There are certain advantages to tankless water heaters :
Long term energy savings: Although a tankless water heater might cost more initially it may result in both energy and cost savings in the long term. As water is heated only when it is needed, there is no storage of hot water. With a tank, water is kept warm all day even if it never gets used and heat loss through the tank walls will result in a continual energy drain. Even in homes or buildings with a high demand for hot water, a tankless water heater may provide some level of savings. In a typical home these savings are quite substantial. If instant hot water at the taps at limited hours is a priority, a recirculation system similar to those in the tank-type systems can be accommodated by using an aquastat and timer in order to decrease the added heat loss from the recirculation system. It has to be said though that if the storage tank is highly-insulated – a few tanks are available with excellent levels such as 100 mm or more polyurethane foam – the savings become minimal. For one consumer-grade electric storage water heater, the surface temperature was less than 1 °C higher than the air temperature.
Unlimited hot water: As water is heated while passing through the system an unlimited supply of hot water is available with a tankless water heater. Although flow rate will determine the amount of hot water that can be generated at one time it can be generated indefinitely.
Less physical space: Most tankless water heaters can be mounted on a wall or even internally in a building’s structure. This means less physical space has to be dedicated to heating water. Even systems that can’t be mounted on walls take up less space than a tank-type water heater.
Reduced risk of water damage: No stored water means there is no risk of water damage from a tank failure or rupture, although the risk of water damage from a pipe or fitting failure remains. Improper piping in either the hot or cold water lines to the tankless water heater can result in water damage though.[citation needed]
Temperature compensation A temperature compensating valve tends to eliminate the issue where the temperature and pressure from tankless heaters decrease during continuous use. Most new generation tankless water heaters, like the Takagi TK3, TK3 PRO, TM32, and the TM50 stabilize water pressure and temperature by a bypass valve and a mxing valve which is incorporated in the unit. Modern Tankless are not inversely proportional, because they will regulate the amount of water that is created and discharged, therefore stabilizing water temperature by utilizing a flow control valve. Flow speed is not the issue, but delta T is the important issue to address. The wider the temperature rise, the less flow you receive from the unit. The smaller the temperature rise, the more flow you receive. The flow control valve in conjunction with thermistors, maintains a stable temperature throughout the use of the unit.