Tankless systems, also known as on-demand water heaters, provide hot water only when needed. Unlike traditional water heaters that store hot water in a tank, these systems heat water directly as it flows through the unit. This can lead to energy savings since they do not maintain a constant supply of hot water. These systems are compact and can be installed in various locations, making them ideal for smaller spaces. They typically have a longer lifespan than traditional heaters and can supply hot water continuously, which is beneficial for households with high hot water demands, such as those with multiple bathrooms or appliances.