Unlike tank style water heaters, an electric tankless water heater heats water as it enters the home. Most heaters use electricity, natural gas or propane to heat water. Heating a large amount of liquid takes a lot of energy and is one of the least efficient uses of energy. The best-rated electric tankless water heater tend to be more efficient than normal heaters and they heat water faster.
In the case of a tank style heaters, unless it is well insulated, there can be significant loss of energy through simple heat exchange with the air outside the tank. Since an electric tankless water heater doesn't use a tank, there is a minimal loss of heat through heat exchange. Tankless heaters do require a large power source, but they only use power when the hot water is in use.
They are capable of producing over two gallons a minute continuously. There is no waiting for the system to recover and heat another tank of water. In the case of electric storage heaters, this can take twenty minutes or more. The recovery time for gas heaters is slightly longer.
One of the greatest advantages of a tankless water heater is that it produces hot water continuously as you need it. There is no waiting for a tank to heat up.