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Electric hot water heaters consist of either a tank or a heat exchanger, where an element heats the water via a thermostat to reach the desired temperature. An electrical cable or wire is run from a power point or meter box and will supply power as the source of energy to heat the tank.
Gas hot water heaters come in both storage systems where the hot water is stored in the tank and also gas continuous flow systems, where there is no storage tank and the gas only heats the water as it is needed. The advantage of using gas, instead of electricity is that it will have less greenhouse gas emissions and normally your water heating costs will be lower than electricity.
A heat pump hot water heater absorbs heat from the air and transfers it to heat the water; it is run on electricity and when using the right conditions are more energy efficient, which is saving money and also reducing greenhouse gas emissions. They are 3 times more efficient than your normal mains pressure hot water heater. They work similar to a refrigerator; however they pump heat into the water, whereas a refrigerator pumps heat out of the fridge to keep it cool.