How Does a Tankless Water Heater Work?

Everybody knows how a tank based, traditionalist, inefficient, boring, space-inefficient water heater works. The water flows into a huge, huge, huge tank, only to be bubbled up by a huge gas burner. There’s not much to it, apart from large bills for heating, due to huge inefficiencies, and possibly a lot of water damage to be repaired if your tank decides to leak. Even worse, you might have to buy a whole new house if it blows up.

But how does a modern, more efficient, more space efficient, better designed and faster option work? With a tank, we see all that happens. With a tankless water heating system or unit, we see a little box that miraculously heats our water. But you see, it isn’t all that simple. There are many parts to a tankless water heater that must work together simultaneously, all in order to ensure that you can get hot water instantly as soon as you come to need it.

You see, the main difference between a tankless water heater and a tank-based water heater is… well… the tank – or lack of it. We know that in traditional tank-based models, water fills up the tank and then it’s heated up in there, and then maybe distributed through the household if it’s needed.

But in a tankless water heating system or unit, the story really is quite different. You need to understand that the water does not stay hot at all times – rather, a tankless water heater takes high pressure water from the mains, and then feeds it through its system, in which it heats up rapidly. This only happens when you turn on a tap, though – not like a tank-based water heater, which always tries to keep the water hot.

For this reason, as soon as you turn off all the taps in the household, the tankless water heating system will shut off instantly. This is why they are so efficient! They only heat water when it is actively demanded, and not just idly hoping that perhaps some day somebody will decide to use the hot water.

When water initially flows in from the mains, it goes into the main intake valve of the water heater. This is usually connected to the mains by flexible steel hosing, which must be fitted very tightly and most likely with a strong rubber seal to prevent any high-pressure leaks. You’ll also find that it is typically the case that there is a “shut off” valve on the cold side, which is always the side of the mains, just in case anything goes wrong or the tankless water heater is in need of maintenance or servicing.

Anyway- when the water flows in from the mains, it goes into the main intake valve. Here, if the pressure is too high, the system is at serious risk of exploding – especially if the system has not been installed correctly, or the output valve is shut. This is an incredibly dangerous situation that you always want to avoid.

If this does not happen, because the heater is actually correctly installed, you will find that it will now pass through one of two elements, depending on the type of your heater.

In a gas tankless water heating system or unit, the water is pumped through many coils of pipe that are actively heated by raging hot burning propane, of a couple thousand degrees Celsius hot. Naturally, the internal energy released by the combustion of the gas is transferred into the internal energy stores of the water passing through the piping, resulting in an increase in temperature.

Depending on the setting of your heater, this temperature will change. If you set your heater to only heat to a mild/low heat, the water will flow through quite quickly to prevent too much energy transfer (too much heat going into the water) and will likely be exposed to a smaller fireball of gas within the tankless water heating system or unit.

However, if your heater is set to produce the hottest water it possibly can, then your rate of flow will certainly be much lower, however your water will certainly be much hotter. This is as a result of a slower flow – more pressure released – through the heating coil, and a more intense fireball of burning gas, potentially thousands of degrees hotter than usual. This allows more energy to be transferred to the moving water – it stays in the heat for longer, and the heat is more intense.

If you have an electrical heater, you may find that your process is less efficient, as electricity is the least efficient way to heat water. The same principle applies, however. The water goes through a coil-shaped piece of tubing that is surrounded by electrical heating elements designed to heat water rapidly, and then passes out of the system as hot water.

In the event of a pressure buildup that is too much for the entire system to happen, either the pressure release valves will be engage, spurting scolding hot and freezing cold water everywhere – potentially in somebody’s face if not well thought through – or the tank will explode.

For this reason, it is essential that you take great care to not only position your tank responsibly, but also take great care with the pressure, and ensure that it does not get too high. If it does, switch off the water supply at the main valve.

So, to recap – cold water from the mains goes into the cold water inlet of a tankless water heating unit, where it passes through a coil-shaped device that exposes it to either an electrical heating element or fireball of gas – usually propane – that transfers immense amounts of internal energy into the water, increasing its temperature, since temperature is proportional to internal energy. When this water is heated, it escapes out of the “hot water” outlet at high pressure, ready to be used around the home.

That is how they work!

About the author

Steve Bates

Hi, I'm Steve and I currently reside in Chicago, Illinois. Although for most of the last 20 years I was a partner in a HVAC company down in Austin, Texas.

I understand the frustration involved with dealing with water heater repairs and replacing or upgrading to a new, more efficient model.

My aim is offer some basic advice on fixing home hot water systems. And if a repair isn't possible, then to make the process of selecting a new water heater – be it gas or electric - as simple as possible.

So that you can save money and have a safe and reliable hot water system in your home for many years to come.