What does a tankless coil do? In theory, the tankless coil will deliver hot water to your faucet all the time without the use of a water heater. The knob under my finger is how you set the temperature of the water. When you turn your faucet on, the water is heated as it flows through a heating coil installed in the boiler. This makes sense when the heating system is on in the winter, but is expensive to run in the summer, since the heating system has to turn on every time you need hot water.