For combustion air, a gas-fired hot water heater draws in outside air or pulls it from inside the house. Burnt exhaust gases are expelled through a chimney, a vertical flue or horizontally via a pipe through a sidewall.
A direct vent water heater incorporates a closed horizontal piping system through a sidewall to the outside for intake and exhaust air. This creates an air-tight combustion system.
Plumbers will install a direct vent heater when air-tight construction of a house makes it difficult for a water heater to draw sufficient combustion air from inside the house. The horizontal design of a direct vent system avoids the problem of construction obstacles blocking the installation of a vertical exhaust vent and a chimney is not available.
The air-tight combustion chamber stops backdrafting of exhaust gases into the house. A direct venting system improves fuel efficiency since it does not take conditioned air from inside the house.
Because a direct vent system relies on natural air circulation, the water heater must be located no more than four feet from the outside wall.