An on demand water heater helps with just a click of a button if you happen to be last one to take a shower and there just isn’t any more stored hot water.

Traditional tank water heaters run out of hot water, however; with an on demand hot water heater you will never run out of hot water. On demand water heaters are exactly what they sound like – tankless!

You do not have the big and bulky storage container that takes up half of your garage. Instead of filling up an entire tank of water, these devices heat the water as you use the appliance.

They have been used in Europe and Japan for quite some time, however; they are relatively new in the United States.

The on demand water heater is a green appliance because it saves energy costs. Rather than heating water you will not need, you are heating only what you are using.

Since water is not stored in the heater, the risk of corrosion is eliminated. Thus, these devices will last you five to ten years longer than a regular heater would.

While these systems are amazing, you will pay upwards of two to three times more for the newer technology. It is not cost effective to switch to an on demand heater if you already have a functioning regular water heater.

How On Demand Water Heaters Work

Understanding how an on demand hot water heater works requires prior knowledge of working tank heaters. Traditional water heaters use a stainless steel tank that holds the water. Cold water is injected in the bottom of the tank, and is heated using either a gas burner or electric heating element.

Hot water rises to the top and is pumped throughout the house to the requested appliance. The tank is continuously heating the water even when it is not being used. As the water sits it cools off, thus it must be reheated. This is referred to as standby heat loss – and costs you money!

An on demand water heater compensates for the standby heat loss by only heating the water you need at the moment. When an appliance needs hot water, the on demand heater warms the water for you as it passes through the device. Because the water heater does not have to heat water all the time it is more efficient.

The on demand heaters utilize a heat exchanger that raises the temperature. Heat exchangers can be found in air conditioners, refrigerators, and even radiators. The exchanger is turned on when water is directed through the device.

Models and Variations

An on demand water heater comes in a variety of models, however; they are classified based on the type of fuel. Water heaters can utilize natural gas, propane, or electricity.

Natural gas models are much more efficient and cost less to operate than electric models, which have a higher selling price and cost of ownership. Depending on the model of on demand heater you are looking into, it is important to select models that have a good flow rate and high temperature.

The flow rate will determine the amount of water that can be heated at one time. On demand heaters are generally designed for single appliances or small apartments. They do not function well in larger households where demand exceeds 41 gallons daily.

The Federal Energy Policy Act established in 2002 placed a cap of 2.2 gallons per minute at 60 pounds per square inch (PSI) for all of your appliances. In order to identify your flow rate, add the total GPM of all your appliances you will need to use at one time.

For example, taking a shower and washing the dishes at the same time might stretch the limits of some devices. There are three categories of appliances: low-flow, pre-1992, and post-1992. Low-flow devices use less water per minute; pre-1992 devices use considerably more water than post-1992 models, which are capped at 2.2 gpm.

The temperature in which an on demand water heater can get your water to will depend on your flow rate. Establish a base temperature by measuring how cold/hot your groundwater is – the flow coming from the main water line.

You can calculate this by averaging your yearly climate. The hotter your water needs to be, the bigger and more powerful of on demand heater you will require. Electric models are less powerful and should be used for only a few appliances or people.

Features and Benefits

An on demand water heater is an ideal solution for almost everyone. The devices come in a variety of models and are selling at different price points. GPM rather than gallons per minute – as in tank models measures water heaters in this category.

On demand heaters sell for $150 to $4,000, however; a 7.2 gpm heater can be found for under $1,500. A device in this category should be adequate for a family of four given no more than three post-1992 devices are being used at once.

For homes with devices pre-1992, traditional water heaters are going to be better. Companies claim that on demand heaters can save up to 50 percent on your utility bills, however; results vary depending on your specific settings.

The Best Instant Water Heater

Bosch GL6 Ariston

Bosch GL6 Ariston

The Bosch GL6 Ariston 6-Gallon Point-of-Use Indoor Electric Mini-Tank Water Heater is designed for use with one or two appliances.

It is not designed to replace your current water heater, and cannot run an entire apartment or studio.

The device is meant to provide hot water to a sink or faucet – it has not been tested on dishwashers, showers, or bathtubs that require a high GPM.

Since the device uses electricity there is no need to connect it to a gas line.

Being electric saves you time and money because yourself can complete installation. Simply plug your on demand heater into an outlet and water source.

Pros and Cons of On Demand Water Heaters


  • Efficiency: An on demand water heater saves energy and promotes the use of renewable resources.
  • Cost: These water heaters save you up to 50 percent on your utility bills because water is not wasted.
  • Size: On demand heaters are much smaller than traditional tanks, and can be installed in compact locations.


  • Cost: An on demand water heater has a high point-of-sale cost, however; they qualify for $300 federal rebates.
  • Pressure: An instant water heater does not have enough power to run an entire house, however; they are useful for smaller apartments and homes.

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