Traditional water heaters are by far the more common types of water heaters. Tank-type units can generate heat with electricity or fuel, like natural gas or heating oil. Water travels into the unit’s tank via a water supply pipe. It sits in the tank until the heating element raises it to a specified temperature. Most of the time, you don’t use your water immediately, so the hot water just sits in the tank.
Insulation helps keep the heat from seeping away while the water is waiting for use. If the water temperature drops, the thermostat signals the unit to begin heating it again, until it reaches the desired temperature. When you open up the hot water on a faucet inside of your house, it draws from the tank via the hot-water delivery pipe. As you continue to draw hot water from the tank, it’s replaced by cooler water coming in through the water supply pipe. If you use hot water faster than your unit can heat it, the average water temperature drops.