Two main types of water heaters are on the market these days—tanked and tankless.  Traditional water heaters have a tank with a capacity of 40-80 gallons of water.  These tanks keep the water heated at all times of the day, regardless of the demand for it.  They are great for bigger families who put out a lot of demand for hot water all at once.  For example, if multiple showers are running at the same time, these tanks can keep up with the hot water demand in the two different locations.  However, the downside is that they will run out of hot water and you are wasting energy by always heating water, even when you don’t need it.

Tankless water heaters are also called “on-demand” water heaters, and heat the water only when it is called for.  As soon as you turn on your faucet, water flows to the tankless water heater, getting instantly heated, and travels to the faucet.  A minor downside to tankless water heaters is the fact that they only output a specific amount of hot water at a time, so having multiple showers running at the same isn’t really an option.  However the benefits greatly outweigh any negatives.  Not only are you saving money by not heating a tankful of water constantly, but you are also helping the environment by consuming less energy.  Not to mention that you never run out of hot water.