An electric hot water heater uses a cylinder to store and heat your water until it is ready for use. The storage tank is filled with cold water, which is then heated inside by a heating element to a certain temperature. When you use the hot water it is siphoned from the top of the tank and the tank refills with cold water to start the process again. Electric hot water heaters are usually the cheapest to purchase but this is overridden as they are usually the most expensive hot water systems to operate and produce the most greenhouse gas emissions compared to the other hot water fuel sources – gas, solar powered and heat pump hot water units. You can try to reduce costs of your electric hot water heater by connecting it to the correct tariff electricity supply to suit your needs. An electric hot water system can be connected to a day rate tariff or an off-peak tariff rate. If you are connected to the day-rate tariff your water can be heated at any time 24/7, this option is great for you to have a constant supply of hot water, but is the most expensive to run. The off-peak tariff allows the water to only be heated during off-peak times – usually during the night. So if you use the heated water stored in the tank it will not be re-heated again until the off-peak time. This is a cheaper option in terms of operating costs but in using this option you would be better off having a larger storage tank depending on your hot water heating demands. Some manufacturers provide a twin-element electric hot water heater which allows the use of both the day and off-peak tariffs.