Tanks and tankless units have operational differences you need to be aware of.
Typically, you can expect to use only approximately 70% of the tank’s volume; i.e., a 50-gallon tank should provide approximately 35 gallons of hot water. The burner initiates to reheat the tank, but the latter can only recover at approximately 1 GPM. Thus, the recovery wait begins. This stored volume, in combination with the standing pilot light, usually results in an Energy Factor (EF) in the low range of 0.53 ~ 0.62 for gas fired, tank-type water heaters. “Energy factor is what the end user pays for. A water heater with an energy factor of 0.62 means that for every dollar spent heating water, $0.62 is being used to heat the water. The remaining $0.38 is wasted.”
Tank Operation: A tank-type heater stores a volume of water at an approximate set temperature 24/7/365. As you draw hot water at your fixture, cold water replaces the outgoing water in the tank and the temperature of the water in the tank begins to drop.
If the tank has been set to a high temperature (which wastes energy and shortens its life) and the flow rate is fairly low, it will provide adequate hot water for one reasonably long shower.
If the tank is set near the ideal 120°F, one shower will start to “run cold” in as little as 15 minutes!
Tankless Operation: Takagi units operate differently. Each unit modulates fully between its minimum and maximum BTU/hr input ratings. It only uses the amount of gas needed to do the job, so there’s no waste!
A Takagi water heater requires a minimum flow of 0.75 GPM (the T-K3=0.50 GPM) to initiate the burner. Without this minimum flow, the heater may continuously run and heat exchanger would overheat
Whatever the maximum flow rate for any tankless unit that flow is continuous for as long as there is demand. And unlike a tank-type heater, the temperature remains constant at the selected set point. There is no stored water and no pilot light, so Takagi’s high EF range is between 0.81 and 0.94, depending on the model and gas type.