How It Works: Tankless Water Heaters

Unlike tank-style water heaters that keep a barrel of hot water ready to go 24 hours a day, tankless water heaters can help you to save energy and money by heating only the amount of water you need, and only when you need it. Manufacturers say that by heating water on demand, tankless water heaters provide a 30 percent savings in water-heating costs and a 50 precent decrease in energy consumption. This interactive graphic takes you inside a tankless water heater. Read past articles from Fine Homebuilding for more information on how to upgrade to a tankless water heater or determine if it's right for your home.