Water heaters are available in five different variants: Storage/Tank, Tankless,  Heat Pump, Solar, and Indirect Tankless systems. Tank-based water heaters heat up the water in the tank and funnel it through the appropriate systems. Tankless systems use coils to transfer heat and are better for providing on-demand heat. Heat pumps utilize heat in the environment to heat up the water and electricity is only used to move the water, making the system very energy efficient. Solar water heaters utilize energy from the sun but will require solar panels or a method of capturing sunlight to power. Lastly, Tankless indirect systems utilize electricity, oil, or gas to heat the water on demand.