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.
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