Book excerpt: This Measure Guideline provides information to help residential builders and retrofitters with the design, specification, selection, implementation, installation, and maintenance issues of transitioning from tank-type water heaters to tankless water heaters. The report compares the differences between tankless and tank-type water heaters, highlighting the energy savings that can be realized byadopting tankless water heaters over tank-type water heaters. Selection criteria and risks discussed include unit sizing and location, water distribution system, plumbing line length and diameter, water quality, electrical backup, and code issues. Cost and performance data are provided for various types of tankless and tank-type water heaters, both natural gas fired and electric. Also consideredare interactions between the tankless water heater and other functional elements of a house, such as cold water supply and low-flow devices. Operating costs and energy use of water distribution systems for single- and two-story houses are provided, along with discussion of the various types of distribution systems that can be used with tankless water heaters. Finally, details to prepare forproper installation of a tankless water heater are described.