Let me describe how this water heater became into being.

In my home it took about 45 seconds for hot water to arrive at my kitchen sink from my household 50 gallon hot water tank. Besides being quite inconvenient, this wasted both electricity and water. The EPA estimates an average American household wastes more than 3,650 gallons of water each year while waiting for hot water to get to the fixture.

To alleviate this problem I installed a small electric 2.5 gallon hot water heater tank in the crawl space, directly beneath the sink. So that hot water would not run out, this tank’s source of water was from the household 50 gallon hot water heater.
After about two years that small water tank failed, and I installed a new similar hot water tank in the same space. In about one year that tank failed catastrophically, galvanic corrosion caused the enclosure to rupture, causing the crawl space to be flooded with hot water. Fortunately, the tank was in the crawl space, but it was jetting out hot water for 2 or 3 days before I discovered the problem.

I then purchased a tankless water heater and installed it it the cabinet under the sink. I do not have 240 volt service under the sink (who does?), but there was an 120 volt outlet from a 20 amp circuit breaker with nothing else on that circuit. The tankless water heater I purchased has the highest wattage of any 120 volt tankless water heater permitted by building code, but even then this tankless water heater’s performance is grossly inadequate.

With this tankless water heater the water flow delivery is quite low,about 0.3 GPM, and the water temperature is not very warm. 2400 watts (120 volts x 20 amps) may sound like sufficient power but it isn’t. 2400 watts =136 btus.

The EPA sets requirements for faucet flow rates. Maximum flow rates for kitchen faucets is much higher than, for instance, bathroom faucets. The EPA’s WaterSense standard flow rate at a kitchen sink is 2.2 GPM, and a desirable flow rate of 1.5 GPM for a kitchen sink is now mentioned, but not required. However, 136 btus at a flow rate of 2.2 gallon/minute would raise water temperature only 7.4°F. Even with the EPA’s new desirable reduced flow rate of 1.5 GPM at a kitchen sink, the temperature rise would only be 10.9°F, whereas, to be useful, a water temperature rise of 65°F is necessary.

Finally, I looked at other methods such as hot water recirculation systems. In a recirculation system, hot water is delivered to faucet from main household 50 gallon tank to faucet. The water is recirculated from faucet back to 50 gallon tank with a pump, so the hot water delivery pipe remain full of hot water. These systems do deliver instant hot water, but cost the homeowner extra electricity, require maintenance, and cannot be retrofitted in an existing home without significant expense. In addition, the EPA now requires recirculation systems to operate with programmable timers, meaning that hot water will not always be instantly available. So, recirculation was ruled out for my home.

The advantages of this invention are low cost, longevity, zero maintenance, and convenience, plus saving the homeowner both energy and water.
Instant hot water is always desirable, for example, at a kitchen sink so one can quickly rinse or wash a glass or dish or pan. Or, a bathroom sink might be located some distance from a home’s main hot water heating tank. It is rather unlikely that all sinks in a residence can be located close to the home’s main hot water heating tank, so there is a benefit to point-of-use water heaters, the benefit being quite a bit less energy and water wasted while waiting for hot water to arrive, and,of course, the convenience of having the hot water instantly.

There are many different types of point-of-use water heaters manufactured today, each with advantages and disadvantages. A description of such advantages and disadvantages is below.

I. Small standard water tanks with heating element immersed in tanks water.

Space under a sink is limited so small (2.5 gallon, or so, tanks) have been installed, but these tend to run out of hot water, of course, are subject to corrosion, require maintenance, additional plumbing, plus they require a dedicated electric circuit. A 2.5 gallon tank may be small compared to other hot water tanks, but it does take up a significant amount of undersink space. If a person is running hot water for a time, the hot water will be gone, and once the 2.5 gallon of water is used, there will be a very lengthy time before any hot water is available, and, of course, if the hot water faucet is turned on during this waiting period, the waiting
time for hot water will be extended.

II. Water circulation systems. These systems circulate water from just under faucet back to the home's hot water tank. Water circulation systems are expensive to install, require maintenance, and consume extra energy. Because of the energy losses new WaterSense specifications require timers on circulation systems. This results in times when hot water is not instantly available.

III. Tankless water heaters are quite efficient but require high energy input. To deliver more than 1/4 GPM at desirable temperature for use at kitchen sink is not possible with the 110 volt power source that is usually available under a kitchen sink. The tankless would require a high cost, high wattage 240 volt power input, which would be difficult and expensive to retrofit in a home. Even the EPA recognizes that 1/4 GPM hot water delivery is unacceptable at a kitchen sink, and other sinks as well.

Again, this water heater receives water from the home's 50 gallon conventional tank. With it's heating element wrapped around the outside of the tank, this water heater heats both the mass of the tank and the mass of the water. and then mixes hot water in its tank with any cooler water arriving through lengthy plumbing to kitchen. 

Finally, tankless water heaters require regular descaling maintenance, plus the payback time has been calculated at 22 years. Whereas, this invention's payback is less than 4 years.