Will a tankless water heater save more than it will cost?
That can be a tricky question. Let me explain how a tankless water heater or on-demand water heater works.
These units are relatively small and are installed near the area where they will be used. Most are installed in bathrooms for example. 
When the hot water faucet is turned on, the unit’s heating coils are turned on and heat the water almost instantaneously. The flow of the water may be a bit less than in a traditional water heater but the supply of hot water will not run out as it can with a traditional unit. I think these were invented by the parents of teenagers. (you never know)
Typically though, a tankless heater can supply only enough heated water for one source.
At first, the tankless water heaters on the market could run only on electricity, now, however, you can easily find natural gas tankless heaters.
The cost savings comes in when there isn’t a supply of water that needs to be kept at a certain temperature like a traditional water heater. See our page on how to wrap a tank with a water heater blanket for better insulation against heat loss. The expense comes in at installation (too complicated for most people to do themselves) as well as when, quite often, more than one needs to be installed. Over the long run, you will probably save more than spend more with a tankless unit when compared to a traditional water heater. Another option is to install a tankless system as a supplement to a traditional water heater. The savings here depends upon your situation. Return from Tankless Water Heater to Home Energy Efficiency
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