Drain water heat recovery is very simply a conductive coil (such as copper) wrapped around a pipe to remove the heat from drain water for use in pre-heating water destined for the hot water heater, or a hot water storage tank, or hot water fixture such as a shower. The DOE estimates that 80–90% of the energy used to heat water in a home goes down the drain, and a drain water heat recovery system can reduce energy needed to heat water.

There are two basic types of systems, either with or without storage tanks. In a system with no storage tank, essentially the cold water input pipe is wrapped around the drain and as that coil extracts heat from the drain pipe it pre-heats the cold water inside which is then fed to an in-line (tankless) heater or a running fixture – this works well for showers as the water you use that is going down the drain immediately has the heat extracted from it to pre-heat water going either to the tankless heater that services that shower or to further heat the hot water coming from a conventional. In a system with a storage tank, the heated drain water flows through a heat exchanger coil at the bottom of a cold-water storage tank and heats that water; the heated water rises to the top of the tank and the “cold” water input for a hot water heater draws this pre-heated water from the top of the storage tank. Pre-heating water helps increase water heating capacity and may enable you to get a smaller unit.

U.S. Department of Energy

The DOE estimates that DWHR systems have paybacks ranging from 2.5 to 7 years, depending on how often the system is used.