Water Heaters 8 min read

How Does a Gas Tankless Water Heater Work?

Basic Principles of a Gas Tankless Water Heater

A gas tankless water heater operates by heating water as it flows through the unit, without a storage tank. This on-demand system delivers a continuous supply of hot water whenever you turn on a faucet.

When a hot water tap is opened, cold water enters the unit through an inlet pipe. Inside, a gas burner ignites to heat the water instantaneously. As cold water flows through a heat exchanger, the heat from the burner transfers to the water, raising its temperature to your set level.

How This Differs From a Tank Water Heater

A traditional tank heater stores 40-80 gallons of water and keeps it hot 24/7 — even when you're sleeping or at work. A tankless unit only burns gas when you actually need hot water. This fundamental difference is why tankless units are 20-30% more energy efficient.

Key Components

  1. Gas Burner — Located at the bottom, it ignites when hot water is requested and burns natural gas or propane to create heat
  2. Heat Exchanger — Made of copper or stainless steel, it transfers heat from the burner to the water flowing through it. This is the core of the system
  3. Water Flow Sensor — Detects when you open a hot water tap and signals the heater to ignite
  4. Venting System — Safely removes combustion gases (carbon dioxide, water vapor) from your home
  5. Control Panel — Allows you to set your desired water temperature and displays diagnostic codes
  6. Gas Valve — Controls gas flow to the burner, opening when hot water is needed and closing when demand stops
  7. Safety Features — Flame sensors, high-temperature cutoff switches, and overheat protection

The Ignition and Heating Process

Here's what happens in the 2-3 seconds after you turn on a hot water faucet:

  1. The flow sensor detects water movement and sends a signal to the control board
  2. The control board opens the gas valve, allowing fuel into the burner chamber
  3. An electronic igniter creates a spark to light the gas-air mixture
  4. The flame sensor confirms ignition and signals the control board to continue
  5. Cold water flows through the heat exchanger, absorbing heat from the burner
  6. The control board monitors outgoing water temperature and modulates the flame to maintain your set temperature
  7. When you close the faucet, the flow sensor detects the stop, the gas valve closes, and the burner shuts off

This modulation feature is key — the unit adjusts flame intensity based on demand, which maximizes efficiency.

Advantages of Gas Tankless Water Heaters

  • Endless hot water — no tank to run empty, perfect for large families
  • 20-30% energy savings over traditional tank heaters
  • Compact, wall-mounted design frees up floor space
  • Longer lifespan — 15-20+ years vs. 8-12 for tank heaters
  • No risk of tank flooding — a common concern in Chicago basements
  • May qualify for energy tax credits

Disadvantages to Consider

  • Higher upfront cost — $3,000-$5,500 installed vs. $1,200-$2,500 for tank units
  • Limited flow rate — may struggle with simultaneous demands (e.g., shower + dishwasher)
  • Gas line requirements — may need a larger gas line or upgraded venting
  • Annual descaling needed — especially important in Chicago where water hardness averages 8-10 grains per gallon

Chicago-Specific Consideration

Chicago's groundwater drops to 35-40°F in winter. Your tankless unit must raise water temperature by 70-80 degrees (vs. 40-50 in warmer climates). Make sure you choose a unit rated for cold-climate performance — not just the manufacturer's warm-climate flow rates.

Maintenance Tips

  • Flush and descale annually — removes mineral buildup from the heat exchanger. Essential in Chicago's hard water
  • Clean the burner — remove debris with a soft brush or compressed air
  • Inspect the venting system — check for blockages (leaves, bird nests, ice in winter)
  • Check for gas leaks — inspect connections regularly for loose fittings or corrosion
  • Test the T&P valve — ensure this safety valve operates correctly
  • Schedule professional inspection — at least once a year

Considering a tankless water heater for your Chicago home? Call Plumbers 911 Chicago at 833-758-6911 for expert installation and repair throughout the Chicago metro area.

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