Tankless water heaters provide many advantages:
- Long term energy savings: Though a tankless water heater typically costs more initially, it usually costs less to operate because of lower energy use—since it only heats water when required instead of continuously maintaining a tank of heated water. Even homes or buildings with high demand for hot water may realize some level of savings. If instant hot water at taps at limited hours is a priority, a recirculation system can be accommodated by using an aquastat and timer to decrease the added heat loss from the recirculation system. If the storage tank of an electric heater is highly insulated, so that the outer surface of the tank is only slightly warmer than the ambient air, the savings with a tankless heater is less.
- Unlimited hot water: Though flow rate determines the amount of hot water the heater can produce, it can deliver it at that flow rate indefinitely. However, this can also be an ecological disadvantage, as running out of hot water limits use, but a tankless heater provides no such limit.
- Less physical space: Most tankless water heaters can be mounted on a wall or internally in a building's structure. This means less physical space must be dedicated to heating water. Even systems that can't be mounted on walls take up less space than a tank-type water heater.
- Reduced risk of water damage: No stored water means there is no risk of water damage from a tank failure or rupture, though pipe or fitting failure remains possible.
- Temperature compensation: A temperature compensating valve tends to eliminate the issue where the temperature and pressure from tankless heaters decrease during continuous use. Most new generation tankless water heaters stabilize water pressure and temperature by a bypass valve and a mixing valve incorporated in the unit. Modern tankless are not inversely proportional, because they regulate the amount of water they heat and discharge, and therefore stabilize water temperature by using a flow control valve. Temperature change, not flow speed, is the issue the water heater must address. The wider the temperature rise, the less flow from the unit—the smaller the temperature rise, the greater the flow. The flow control valve, in conjunction with thermistors, maintains a stable temperature throughout the use of the unit.
- Safety: Tankless Water Heaters precisely control water temperature, which means dangerous temperature levels and spikes are less likely.
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