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Internal Tankless Water Heater…A Close Look

Date: February 8, 2018

We recently learned about the different types of water heaters. Tankless water heaters come in two varieties; internal and external. Let’s take a detailed look at what an internal tankless heater is and how it produces hot water. Take a trip into your basement. If you do not see a standalone fuel-fired tank (gas, electric, oil), usually 40-100 gallons in size, chances are you have a tankless water heater.

People often mistake their expansion tank for a water heater. An expansion tank is typically piped above or alongside the boiler. It resembles a 20lb propane tank and is usually red, green or gray in color.

air scoop

In older systems, they look completely different and are usually strapped to the basement ceiling. Neither are related to your domestic hot water e.g. showers, laundry, dishwasher.


As the name implies, internal tanklesses sit inside either a steam or forced hot water boiler. These little workhorses have the ability to create extremely hot water however, they are relatively inefficient compared to other hot water options. Moreover, their ability to generate supply (gallons per minute) is limited. Because they do not store domestic hot water, but rather produce it on demand, they must rely on the boiler they sit within to remain hot at all times. This means a boiler with a tankless water heater must maintain a minimum temperature 12 months a year. Have you ever wondered why, in the dog days of July, you hear your oil burner firing? It is because the internal boiler temperature, measured by the aqua-stat, is cooling down to a point where the tankless cannot produce hot water at the desired temperature or and/or rate. Unfortunately, boilers and aqua-stats are not smart enough to know when you are away for a week or two vacationing and won’t be showering or doing laundry. While you’re away your oil burner will continue to burn oil while firing. This can be expensive particularly in older, inefficient boilers that don’t retain heat well.

Lets take a look at an internal tankless coil and how it produces domestic hot water.

tankless square
Pictured left is a square tankless coil. Notice there are two copper pipes connected. The bottom pipe is cold water entering the coil while the top pipe is hot water exiting the coil. There are two additional components pictured that play an important role in delivering a reliable and comfortable hot water supply. See the gray colored box with electrical connections? That is called an aqua-stat. Think of it as you would a thermometer you would use to take your temperature when you’re not feeling well. It has a probe connected to it that measures internal boiler temperature. When the boiler temperature approaches a pre-determined low limit, the aqua-stat will fire the oil burner to heat-up the boiler water. The brass colored part with the black hand wheel in the foreground is a mixing or tempering valve. We’ll learn its function in a moment.

tankless square front

At right is a cross section of the same tankless coil. This particular coil is rated to deliver 5 gallons per minute of hot water. As you can see, it is made up of several feet of copper coil. Hot water is made when cool or cold water enters the tankless and travels through the entire coil. A heat transfer takes place as it travels, heating the water. Unfortunately when the water exits the coil it is extremely hot and must be tempered otherwise it could cause scalding. This tempering is the function of the the mixing valve. Where extremly hot water is mixed with cold water to a comfortable temperature. The black hand wheel can be turned to adjust hot water temperature up or down. The lower red colored cap on the right side of the tankless is the tapping where the aqua-stat and probe/well attach.

If you have an internal tankless coil heating your domestic hot water and would like to learn about options that will reduce oil consumption and save money please click below.

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