Storage Tank

• In an electric water heater, water is drawn into a large storage tank where it is heated. These can be slow to fill and reach temperature, and require periodic re-heating to keep the water hot.
  
  

On Demand

• An on demand water heater consists of a series of pipes wrapped around a high-efficiency heating element. Water is heated as it is drawn, and only as needed.
  
  

Efficiency

• On demand water heaters can save your household money when it comes to electricity bills. Keeping a tank of water above a hundred degrees for an extended period can require a large expenditure of energy.
  
  

Capacity

• Many on demand water heaters can only provide three to five gallons of hot water per minute, and can't keep up in high-demand situations. Larger models or multiple units can help increase capacity for large households.
  
  

Expense

• While on demand water heaters save on energy costs, the units themselves are usually much more expensive than traditional water heaters.