Believe it or not hot water heaters account for 20% of the home's annual energy bill. Due to this using a tankless water heater can result in substantial savings for you. Tankless versions heat water only as it is used. When a hot water tap is opened, sensors in the heater kick-on to activate the heating elements, which then deliver a constant supply of hot water.

The instant, on-demand, tankless design means water is heated instantly, but only for as long as the hot water is being used. Conventional tank water heaters, on the other hand, heats water 24 hours a day, 365 days a year. And believe me you pay for the energy it takes to keep the water hot. Ironically, tanks can, and do, run out of hot water when demand is high. How many showers does it take in your home before someone gets a cold surprise?

Conventional water heaters work constantly to keep the entire water reserve at a usable temperature. This means that even when there is no demand for hot water, the heater continues to work. If you have large-capacity baths, then a tankless water heater can provide all the hot water needed for a well-deserved soak.

Conventional heaters heat water up to 140 degrees in order to make the supply of hot water last. That's too hot for anyone to use, so cold water is added and that is a waste of energy. Tankless water heaters heat the water only to the temperature required for use, and you can control the temperature with the turn of a dial.

Conventional tank heaters have upper and lower heating elements, one of which is cycling on or off 24 hours per day. This raises your heating bill, even when you aren't using water.

When water reaches the tap, cold water must then be added so that the temperature is comfortable to the human touch. This process of heating water wastes valuable energy, not to mention money. When a hot water faucet is activated, the conventional tank heater is replenishing the tank with cold water at the same time, lowering the overall water temperature in the tank. This triggers the element to draw more power to reheat the water to the desired set temperature.

Though tankless water heaters can operate on electricity, gas-powered heaters tend to deliver hot water at higher rates and are recommended for houses with more than two bathrooms. Traditional electric or gas tank water heaters have been used in commercial and residential properties since the early twentieth century. Conventional tank heaters use a simple heating element and tank technology that, with the exception of some fairly recent gains in the area of energy efficiency, have remained virtually unchanged over the last 25 years.

Here are a few other benefits to tankless water heaters:

You only pay for the hot water you use - This results in an energy savings of up to 14% to 50% on energy bills. Tankless water heaters eliminate the need to store hot water. The savings results from elimination of standby losses -- energy lost from warmed water sitting in a tank. And, since water heating accounts for about 14 percent of the average U.S. household energy budget, this can be a significant loss.

Space savings- With no need for a bulky tank, hot water heaters can be installed virtually anywhere in the house.

Less maintenance- This results in a longer equipment life. Unlike with standard tanks, tankless water heaters do not get sediment accumulation, which means less annual maintenance. Tankless units are subject to less corrosion from constant exposure to water and high temperatures--the usual culprits in a water heater's demise.

Tankless water heaters can provide enough hot water to fill the soaking tub, but they might not be able to keep up with the hot water demand for a home if multiple appliances like dishwashers, washing machines, and showers are running simultaneously. It's not that the water won't be hot during times of high demand, just that the hot water needs to be shared with several sources. The result may be a reduced rate of flow that could lead to longer wash cycles or less-than-desirable shower pressures.

Other issues sometimes encountered with tankless hot water heaters occur when too little hot water has been called for. Some super-low flow plumbing fixtures may not trigger the heating element, so instead of running out of hot water, the homeowner never gets into hot water!

As you can see, there are many benefits to opting for a tankless water heater over a conventional one. When you add up all of these benefits you can begin to see the impact that a tankless heater could have on your comfort and on your energy bills.

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Emerson Lockwood write on topics related to Home Repair, Home Improvements, and Home Financing. You can read more of his articles at http://www.SuperHomeIdeas.com . Super Home Ideas covers a variety of topics such as: Bathroom Repair, Interior Decorating, and home Mortgage Loans.