Tankless Water Heater Pumps & Hot Water Circulating Systems
Generally speaking, tankless water heaters are not compatible with hot water recirc or circulating pumps due to the minimum flow rates on the pump side, and over-temperature problems on the heater side
They are however compatible with hot water demand system pumps as long as the pump has enough power to create the flow needed to turn on the water heater.
Problems with tankless water heater flow rates
Tankless water heaters require a minimum flow of water to turn on or keep the heater turned on. Drop below that flow rate and the heater shuts down. Typical minimum flow rates are 1/2 to 3/4 gallons per minute.
If you want to use one of those "luke-warm" circulating systems like the Autocirc1, RedyTemp, or Grundfos systems you are out of luck. They don't produce enough flow to turn on the water heater, so they would not be of much use.
There are some models of tankless water heaters that can be used with traditional circulating pumps. However, it kind of defeats the purpose of the tankless water heater since you will use substantially more energy with this type of recirc system than without it. You will save water though.
A comparison of some popular tankless water heater brands with min. flows listed: Tankless Compared
Potential shower problems with incorrectly sized tankless water heaters
If your tankless water heater is sized too large or too small you may suffer temperature control problems taking showers and the like. The temperature of the shower is controlled by the ratio of hot water to cold water produced by the mixing valve.
If you want hotter water then you adjust the valve for more hot and less cold water. If your heater is already putting out the most hot water it can, then increasing the flow will simply lower the temperature since the heater won't be able to keep up. This is more of a problem with electric heaters than gas because electric units tend to have a lower maximum capacity than gas heaters.
On the other hand, if you want a lower temperature, and you adjust the valve accordingly by reducing the amount of hot water and increasing the cold. But if that results in a hot water flow rate lower than the minimum required by the heater, it shuts off.
You aren't aware of the change until a minute later when the cold water hits you. You immediately re-adjust for warmer water and in a minute or so it finally arrives. This is known as the cold water "sandwich" in the water heater industry.
So it's very important to get the correct size tankless water heater, not to big and not too small.
Hot water demand systems save water and energy
Since hot water demand systems do not run continuously, only for a few seconds to get the hot water to the fixture, they work fine with tankless water heaters, as long as they can produce the required minimum flow rate. Most circulating pumps including demand systems don't create enough flow to turn on a tankless water heater. More about tankless water heaters.
The Chilipepper has more than enough flow to turn on any brand of tankless water heater and any model.
Turn your tankless water heater green today with a Chilipepper hot water demand system.