Abstract: This invention relates to a water heater comprising a water tank (1) having a wall (2) formed from material having heat transfer properties and a cold water inlet (5) adjacent one end of the tank. A tube (8), adapted to carry a refrigerant fluid, is secured externally about the tank wall (2). Heat-conductive material is provided along the length of the tube, with the tube and the heat-conductive material in heat-conductive contact with the external surface of the wall of the tank to transfer heat from condensation of the refrigerant fluid in the tube through the wall to the water contained in the tank (1). An evaporator (15) is positioned so as to be exposed to ambient conditions for absorbing heat energy from the ambient conditions. The evaporator is provided with a passage for carrying the refrigerant fluid whereby the fluid may be heated by the ambient conditions.