Gas-condensing water heaters are similar to conventional gas storage water heaters with a few exceptions. The major enhancement these units have, over the conventional units, is the ability to capture the heat of condensation of the combustion gases. The burner heats the water like typical gas storage models, but the combustion gases are vented through coils that provide additional heat to the water. Note that, as of this date, residential gas-condensing water heaters are not available. However, manufacturers are considering developing this product line if a market is available.
Source: UF/IFAS Energy Efficient Homes: Water Heaters; Wendell A. Porter, Hyun-Jeong Lee, and Kathleen C. Ruppert, 2008.
Additional Resources
EnergyStar® UF IFAS Energy Efficient Homes: Water HeatersFlorida Department of Community Affairs, Building a Safer Florida, Inc. and the University of Florida. Water Heaters
National Association of Home Builders Research Center. Heat Pump Water Heaters: