Abstract: Waste heat from a steam cycle employing a steam boiler is used to heat water, on an on-demand basis, in a steam-to-water heat exchanger wherein the supply of steam into the heat exchanger is regulated so as to maintain the temperature of the heated water exiting the heat exchanger at a relatively constant pre-set temperature. Further waste heat may be recaptured from the steam boiler steam cycle by pre-heating the incoming cold water being fed into the steam-to-water heat exchanger in the on-demand water heater using the still-hot condensate from the condensation of the steam in the steam-to-water heat exchanger. A condensate-to-water heat exchanger may be employed to pre-heat the cold water infeed to the steam-to-water heat exchanger.