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Water Heater Market Share, Trends by 2031 Water heater is an appliance that provides continuous supply of hot water for various purposes such as cooking, cleaning, and bathing. Fossil fuels are the most common method used for heating water. They produce electricity that in turn heats water. Other electrical ways of heating water are nuclear power or renewable energy. Alternative energy sources used for heating water are solar energy, heat pumps, hot water heat recycling, and geothermal heating, often in combination with fossil fuels or electricity. Potentially, water heaters can explode and cause significant damage such as thermal burns or bacterial contamination, injury, or death if some safety devices are not installed.