The chief advantage of a tankless or instant water heaters is energy efficiency. Since they heat water on demand, there is no need to maintain a large reservoir of water at high temperature, reducing wasted energy and lowering the energy cost of heating water by as much as 20 percent.
Instant water heaters are also much smaller than traditional water heaters. This allows them to be installed closer to the point of use, and a single home may have a number of heaters to support individual bathrooms and the kitchen. This means that it doesn't take as long for hot water to flow to any individual tap, and water use in one room does not affect the hot water available for other household members.
Tankless hot-water heaters also tend to last longer than traditional hot-water heaters. A storage tank hot-water heater generally lasts 10 to 13 years before it needs to be replaced, while an instant hot-water heater may last 20 years or more. In addition, when a storage tank fails, it can result in considerable water damage if the tank itself becomes damaged and leaks.
Instant hot-water heaters also work well with solar water-heating systems. A solar hot-water tank keeps its contents warm, reducing the extra heating necessary to get the water up to a suitable temperature.