Abstract: Increased efficiency for heating water with a conventional electric water heater tank is obtained with a unit which may be placed next to the side of the hot water tank and readily connected thereto. More specifically, the preferred unit fits along the vertical wall of the conventional water tank and, to this end, includes a narrow upright housing with an inner arcuate wall positioned closely adjacent the cylindrical wall of a water heater tank. The preferred unit has therein a refrigeration apparatus comprising a condenser at the upper end of the unit and closely adjacent the upper end of the tank, a compressor directly therebelow, and an evaporator which withdraws heat from air circulating therearound in a lower chamber.