In my newly purchased home, I have an exterior natural gas Rinnai water heater that feeds into an interior electric tank water heater, which then feeds hot water throughout the house. In addition, there is a recirculating pump on the tank water heater, with a valve under the kitchen sink so the hot water is instantly available there.

My question is what is likely the purpose of this configuration, besides having an endless supply of hot water? Is it likely also for efficiency, since the water enters the tank already hot, and heating with natural gas is lower cost than electric? Related to that question, how should the temperatures on the 2 water heaters be set relative to each other, i.e. should they be set the same, or should one be lower or higher than the other (I'm thinking both the same at whatever temperature we want the hot water)?

  • Welcome to Home Improvement, please take the tour. You've asked three questions here, but our system works best if you only ask one at a time. Please edit this down to just one question, then feel free to ask two whole new questions for the other two. Nobody here will look down on you for doing so.
    – FreeMan
    Commented Jan 19 at 15:14
  • Thanks for the guidance. I've updated it to be just the 2 inter-related questions.
    – Anthony W
    Commented Jan 19 at 16:02

2 Answers 2


I found this post from a few years ago that has many different opinions and pros-cons of using a tank AND tankless water heater, which was very helpful. It seems there's no "right" answer to this, just various options and preferences, although it seems the "tankless feeding the tank" is a fairly common configuration. https://www.reddit.com/r/HomeImprovement/comments/a1gxje/tankless_water_heater_inline_with_water_heater/


The only way this does not appear to be a complete mistake (by whomever installed it before you bought the house) is if the electric heater is a hybrid heat pump type and you heat the home with gas.

"Endless supply of hot water" - that's the promise of a (properly sized) tankless water heater. No need for a tank to get that. For most homes, no need for it at all, an 80 gallon tank is plenty or more than plenty.

(Cost) "Efficiency" - if gas costs less than electric, a gas tanked heater would make more sense than an electric tanked heater.

Given a recirculation system, you're never going to have the "no standby losses" feature of a tankless, and most tankless heaters won't work on a recirculation flow, so a gas tanked (and no tankless) would be the obvious direct solution.

A hybrid heat pump electric (with gas heat of the house) might manage to cool the house a little during cooling season, unlike a gas tanked, and not cost too much to run in heating season as it's essentially transferring heat from the heating system to the water. The recirculation loop ensures that it's always needing to make up the heat lost in that system. If it's a basic electric resistance heater, rather than a heat pump, there goes (Cost) "Efficiency" out the window.

  • This configuration has standby loss from the electric tank, but it should work well with a recirculation pump. The outside gas tankless feeds the electric tank so this reduces the electric power consumption from heavy use. The gas fired WH is outside reducing damage potential from catastrophic failure. And suppose someone wants only a small amount of hot water to wash hands or shave, one could turn on the tap to low flow and save a cycle on the gas tankless WH. I think the OP's system is not unreasonable, although I personally would op for a simpler one, but not a ". . . complete mistake. . ." Commented Jan 19 at 17:54
  • It has much more standby loss from the recirculation loop than the tanked heater. A recirculation loop is a guaranteed hit on the standby loss charts... If the gas tankless can live outside, so could the gas tanked heater, so I'll stand by it looking like a mistake.
    – Ecnerwal
    Commented Jan 19 at 18:13
  • You know much more than I about all these sytems, but from my lofty perch of age (79 yo) I must disagree. I don't want our OP to think he has a nonsensical arrangement. There are tankless WHs designed for mounting outside. AFIK there are no tank WHs designed for the outside. I can imagine a little bump out for holding a HW tank which could be designed to keep the house dry in case of a catastrophic failure. We have had two of gas fired tank failures in our 45 y in our house--a real mess. Good arrangement for gas fired WH IMOP is a tankless WH inset into an exterior wall in a "can". Commented Jan 21 at 12:04

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