Indirect water heaters are a more efficient choice for most homes, even though they require a storage tank. An indirect water heater uses the main furnace or boiler to heat a fluid that’s circulated through a heat exchanger in the storage tank. An indirect water heater, if used with a high-efficiency boiler and well-insulated tank, can be the least expensive means of providing hot water. Indirect systems can be fired by gas, oil, propane.

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