A traditional water heater consists of a large insulated tank that holds a certain volume of water, which is heated and maintained at a set temperature until it is needed. Traditional water heaters have been widely used for many years due to their simplicity and affordability. However, they do have some drawbacks. Because they continuously heat and store water, there can be standby heat loss, where heat escapes from the insulated tank, leading to energy inefficiency. Additionally, if the stored hot water is depleted, there may be a delay before the heater can reheat a new batch of water.

On the other hand, tankless water heaters are more efficient and take up less space compared to traditional water heaters. They only heat water when it's needed which reduces waste and with tankless heaters, you'll always have hot water as long as there is fuel (gas or electricity) available, so you don't have to worry about running out during long showers, or when using multiple fixtures at once. Unlike traditional heaters, tankless heaters don't experience standby heat loss, where heat escapes from stored water—this is because tankless heaters don't store water in the first place!