What type of water heater provides hot water "on demand"?

Tankless water heaters, also known as on-demand water heaters, function by heating water directly without the use of a storage tank. When a hot water tap is turned on, cold water travels through a pipe into the unit, where either a gas burner or an electric element heats the water as it flows through, providing a continuous supply of hot water without the need to preheat or store it.

This system is particularly efficient in terms of energy use since water is only heated as needed, which eliminates standby heat loss that occurs in traditional tank water heaters. As a result, tankless water heaters can offer significant energy savings and are well-suited for homes with varying hot water needs, making them an increasingly popular choice among homeowners looking to optimize their water heating solutions.