After heating and cooling, water heating is the largest consumer of energy in U.S. residences, accounting for approximately 15% of electricity usage and 25% of gas usage
Power Vented Hot Water Heaters
The most common type of system is a conventional tank system that heats hot water and stores it in a tank until it is needed. Hot water storage systems use energy to heat the hot water, and then to maintain the temperature while heat is lost through the walls of the tank. Accordingly, the larger the tank, the more energy lost, so you want to make sure you do not install an over-sized unit. A power-vented unit vents exhaust gasses directly to the exterior of your home, bypassing your chimney and ensuring exhaust gasses do not enter your living spaces.
Tank-less Water Heaters
On demand, or instantaneous systems heat the water when needed. Since water is heated instantaneously, there are no storage losses as in a conventional tank system. Demand systems are more expensive than tank systems, sometimes costing 2 or 3 times as much, but they last an average of 20 years versus 13 years for a tank system. Other advantages of demand systems are their compact size and generally easier maintenance.
Indirect Water Heaters
Indirect systems utilize the boiler used for providing heat to the home for the additional purpose of heating domestic hot water. Water heated by the boiler is stored in a tank until it is needed. Indirect systems have the added cost of a tank, but the improved efficiency generally offsets this cost; in fact, these may be the most efficient systems available today.