These systems apply the simple principle that if the water in the hot water feed line is kept hot, it will reduce the amount of hot water that must travel to get to the fixture. 

The standard plumbing configuration involves one long hot water feed line coming off the hot water heater and branching to fixtures on each floor. This is the least efficient configuration for several reasons: it causes long waits for the hot water to reach fixtures further down the line, resulting in excess wasted water flowing into the sewer system, and energy is wasted by heating water that will remain, and cool, in the feed lines after the user is finished; heating all this wasted water results in higher hot water heating costs. Heating excess water also taxes the heating unit. It is possible to retrofit onto this system a hot water recirculation system.

The basic function of a hot water recirculation system is twofold: to draw cooled (but still warm) water from the hot water feed lines leading to fixtures and to send it back to the hot water heater for re-heating, and to pump hot water to the fixtures faster so that the user does not experience a long wait for hot water and wastes less water. Essentially the system circulates the cooling (but still warm) water in the hot water feed lines back to the hot water heater (not down the drain) to be re-heated, and draws into those feed lines new hot water from the water heater so that the hot water feed lines to the fixtures always contain hot water.  There is no wait on the using end. The result is that hot water does not sit in the feed lines getting cold and consequently resulting in energy waste (the energy that was used to heat it in the first place), and does not result in water waste (as the user would otherwise allow all the cold water that flows out when the hot tap is first turned on, to flow down the drain while waiting for hot water to reach the fixture).

There are passive and active/pump systems. Passive systems operate by placing a pump on the hot water heater outlet pipe, or at each fixture, to increase the outlet water pressure. This increased pressure allows for the installation of a bypass valve at the point of use (sink, shower). The bypass valve allows small amounts of hot water to periodically flow into the cold water system and be replaced by new hot water from the hot water heater thereby maintaining a constant hot temperature level so that the user does not waste water waiting for it to get hot. The systems that place a pump near the hot water heater require an outlet near the hot water heater and can be retrofitted after the walls are closed. One inconvenience is that the user, from time to time, may experience the cold water running a little warm when the tap is first turned on. Statistics show that this system can save over 15,000 gallons of water per year.

Active/pump loop systems use a separate hot water line that sends hot water throughout the house and then loops back to the hot water heater. They can operate automatically through the use of thermostats that monitor the temperature of the water in the hot water feed line and automatically circulate the cooling water back to the heater while circulating new hot water from the heater, or operate on a timer or motion sensor that turns on whenever someone enters the space where hot water may be used. Note, however, that the return loop must be insulated or else the hot water will cool and not result in energy savings.  This system can also work on a timer, or a manual switch. These systems are more expensive to buy and install than passive systems. Be careful how you set up the trigger for turning on the pump because if it runs all the time then the energy costs in running the pump can outweigh the savings in hot water heating. Timers will need to be reset if you experience a power outage. Only one pump is needed for a household. 

Structured Plumbing™  Under the auspices of the “The Department of Energy’s Inventions and Innovation Program”, ACT, Inc. developed the Metlund® Hot Water D’MAND® System  to address both water savings and energy savings in the distribution of hot water. This system is designed to circulate the dormant water in the hot water feed lines back to the hot water heater so that it does not have a chance to cool and get lost down the drain. The company represents that it gets hot water to the fixture four to five times faster than a conventional system. The system can be retrofitted into existing hot water systems without the need to open walls to run new plumbing lines because the pump can be located either at the location of the fixture furthest from the hot water heater or at the hot water heater, and can use the cold water feed lines as the return line rather than using a dedicated return pipe. The pumps are operated by a door-bell like button at one or all the locations where hot water is used; the button is either hard-wired to an electronic controller (feasible only if you are opening your walls and can run the wiring) or wirelessly (up to 100 feet), or via automatic activation devices through door or motion sensors. The system operates on demand, 24 hours a day. The system can work with both storage tank and tankless systems.