Put away your water heater tank and shave ten to twenty percent off your water heating bill. That savings results from elimination of standby losses which is the energy lost from warmed water sitting in a tank. Tankless water heaters provide hot water at a preset temperature when needed without storage, thereby reducing or eliminating standby losses. Tankless water heaters can be used for supplementary heat, such as a booster to a solar hot water system, or to meet all hot water needs.
Tank heaters
Water heaters have an electric, gas, or propane heating device which is activated by the flow of water. Once activated, the heater provides a constant supply of hot water. The maximum flow rate at a desired temperature will be determined by the capacity of the water heater. Gas water heaters typically have larger capacities than electric tankless water heaters. Large units intended for whole house water heating are located centrally in the house while, in point-of-use applications, the water heater usually sits in a closet or under a sink.
The water heaters are rated by the maximum flow rate at which a desired temperature rise is met. Special features may allow the user to set the delivery temperature. Efficiency is higher than an equivalent tank type water heater because standby losses are virtually reduced. Electric water heaters require a relatively high electric power draw because water must be heated quickly to the desired temperature. Residential gas models are available that can heat more than five gallons per minute by 60°F, generally more than enough for two showers to be run simultaneously. Whole house electric units typically have a capacity closer to three gallons per minute.
Conclusion
Water tank heating is the third largest energy expense in your house. It typically accounts for about one fifth of your utility bill. There are four ways to cut your water tank heating bills: use less hot water, turn down the thermostat on your water heater, insulate your water heater, or buy a new, more efficient water heater. The underlying principle of efficient tank heating is to size the boiler to the output needed to heat the house for three degrees of frost and then add the water heating and add a sizeable allowance extra. The radiators are then sized according to the heating needs of each room, with a total output that is greater than the output of the boiler.

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