On-demand, tankless, or instantaneous water heaters heat water immediately when it is asked for, and so there is no demand for a storage tank. On-demand water heaters are activated by the flow of water. When there is demand for hot water, a fuel valve opens, stiring up the burner. Cold water gets in one side of a coil of copper pipe, which then twists through a heat exchanger that is surrounded by flame, and hot water exits the opposite of the heat exchanger.
The efficiency of an on-demand water heater is based upon the heat transfer efficiency of the heat exchanger and is 75 to 90 percent efficient. One prospective issue is pressure drop across the heat exchanger which can produce lower flows when more then one source of hot water is used.
Tankless Water Heater Repair Lake Worth offers the following information from the U.S. Department of Energy on tankless or demand type water heaters.