I thought that would get your attention! ;-)

Due to some apparent confusion between the builder, plumber, and HVAC contractor, we had to shell out for the second hot water tank that we believed was already included in our contract (lesson learned I suppose). So we found this tank at the Home Depot for $250 plus tax:

Here's the explanation of why we chose the least efficient electric hot water heater available.

Our geothermal heat pump has the capability to generate domestic hot water using its "desuperheater." Some of the heat that is removed from the air in the summer, which would ordinarily be expelled into the ground, is instead used to heat water. Even in the winter, when the system is heating the air, a small amount of excess heat is used to heat some water.

But the water is not always being heated, and it's generating hot water on its own heating and cooling schedule. It doesn't care when someone is in the shower (like an "on-demand" tankless heater). Therefore one doesn't just hook this up directly in line with the hot water piping.

Enter the "pre-heat" tank (for us, the above pictured el-cheapo Home Depot special). Cold water comes in from the utility and fills this pre-heat tank. The "desuperheater" is connected to this pre-heat tank, circulating the water through the heat pump. So the water in this first tank is heated by our geothermal heat pump, a little bit in the winter, and a lot in the summer. It saves energy because the warmer the water that enters the second (powered) tank, the less energy that the second tank needs to expend to heat the water.

You have probably already figured out that the pre-heat tank is never hooked up to electricity.  So even though our tank may be an energy hog, in our house it consumes exactly 0 kWh per year.

By the way, the "powered" hot water heater we selected is natural gas fired, Energy Star rated, one of the top performers for its class, and qualified for a Focus on Energy cash rebate.