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A tankless water heater is a unit which typically mounts on a wall of your home. Some models are meant for outdoor mounting while others can be indoors. Compact in size, they make great space saving alternatives to the traditional water heater. They are available as either gas or electric models and can deliver anywhere from 4 to over 6 gallons per minute of hot water to your home. Some units can shave off 50% on you annual water bill. You can buy a model which will heat up just one sink in your home or the entire hot water supply for your house. Most tankless water heater units can replace the current water heater you own.