EGEE 102
Energy Conservation for Environmental Protection

Types of Water Heaters: Demand Water Heaters


Demand Water Heaters do not have storage tanks, so there is no standby heat loss from the tank, and energy consumption is reduced by 20 to 30 percent. Demand water heaters are available in propane (LP), natural gas, or electric models.

In these types of water heaters, cold water travels through a pipe into the unit, and either a gas burner or an electric element heats the water only when needed. With these systems, you never run out of hot water. However, the flow rate is limited by the outlet temperature.

The appeal of demand water heaters is the elimination of the tank standby losses, the resulting lower operating costs, and the fact that the heater delivers hot water continuously.

How a Demand Water Heater works

Click the “play” button to see how a Demand Water Heater works.

How a Demand Water Heater works
Text description of the How a Demand Water Heater Works animation.

Cold water flowing into the building is split off to a cold water line and a hot water line. When a faucet is turned on, water flows through the hot water line past has a heating unit where several heating elements quickly raise the water's temperature. The now hot water flows back into the hot water line and travels to where it is needed.

Dr. Sarma Pisupati

Typically, demand heaters provide hot water at a rate of 2 to 4 gallons per minute. This flow rate might meet the requirements of a household's hot water needs as long as the hot water is not needed in more than one location at a time (e.g., one cannot shower and do the laundry simultaneously). To meet hot water demand when multiple faucets are being used, demand heaters can be installed in parallel sequence.

Although gas-fired demand heaters tend to have higher flow rates than electric ones, they can waste energy even when no water is being heated if their pilot lights stay on. However, the amount of energy consumed by a pilot light is quite small. Thus, in most cases, gas demand water heaters will cost less to operate than electric water heaters.

Demand water heaters cost more than conventional storage tank-type units. Small point-of-use heaters that deliver 1 to 2 gallons per minute (gpm) sell for about $200. Larger gas−fired demand units that deliver 3 to 5gpm cost $550 - $1,000. The more hot water the unit produces, the higher the cost.

Advantages and Disadvantages of Demand Water Heaters

Advantages and Disadvantages of Demand Water Heaters
Advantages Disadvantages
  • Compact in size
  • Virtually eliminates standby losses
  • Wastes less water because warm water is provided immediately where it is used (no need to wait for water to warm up)
  • Provides unlimited hot water as long as it is operated within its capacity
  • Equipment life is longer (20 years vs. 10-15 years for tank-type heaters) than tank-type heaters because they are less subject to corrosion
  • Demand water heaters usually cannot supply enough hot water for simultaneous uses such as showers and laundry.
  • Unless your demand system has a feature called modulating temperature control, it may not heat water to a constant temperature at different flow rates. That means that water temperatures can fluctuate uncomfortably—particularly if the water pressure varies wildly in your own water system.
  • Electric units will draw more instantaneous power than tank-type water heaters. If electric rates include a demand charge, operation may be expensive.
  • Electric demand water heaters require a relatively high electric power draw because water must be heated quickly to the desired temperature. Make sure your wiring is up to the demand.
  • Demand gas water heaters require a direct vent or conventional flue. If a gas-powered unit has a pilot light, it can waste a lot of energy.