Storage heaters are the most common water heater type in North America.  Storage heaters work by heating water through electric heating elements or gas or oil burners and storing the heated water in its own tank.  Thermostats control when the heating mechanism operates -- when stored water is below a set temperature, the storage heater activates; when a set upper limit for temperature is reached, the heater deactivates.  While water is stored and not used, heat is very gradually lost.  Most modern storage water heaters have very good insulation to minimize these standby heat losses.  Timers and automated controls can be used to lower stored temperatures during durations of unuse to further reduce heat losses.

Storage heater can typically provide instant hot water volume from 2 gallons to 400 gallons.

Storage heaters are preferred in luxury hotels and residences as their flow quality is much better than instantaneous or tankless water heaters.