When you have a tank full of water to keep hot it takes a lot of fuel. That's what is happening when you own a standard tank type hot water heater. Tankless water heaters only heat the water to be used. When a hot water tap is opened water is forced into the heat exchanger where it is heated and sent to the tap. So by heating only the water being used you can save money and energy.
An ENERGY STAR certified gas tankless water heater uses a secondary heat exchanger to use 9 percent less energy than a conventional gas tankless water heater. The secondary heat exchanger extracts more heat from the combustion gas, cooling it to the point where there is condensation – hence these types of heaters are called “gas condensing.” These gas condensing tankless water heaters, like gas condensing furnaces, require venting through a vertical PVC pipe and a condensate drain.
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