To operate properly, the hot water system has to be laid out as a continuous loop from the water heater to various usage areas and finally to the furthest area. From there, a pipe is run back to the water heater and connected to either the bottom of the tank or the cold water inlet pipe. The piping should be insulated to keep the heat from escaping as much as possible because the pipe will always be hot with this type of system. The downside is that the ater heater will be operating much more than normal, so it will fail sooner, and the utility bills will be about 3 times normal, unless you can install a timer on the pump to allow it to only operate during the times you actually want instant hot water.: I was wanting some information on recirculating hot water : system for new residental constuction. Cost, how it works : ect………: Thanks!