A gas water heater is a tank that heats water from a gas-fired burner located at the bottom of the tank. Hot water starts at the bottom and rises upward, where it is drawn off the top of a discharge tube.

An electric water heater is a tank that heats water with high-voltage electric heating rods that run vertically through the tank. Water is heated starting at the center of the tank and radiating outward.

Tankless water heaters, also known as demand-type or instantaneous water heaters, provide hot water only as it is needed. They don’t produce the standby energy losses associated with storage water heaters, which can save money. Here you’ll find basic information about how they work, and whether a tankless water heater might be right for your home, Tankless water heaters are smaller than conventional water heaters and take up less storage space, making them a great choice for small homes.

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, electric, solar energy, or a combination of any of these.