Can a Tankless Water Heater Run Out of Hot Water?

BMManu KPublished on: Jul 16, 2025

A properly sized tankless water heater won’t “run out” of hot water in the traditional sense - it provides hot water on demand, continuously. However, if demand exceeds its flow rate (e.g., too many showers and appliances running at once), it can struggle to keep up and cause a drop in temperature.

What “Endless Hot Water” Really Means?

Tankless water heaters are also known as on-demand systems which heat water as it flows through the unit, rather than storing it in a tank. That means:

No waiting for a storage tank to refill
Hot water for as long as you need it
Increased energy efficiency as you’re not constantly heating water

But “endless” doesn’t mean unlimited power. If you try to use more hot water than the unit can handle at once, you’ll hit a flow rate limit.

For example: Running two showers, a dishwasher, and a laundry cycle at the same time on a small unit may cause lukewarm water.

Why Does Proper Sizing Matter for Tankless Water Heaters?

A tankless water heater can deliver endless hot water but only if it’s properly sized for your household’s hot water demand.

At Go Lime, we carefully assess:

How many people live in your home
How many fixtures and appliances use hot water
Whether they’re used simultaneously
Groundwater temperature (especially important in Ontario’s colder months)

If your system is too small, it won’t keep up - no matter how new or advanced it is.
That’s why sizing is the first step in any tankless installation we do.

Learn more about our Tankless Water Heater Installations

What Happens If You Use Too Much Hot Water at Once?

Even though tankless systems heat water continuously, they still have a maximum flow rate measured in gallons per minute (GPM).
If your household demand exceeds this rate, you’ll notice a drop in temperature or weaker hot water output.

Example from an Ontario Home: A mid-sized Mississauga home with:

3 bedrooms
2 bathrooms
A dishwasher and laundry used daily

If installed with a 9.0 GPM unit, this home can easily run:

2 showers and a dishwasher at the same time OR A shower, kitchen tap, and laundry load

But if the unit only supports 5 GPM, that same usage would likely cause lukewarm water or cold bursts during peak times.

Not sure what your system’s flow rate is? Ask our experts

What Should You Do If Your Tankless Water Heater Can’t Keep Up?

If your tankless water heater struggles to maintain hot water when multiple fixtures are used, try the following:

Check your system’s rated GPM
Stagger your appliance usage
Upgrade to a larger unit
Consider dual-system setups for large homes

Do Tankless Water Heaters Help Save Money Long-Term?

Absolutely. Unlike tank-style water heaters that heat water 24/7 (even when you don’t need it), tankless water heaters only run when hot water is called for.

That means: