The four water-heater types and how each makes hot water
Same job, four machines. A tank stores hot water (a gas burner + flue, or two electric elements); a tankless heats it on demand as it flows past a heat exchanger; a heat-pump unit moves heat from the room air instead of making it (~3–4× as efficient). That choice drives both the installed price and the running cost.
What this diagram shows
Four side-by-side cutaways of water-heater types. A gas tank: a storage cylinder with a gas burner at the base and a flue venting up the center and out the top, cold water in and hot water out at the top. An electric tank: the same storage cylinder with two electric heating elements and no flue, so it recovers more slowly. A tankless unit: a small wall-mounted box with no storage, where water is heated on demand as it passes a heat exchanger over a burner — a gas model needs new venting and a larger ¾-inch gas line. A heat-pump (hybrid): a storage tank with a heat-pump module on top that pulls heat from the room air rather than generating it, making it about 3 to 4 times as efficient but needing a condensate drain. A bottom strip notes the choice drives both the price and the running cost.
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Free water heater size calculator using the DOE first-hour-rating method — count your busiest hour's hot-water uses and get the FHR to shop for.
