MVP_A. O. Smith _Side(300)Combining a tankless engine and a small buffer tank, the NEXT hybrid water heater installs much like a conventional model, using PVC venting and standard ½-inch gas connections. It uses exhaust gas from the tankless engine to transfer heat into the water stored in the buffer tank, operating at 90% thermal efficiency. It is eligible for a federal tax credit. 800.527.1953.