How Tankless Water Heaters Work

Understand the Difference between a Tankless Water Heater vs. a Tank

When trying to compare a tankless water heater with a tank, it helps to understand exactly what a tankless water heater is and how it lets you enjoy all that nonstop, tankless hot water.

The explanation is as simple as its operation. A tankless water heater benefits from the ultra-high efficiency of propane, using a flame so hot it’s not necessary to keep your water heated in a bulky storage tank. All you have to do is turn on a hot water faucet and a flow sensor activates a propane gas burner to heat the water. The water heating will continue until you turn off the faucet. The gas burner will then shut off.

How a Tankless Water Heater Works

Contents Index

  1. When a hot water tap is opened the unit detects the flow.
  2. The flow sensor activates to determine the amount of hot water needed.
  3. The igniter activates.
  4. The gas control valve opens to supply the correct amount of gas.
  5. The fan and venturi activate to provide the correct amount of gas and fuel.
  6. The premix burner ignites, providing a flame to heat the water.
  7. Cold water is preheated in the secondary heat exchanger.
  8. Preheated water passes from the secondary to the primary heat exchanger.
  9. The unit determines outgoing set temperature and adjusts the flame to heat the water.
  10. Heated water moves to the buffer tank.
  11. Desired hot water amount delivered to the faucet.

Why a propane tankless water heater?

  • Tankless water heaters deliver an endless supply of water.
  • Their compact size saves roughly 12 square feet of floor space.
  • These systems are on demand, so they heat water only when it’s needed. That feature eliminates standby losses that occur in systems with storage tank water heaters like the typical electric water heater.
  • They save more than $150 per year in energy costs compared with typical electric storage water heaters.
  • They have 50 to 60 percent lower CO2 emissions compared with electric storage tank systems.
  • Propane tankless systems also qualify for rebates, which can make them even more cost-effective.

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 EF $249
Propane Tankless 0.82 EF $176
Propane Condensing Tankless 0.96 EF $150

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.