Today many people are concerned with conserving water and energy. One of the ways to save on both these is by using an on-demand water heater. A traditional water heater is made of a huge tank, filled with water. This water stays hot and waits until needed to come out. When using the hot water you may run out of available water. An on demand water heater does not waste energy keeping water hot until needed, rather it heats as needed. An on-demand water heater is very small and takes up lots less space in the room.