Condensing water heaters are one form of a high-efficiency water heater. With traditional tank water heaters that make use of combustible fuels, a vent system must be used which routes the exhaust gases from the combustion process safely outside the building. The exhaust gas contains water vapor and is at a relatively high temperature. Condensing water heaters recover much of that heat energy that escapes up the vent pipe by using a secondary heat exchanger positioned in the path of the exhaust gas. This process reduces the stack temperature of the exhaust gas, causing the water vapor to condense back into a liquid as it releases its thermal energy into the heat exchanger. Condensing water heaters can be of both the traditional tank style or the tankless on-demand variety. While they are more expensive to buy initially, they offer cost savings over their operating life due to their higher efficiency.