Hot water usage in Canadian households consumes between 15 and 30% of a home’s energy demand. Surprisingly, the technology used to heat water is traditional and highly inefficient when compared to the tankless or on-demand technologies now used regularly in Europe and Asia.

Traditional water heaters used by most Canadian homeowners store heated water in a hot water storage tank. As hot water is used up from the storage tank, it gets replaced by incoming cold water, lowering the temperature of the stored water. An electric heating element or gas burner is activated by a thermostat to slowly reheat the water in the storage tank to a specified temperature. The storage tank stores the hot water ready for use and automatically keeps the water hot as the water gets used, or as it cools down through natural heat loss.

On contrast, an on-demand tankless unit has a heating device that is activated by the flow of water. When a hot water faucet is turned on and the water begins to flow, a sensor detects the flow and the heating elements turn on instantly to delivers a constant supply of hot water. The tankless water heater will remain on until the hot water faucet is turned off. As soon as the flow sensor detects that water has stopped flowing, the power to the unit is turned off completely.

There are numerous advantages to using a tankless water heating system, including the following key highlights:

Reduces water heating costs as much as 50% Tankless water heaters heat entirely on demand, so when hot water is not being demanded, absolutely no energy is being consumed and the stand-by heating loss is completely eliminated.

Unlimited hot water. Tankless heaters never run out of hot water. They can literally run all day long if necessary and they will never stop producing hot water since they heat water instantly on demand—no more cold showers.

Reduces the risk of scalding. Sophisticated tankless heaters allow you to set the ongoing water temperature to a much more reasonable and safer temperature, closer to the actual temperature you will use the water at, thereby reducing the risk of scalding.

More reliable. Since hot water is not stored, tankless water heaters generally handle hard water minerals and sediments much better than conventional tanks. This makes them far less likely to develop corrosive leaks causing expensive water damage in your home. If properly maintained, an on-demand water heater will keep its efficiency throughout the entire lifetime of the unit—up to 20 years with normal maintenance.

Saves space. Tankless water heaters are about the size of a briefcase (electric units). They save valuable floor space that can be used for storage, etc., especially in condos and apartments. The only requirement is that the heater must be installed at least three feet away from a door, window, or vent.

Determining the correct sizing for an on-demand water heater is crucial and to do so correctly, the peak hot water demand the unit will need to accommodate must be established. On-demand water heaters are rated according to the number of gallons of water per minute that can be raised to the desired temperature.

Also, the volume of hot water that an on-demand heater can deliver is directly correlated to its gas or electricity input. Therefore, if there are several appliances already running on natural gas or electricity, your house supply source my need to be upgraded to handle the increased demand on power. This could affect the cost and set up time of your new tankless water heater.

Comparing the old technology with the new, one thing is clear: a tankless water heater will be cheaper over the long run than a conventional water heater. If a homeowner has a choice between the two, gas or electric, in most cases the tankless gas water heater will be cheaper in the long run than an electric.