Tankless water heaters use either an electric element or a gas burner to
heat water directly as is it needed without the use of a storage tank.
When the water tap is turned on, the tankless water heater tests the
water temperature and determines how much the water needs to be heated
up. Then in a gas-fired tankless water heater, a gas burner is turned on
to directly heat the water as it passes through the unit. Electric
tankless water heaters use an electric element to heat water as it flows
through the unit. Therefore, these water heaters are able to provide a
constant supply of hot water throughout your home.