Condensing gas water heaters pull much of the heat from the exhaust as the heater operates, greatly increasing their efficiency. Where typical gas water heaters have an EF of .62, condensing heaters can have EFs in the .90s.

PVC piping is used for the exhaust vent because the exhaust is so much cooler than normal, and because the condensate produced is acidic. Often PVC is used for air intake, too, in installations where the air is pulled from outside the heater space.

Condensing heaters are both more powerful than typical heaters and also much more expensive. Thus, they are best suited for installations where there is a high demand for hot water, such as where the heater also serves as a space heater.

They do have special requirements. They create acidic condensate, so if that is draining to a metal drain, there has to be a neutralizer on the drain line or the drain will be consumed by corrosion.

They also are power-vent heaters, so there needs to be an electrical outlet nearby.

There is more information on special issues relating to these heaters in an ACEEE Hot Water Forum presentation by Jim Lunt.

(Pictured is an electric Vertex heater, photo courtesy of A.O. Smith.)