint and adjust power every second.
5. Tap closes; the unit shuts down and the fan purges exhaust.
Gas vs electric operation
| Aspect | Gas | Electric |
|---|---|---|
| Heat source | Burner, 15,000–199,000 BTU/h (example) | Elements, 3–36 kW (example) |
| Venting | Required | None |
| Start-up | Fan + ignition, a few seconds | Near-instant |
| Typical use | Whole home | Point-of-use to whole home in warm climates |
Worked example
Figures below are illustrative examples (2026-10-29), not quotes or guarantees.
Assumptions: shower at 2.0 GPM, inlet 50°F, setpoint 120°F (70°F rise), condensing gas unit at 0.95 efficiency.
- Heat needed: 2.0 × 70 × 500 = 70,000 BTU/h output.
- Burner input: 70,000 ÷ 0.95 ≈ 74,000 BTU/h — the unit modulates to about 37% of a 199,000 BTU/h maximum.
- Add a second shower: input rises to about 147,000 BTU/h automatically.
That modulation is why a large unit can still run efficiently on a single faucet.
Why there is a short wait
Hot water still has to travel from the unit to the tap, and the unit needs a few seconds to ignite and stabilise. Wait times are mostly about pipe length; a recirculation system or a closer location can help.
Mistakes to avoid
- Expecting instant hot water at distant taps.
- Using flow below the activation point (a trickle) and getting cold water.
- Skipping descaling, which lets scale insulate the heat exchanger — see descaler guide.
FAQ
Does it heat water instantly?
It heats as water passes, within seconds, but pipe travel time still applies.
Is it more efficient than a tank?
It avoids standby loss; savings depend on usage. See tankless vs tank.
What is a condensing unit?
One that recovers extra heat from exhaust, reaching about 0.90–0.97 efficiency.
Does it need electricity if it runs on gas?
Yes, for controls, fan and ignition; it will not run during a power outage.
Safety and code reminders
Gas, venting, combustion air, condensate disposal and high-amperage electrical work all carry real safety risks, including carbon monoxide, fire, scalding and shock. They are also governed by local code and permits that differ between towns and provinces or states. Treat every step on this page as preparation for a professional visit, not as instructions to do the work yourself. Keep the manufacturer's manual for your exact model, set water temperature with scald risk in mind (120°F is a common household target), and stop and call a licensed professional whenever something is unclear.
Quick reference: typical fixture flow rates
These example flow rates help you translate everyday use into the GPM numbers used throughout this site. Check the rating stamped on your own fixtures, as older fixtures often run higher.
| Fixture | Example hot-water flow |
|---|---|
| Low-flow showerhead | 1.5–1.8 GPM |
| Standard showerhead | 2.0–2.5 GPM |
| Bathroom faucet | 0.5–1.2 GPM |
| Kitchen faucet | 1.0–1.8 GPM |
| Dishwasher | 0.8–1.5 GPM |
| Washing machine (warm) | 1.0–2.0 GPM |
| Bathtub fill | 2.0–4.0 GPM |
Add only the fixtures that genuinely run at the same time. Running the dishwasher or laundry outside shower hours is the simplest way to stay within a unit's capacity.
Questions to ask a licensed installer
Bring these questions to every quote so you can compare them fairly. Good installers welcome them, and the answers often reveal hidden costs before work starts.
- What peak GPM and temperature rise did you size this unit for, and what inlet water temperature did you assume for winter?
- Is my existing gas line, meter or electrical panel large enough, and if not, what exactly needs upgrading and what does that line item cost?
- What venting route will you use, how long is it, and does it meet the manufacturer's instructions and local code?
- Does the quote include a permit, isolation (service) valves for future flushing, a condensate drain if needed, and removal of the old heater?
- What are the labour warranty and the manufacturer's heat-exchanger and parts warranty terms, and do they require registration or yearly professional service?
- How long will the install take, and will there be a period without hot water?
How to read the numbers on this site
Every figure on TanklessMath is a planning estimate. Ranges reflect typical North American examples as of 2026-10-29 and will differ with your region, home, fuel prices and installer. Equipment ratings vary by model, so always check the specification sheet for the exact unit you are considering. When our example and a licensed installer disagree, trust the installer who has seen your home.
Next steps
Write down your peak fixtures, coldest incoming water temperature, fuel type and possible locations, then ask at least two licensed installers to confirm sizing, venting, gas or electrical capacity, permits and local code. Compare written quotes line by line so the unit, labour, materials and upgrades are separated. Questions about this site: hello@charlandandco.com.
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