Most traditional water heaters maintain a large volume of water at a constant heated temperature. Tankless water heaters produce hot water only when necessary. This means when a hot water faucet is turned on, cold water enters the tankless system. The burners ignite and the cold water is heated in the heat exchanger.

The hot water then flows to the faucet or appliance. The water heater automatically shuts itself off when no hot water is required, and goes on standby mode. It works on demand by using sensors and a computer board, to detect the demand for hot water in the home and adjust the rate of firing, supplying just the right amount.

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