The expansion tank is a tank filled with compressed air and shut off near the top by a diaphragm, or bladder. You install it to the cold water input pipes of the water heater. It varies in size depending on the size of the water tank it complements, ranging from 6 gallons to several hundred gallons.
The expansion tank relieves the pressure that builds up through thermal expansion in a closed-system water heater by giving the excess water someplace to go. As the water pressure increases, it pushes the diaphragm of the expansion tank down, compressing the air on the other side, creating more space for the influx of water and relieving the building pressure of the system.
All closed water heating systems require a thermal expansion device. Relief valves are not a sufficient means of preventing pipe damage, so you must complement them with other approved pressure-relief methods.
Prices vary, beginning from around $30 for residential tanks and going up to several hundred dollars for commercial tanks.