How Does an Electric Water Heater Work?

Electric water heaterElectric water heater

Find out how electric water heaters work and what each component is designed for. Whether you live in a small or large house, apartment, or cottage, electric water heating ensures reliable hot water delivery anytime and almost anywhere.

It is important to know how an electric water heater works and see if it is worth buying it, how easy or difficult it is to maintain, service, or repair. Troubleshooting can be tricky, but if you understand how each component works, have the necessary tools and knowledge, you can fix it yourself.

Typical electric water heaters are designed to heat water stored inside the cylindrical storage tank, usually made of metal. These are known as tank-type water heaters. The capacity of storage tanks varies - it is in the range from 2 gallons to over 100 gallons.

Small models are typically installed near the point of use, supplying hot water to one fixture, while larger models can deliver hot water to multiple fixtures or applications. These include a single tap, showers, baths, dishwashers, and washing machines.

Main components of electric water heaters

  • Storage tank with a glass lining
  • Insulation
  • Heating elements
  • Thermostats
  • Dip tube
  • Anode rod
  • Drain valve
  • Cold water inlet
  • Hot water outlet
  • Electric junction box

How does an electric tank-type water heater work?

In short: Electric water heaters work by bringing the cold water inside the tank, heating with the immersion heating elements, and then moving hot water from the top of the unit throughout the home using home plumbing.

Electrical connections

Electric water heaters run on electricity and must be completely wired.

Some smaller electric models come with the electrical cord that plugs into an outlet plug, while larger ones must be hardwired. Models with greater volumes (e.g., 30 gallons and up) have a junction box located on top of the unit where you/technician would establish electrical connections.

You need to remove a junction box cover to access wires and connect to the circuit. These models usually require a 240-volt dedicated circuit, which serves only that water heater and no other devices.

emergency plumber

Cold water delivery

Cold water from the home plumbing gets into the tank through the water inlet (it has a blue-colored ring) and a dip tube

A dip tube is a plastic pipe connected with one end to the water inlet, while the other side ends a few inches from the bottom of the tank where cold water is delivered. Some models have dip tubes with ports to create turbulent water flow to reduce the sediment buildup inside the tank.

With the hot water tap open, cold water enters the storage tank. Thermostats can sense that water temperature is below the set value and power one or both heating elements. 

Water heating and temperature control


A thermostat is a device designed to sense the presence of heat and, based on that, controls the flow of electrical current to a heating element. A thermostat monitors the water temperature, and once it reaches the set temperature, it shuts off the heating element. It is mounted flush against the side of the tank.

Some models contain one heating element and one thermostat, while others two heating elements and two thermostats. A typical electric water heater operates in a range from 120 to 240 volts, where devices with 240 V use two heating elements. Heating elements range in power inputs from about 1440 to 5500 watts. These are usually known as upper and lower elements/thermostats, where each thermostat controls one heating element.

Heating elementHeating element

Heating elements are submerged in the water of the heater’s tank. The electricity is passing through, converting energy into heat and transferring that heat to water. These electric resistance elements are close to 100% efficient.

In residential applications, upper and lower electric heating elements are never ON at the same time (non-simultaneous operation).

With the call for heating, the upper thermostat turns on the upper heating element until approximately two-thirds of a tank’s volume reaches the set temperature. Once the temperature on the upper thermostat is satisfied, it turns off and sends electricity to a lower thermostat which powers a lower heating element. Once a lower one reaches the set temperature, it turns OFF. The lower element is the one that maintains the set temperature in the standby mode.

Also, if the upper heating element fails, the lower won’t turn ON, even if it is in good condition. However, if the lower element fails, the upper one will continue to operate but won’t provide enough hot water.

Hot water from the upper part of the tank runs through the outlet pipe (it has a red-colored ring) and further through the home plumbing to its destination.

Now, as the volume of hot water inside the tank decreases and while the cold water keeps coming, the temperature of hot water lowers, the heating elements kick in, and the cycle repeats.

Note: Heating elements must be submerged in water; otherwise, they will break.

Safety elements are protecting users and a water heater

For safety purposes, the upper thermostat is equipped with the reset button, also known as the ECO (emergency cut-off) switch or high limit switch. This is a safety element that protects a water heater from high temperatures and further damages.

Anode rods are designed to defend the steel tank from rusting.

A temperature and pressure relief valve (TPR) is protecting a water heater from high temperatures (over 210 degrees) and pressure (over 150 psi) by releasing hot water to the outside. A TPR opens if the thermostat fails, so as the ECO, protecting the unit from damages, even explosion.

A drain valve is located at the bottom of the water heater and is used to drain and flush deposits collected inside a water heater tank.

All water heaters have insulation that wraps the metal tank to keep the heat longer inside the unit. With the thicker insulation, there is less energy waste.

How does an electric tankless water heater work?

Electric tankless water heaterElectric tankless water heater

Electric tankless water heaters work by using coils to heat cold water passing through the unit. Instead of storing hot water, tankless water heaters only heat the water that is needed. Electric tankless is designed to deliver hot water on demand and continuously, reducing heating costs by up to 60%.

When you turn on a hot water tap, a flow sensor activates, turning ON the heating unit. The heat exchanger warms up, heating the water to a pre-set temperature. Hot water then gets delivered to an open tap or any other device calling for hot water.

You might also want to check how gas water heaters work, as the design and construction are similar to the electric type.

Electric water heaters are found in many homes in North America, so knowing how these water heaters work helps you properly maintain, install, or even fix them.

If you would like to know more about other types of water heaters, use the following articles and learn about gas water heaters, tankless, or heat pumps.

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