Can I use a closed-loop hot water system with a tankless system to minimize water wasted when a faucet is opened?
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Having experience with solar hot water collectors and flow-through water heaters as a backup system, this can be accomplished.
What you will need to verify when purchasing a tankless water heater is that its heating element is triggered by the temperature of the water and not flow. This will allow the tankless water heater to operate only when the water temp is below a set value.