Direct heaters store anywhere from 20 to 80 gallons of hot water in a storage reservoir. Hot water comes from the top of the tank to your tap. A cold water line at the bottom of the tank constantly fills the tank, replenishing the hot water that comes off the top. Depending on the type of fuel the heater uses, some form of burner, valve, or heating element connected to one or more thermostats, warms the cold water entering the tank.
Indirect water heaters also require a storage tank, but use your home's furnace or boiler to heat fluid pushed through a coiled pipe called a heat exchanger, which runs through that storage tank. The water tank stores energy and allows the furnace to turn off and on less often, saving energy. The combination of an indirect water heater, a high-efficiency boiler and a well-insulated tank can be the least expensive means of heating water.
Both direct and indirect heaters constantly heat the water in the tank even when a hot water tap isn't running. This heating results in an energy cost called standby heat loss. Only tankless water heaters such as demand, or tankless coil, systems avoid standby heat loss entirely. Heavily insulated tanks can significantly reduce it and lower annual operating costs. The Department of Energy recommends tanks with a thermal resistance, or R-Value, of R-12 to R-25.
Installation & Care
Correct installation and regular maintenance of your water heater can optimize its energy efficiency. It's best to contact qualified plumbing and heating contractors for installation. They will consider fuel type, climate, building code requirement, and safety issues when installing your heater.
Both indirect and direct water heaters benefit from regular maintenance. Maintenance tasks for indirect systems vary depending on the manufacturer. Most direct heaters can benefit from common maintenance tasks such as flushing a quart of water from the tank every three months, and checking temperature and pressure every six months. Your direct water heater's anode rod should be inspected every three to four years.
Fuel Types & Energy Efficiency
Both indirect and direct systems can use gas, oil, propane and electricity. When choosing a water heater, you should consider the energy factor, or EF, listed among its specifications. EF is a measurement of a heater's energy efficiency, based on daily usage, and accounts for recovery efficiency, standby loss and cycling loss. Be careful to include fuel cost when making your decision. A higher EF system using a more expensive fuel will cost more to run.