Residential hot water circulating systems provide the user with fast hot water providing a convenience for the user, and saving the water that would have been run down the drain.

Traditional hot water circulating systems form a loop with the hot water piping that connects from the water heater outlet to the fixtures, and then back to the water heater. A pump circulates the hot water through the loop. These systems provide nearly instant hot water at each fixture, but they are very expensive to operate. They waste huge amounts of energy keeping hot water in the pipe, and decrease the life of the water heater. They are inappropriate for tankless water heaters. Traditional circulating systems are made by Grundfos, Taco, Bell & Gusset, and others.

Laing makes a system suitable for retro-fitting to existing homes that don't have a dedicated return line, called the Auto Circ. It is a small pump that mounts under the sink, and pumps water from the hot water pipe into the cold water pipe, and when hot water reaches 95 degrees, the pump shuts off. When the temperature drops to 85 degrees the pump turns back on and the cycle repeats. The pump can handle several fixtures if the plumbing layout is correct. This system uses a lot of energy since it keeps the plumbing full of above ambient temperature water, and the cold water line ends up with tepid water not cold. The Laing autocirc is not suitable for use with a tankless water heater.

Grundfos makes a similar hot water circulating system for retrofitting into homes that don't have a dedicated hot water return line. A pump connects to the outlet of the water heater, and a thermally controlled valve is placed at each fixture in the home. The valves are connected between the hot and cold water lines. When each valve is cold water can flow from the hot line to the cold, and does so because the pump at the water heater outlet is providing pressure. When hot water reaches the valve, the valve closes. This keeps hot water near all the fixtures in the home with just one pump. However, like the Laing Autocirc, it doesn't really deliver hot water, just luke warm, and it replaces the cold water with tepid. The system is not suitable for use with a tankless water heater.

Metlund and Chilipepper make "demand" hot water systems. Demand hot water systems are residential hot water circulating systems designed to work without a dedicated return, and are suitable for retrofit to existing homes. They also use the cold water piping for a return line. The demand pumps, like the Laing pump, are placed under a fixture where they connect the hot and cold water lines. When the pump is activated by the user pushing a button, it pumps water out of the hot water pipe and into the cold water pipe, and shuts off when the hot water reaches the pump. Demand system pumps are more powerful than the other types of systems to move the water quickly.

The demand system has several advantages over the traditional system, and saves the same amount of water. One large advantage is the reduction in energy usage. Since the demand system only runs for a few seconds whenever someone demands hot water, it uses very little energy for pumping...typically less than $2.00 a year. It stops running when hot water reaches the fixture, and so it doesn't use any more hot water than what you would normally use without a circulating system. Another advantage is the much smaller installation cost. It's easy and economical to retrofit to any house.

Demand systems have more powerful pumps than the other systems and so the Chilipepper pump and at least one of the larger Metlund pumps will work with tankless water heaters. Most of the circulating pumps won't pump enough water to activate the tankless heaters.