A tankless water heater is a type of water heating system that heats water on demand, rather than storing it in a tank. This means that it provides a continuous supply of hot water, making it ideal for households with high hot water needs. When a hot water tap is turned on, cold water travels through a pipe into the unit, where it is heated by either gas or electricity. One of the main advantages of a tankless water heater is its energy efficiency. Since it only heats water when needed, it can reduce energy costs compared to traditional tank water heaters, which continuously heat and store water. Additionally, tankless models typically have a longer lifespan and take up less space, making them a popular choice for modern homes.