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Tankless water heaters heat water only when needed. They can provide a continuous supply of hot water, eliminating the unpleasant experience of running out of hot water too soon.
Because hot water is produced on demand rather than heated ahead of time and stored, tankless water heaters require less energy to operate. Traditional tank water heaters heat water and store it for later use. Keeping this water warm around the clock for whenever the need arises requires continuous energy use.