Water circulates through a large coil and is heated on demand. Tankless systems can save energy associated with standby losses. But, depending on the type of system installed, they can result in higher overall energy use.
instantaneous recirculating tankless systems
A small pump continuously circulates water in a loop so that hot water is always available. This system provides instant hot water at any tap. However, the cost of recirculating hot water can result in the highest overall cost of any hot water system.
demand recirculating tankless system
This system is similar to the instantaneous tankless system, but only circulates hot water when the user activates a button. A small pump operates on-demand to provide nearly instantaneous hot water at any fixture. This system efficiently provides quick and convenient hot water because hot water only circulates on-demand.