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With a central water heater of any type, any cold water standing in the pipes between the heater and the point-of-use is dumped down the drain as hot water travels from the heater.
This water wastage can be avoided if a recirculator pump is installed, but at the cost of the energy to run the pump, plus the energy to reheat the water recirculated through the pipes.
Some recirculating systems reduce standby loss by operating only when hot water is expected to be needed, at the expense of greater system complexity.

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