After the hot water has been dispensed during normal usage, the tank immediately starts the reheating process which brings the water temperature back up. During this time it is normal that the spout may drip for few minutes while the water is reheating in tank. What you see is steam condensing in the faucet.

If the Water dripping is continual it could be:

  1. Low water supply pressure below 35 psi to the heating tank.
  2. The Faucet water supply tubes may have a kink, loops, or a section that is positioned too low causing abnormal water flow.
  3. There should be no obstructions such as any kink, sag or loops in the faucet tubes.

Check water supply valve is fully open. Check the water pressure should not be below 35 PSI. Low water pressure will cause the expansion chamber not to function properly.

It is better to have the tank installed close under the faucet to avoid kinks, sag, and loops.

If a Filter is connected in line, check if the water is flowing out from the filter with normal pressure.