Abstract: Apparatus for pre-heating water prior to the water entering a conventional water heater including a heat exchanger means located in the attic of a residential dwelling for effecting a heat exchange between a hot air in the attic and water flowing through the heat exchanger, the heat exchanger having an inlet for receiving tap water and outlet for discharging heated tap water, and a water heater connected to the outlet of the heat exchanger for receiving heated water from the heat exchanger and for heating the pre-heated water to higher temperature. Preferably, the heat exchanger is a length of pipe located entirely within the attic of a residential dwelling having a sufficient length and volume to effect exchange between hot air trapped in a residential attic and tap water flowing through the pipe.