Buying Guide

How Do Tankless Water Heaters Work?

Tankless Water Heater Flow Rate
A chart depicts the flow rate for various fixtures.

Hot water usage is measured in gallons per minute (GPM). This quantifies the steady flow rate of hot water that a water heater will produce. 

To determine the GPM needed for your home, add up GPM for the major fixtures / appliances that you expect to use at the same time.

If you typically run a bathroom faucet with a flow rate of 1.0 GPM and shower head with a flow rate of 1.5 GPM simultaneously, the flow rate through the water heater would need to be at minimum 2.5 GPM.

Ground Temperature for Tankless Water Heaters
A map displays average ground temperature across the United States.

When choosing the best tankless water heater for your home, it’s important to consider ground water temperature. How cold is your incoming water? This information is needed to determine the temperature rise.

Use the map above to help gauge average ground water temperatures, and start with the expected coldest ground water temperature for your area. Then, calculate the difference between your incoming ground water temperature and your desired output temperature. For most uses, you’ll want your water heated to around 100 and 115 degrees. 

Your required flow rate is 2.5, and you live in Atlanta where the groundwater temperature is 55 degrees. You would need a water heater that produces a minimum temperature rise of 45 degrees.

Additional Tankless Water Heater Considerations
A person is adjusting the flow on their kitchen sink.

When choosing between gas vs electric tankless water heaters, identify how you would like the water to be heated. Tankless electric water heaters use an electric element to heat the water, whereas tankless gas water heaters use a gas burner.

Each tankless water heater lists the max GPM flow rate at different required temperature rises. Once you have determined peak water flow demand in gallons per minute, and you know what your required temperature rise is, you can select the best tankless water heater for your needs. 

See below for a list of reasons why you should consider one for your home.


  • Tankless hot water heaters can provide a near endless supply of hot water for long, comfortable showers or relaxing soaks in a bathtub.
  • They protect the household from scalding with unique features like self-diagnostic programs, advanced sensors that keeps the unit from overheating and automatic shut-off systems.


  • Tankless designs are compact and space-saving.
  • Ideal for use in new homes, retrofits, additions and vacation homes, as well as outdoor sinks, jacuzzis and pool showers.
  • Many include advanced features like digital display thermostats and accessories like remote controls.


  • Most models lower household energy bills by as much as 40 percent.
  • A tankless water heater, on average, lasts up to 20 years. This reduces the amount of waste in landfills and fossil fuels used to heat water.
  • ENERGY STAR® qualified models are also available.

See our water heaters cost guide to learn more about national averages. Reach out to our home services team for more information on water heater installation.