These have a minimum flow – if too little water is flowing out of them, they don’t fire up and heat the water. This means that if you install a low flow showerhead you can end up having a cold shower. It’s usually only a problem with older systems, because newer ones have lower minimum flows. You can buy low flow showerheads designed to work with instantaneous hot water, but they can be hard to find and expensive.
You can use a bucket to work out the minimum flow your system needs to heat the water. Adjust the shower till it’s the temperature you’d normally shower at, then reduce the flow (while maintaining the temperature) until the hot water cuts out. Increase the volume slightly and then hold a bucket under the shower for 30 seconds, to work out the number of litres per minute (a standard bucket is 9 litres).
If your minimum flow is higher than 9 litres per minute, then a 9 litre per minute low flow showerhead or flow restrictor is going to make your shower cold. Unless you’re a fan of cold showers, you’re better off keeping the old showerhead and taking short showers (or upgrading your hot water system). If your minimum flow is less than 9 litres per minute you should be able to install a low flow showerhead, although it might be wise to use a flow restrictor instead. These achieve the same thing, but you can buy them for less than $10 from hardware stores, and you can easily take them out again if you still have trouble keeping your shower hot.
Low flow showerheads don’t tend to work well with gravity fed systems either. However these systems tend to have fairly low flow rates anyway, so you’re not using as much water as people with other systems. Try to have shorter showers, but don’t worry too much about your showerhead.