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There are several different kinds of water heaters. While they each have advantages and disadvantages, they all have the same basic goal in mind. To heat water so that you can take a hot shower or bath, and to have hot water to wash dishes with.
There are electric water heaters, propane water heaters, tankless water heaters, on demand water heaters and more. Water heaters also come in varying sizes. The size of your water heater depends on how big your home is, and how many people live in it. Makes sense, right?