Compared to tank water heaters, tankless water heaters are safer, take up less interior space and can save money on utilities, as well as upgrading the ecofriendliness of your home. For example, the Stiebel Eltron electric tankless water heater (our #2 pick) delivers hot water at up to 4 gallons per minute with 18 KW of heating energy, yet because it only heats the water on demand, uses far less energy overall than a storage tank water heater of similar output capacity. In addition, even gas tankless water heaters are more efficient and safer than tank water heaters, since they use forced venting for exhaust, don’t store hot water and don’t rely on an exposed pilot light.