Abstract: An apparatus for producing hot water. A heat exchanger has a primary circuit which receives water from a hot water source and delivers the spent water back to the source. A secondary circuit through the heat exchanger receives unheated water and delivers it as hot tap water. A pump is connected in the line between the hot water source and the primary circuit of the heat exchanger, and a shunt bypass is connected in parallel with the series comprising the pump and the primary circuit of the heat exchanger. A sensing means such as a temperature sensing means senses the commencement of water flow through the secondary circuit and in response thereto operates the pump. Another temperature sensing means measures the temperature downstream from the primary circuit and in response thereto controls the distribution of fluid downstream from the primary circuit of the heat exchanger as between the shunt and the return line to the hot water source.