Most everyone is familiar with the standard water heater that is a tank of water that is heated by either electric or gas. These have served us well and have been around for a while, but there is more and more new varieties out there now that can save from wasting energy.
On Demand water heating is referring to water heaters that only heat up the water that you when you need it and the amount that you need. The idea behind these systems is that you are not heating up a big tank of water and then like at night it just looses heat when it is not being used. People also like these because you have a endless supply of water, thus there is no running out of hot water like the old tank versions. Depending on your water usage needs and desires this option can be a very good one for you. More info on them here.
The latest technology is the heat pump water heaters. These units pull the heat off of the air around the unit, thus converting that heat to heat the water. In contrast to its counterparts it does not use a heating element to heat the water, but runs a pump and fan to work. These can use up to 2-3 times less energy operate. Some boast of saving over $300 a year. How they work.
Hooking up a solar system can also take your system to a whole new level. Capturing the natural heat from the sun to heat the water is the most efficient way. See our example above of just how the solar works.