There are campfire heaters that are designed to capture the heat in the embers of a campfire and automatically channel it from a cold container to a hot water storage container. These are more efficient than a pot over a fire, and they do work well, but they still have the inherent drawback of relying on a campfire for heat, as well as being limited to the water volume in the supply jug. True, you can hook up a larger hot water jug and switch out supply jugs as they empty, or even hook the supply side up to your well water or utility water, But ultimately you are limited by the either the heating capacity of the fire, the storage capacity after the water is heated, or by the amount of water available to be heated. As you have probably figured out, to have usable hot water, you need four items:
A supply of water to be heated.
A source of heat
A means to transfer heat from the source to the water
A means to store the heated water

We touch upon the supply of water to be heated in the first section of this post. The source of heat can be a fire, the sun, a stove, a heating element, or a gas flame. We have touched on a camp fire as a heat source above. The transfer of heat typically occurs by means of a container being heated and transferring heat to the water. The storage of heated water is typically a tank, preferably insulated, and sized based on the inverse of how quickly the water can be heated. The Fire Coil water heater shown above makes it easy to see the basics of heating water. The water is fed at a slow rate to the source of heat in a container that allows the heat to be transferred, in this case the copper coil. You may think that if you increase the size of the copper tubing that you would increase the rate of hot water generation, but that is actually incorrect. The small size of pipe actually ensures that the water moves slowly enough that it has time to heat up while in the "heating zone". If you increased the size of pipe, more water would move through and at a faster rate of speed, which would actually mean each molecule of water would spend less time in the heating zone and therefore would end up not being as hot in the end. As you can see, there is a bit more to the science of creating a well performing water heating system. So let's delve into some of the other options that have been engineered to work well, starting with the standard style electric hot water tank.

A standard tank style hot water heater consists of an insulated tank and one or more heating elements that are immersed in the water. For an electric heater, these are resistance elements, ie. elements that heat up when electricity is run through them due to the resistance of the material to the flow of electricity. Depending upon the size of the tank, there may be 1, 2, or even 3 elements within the tank. For gas heaters, there is a burner at the bottom which heats up the bottom of the water reservoir, then the hot exhaust gases flow up through the center of the tank, further transmitting heat as they pass through the tank, before heading up a chimney to the outside. Obviously, the size is dependent upon the amount of hot water that is needed, and the means used to estimate that amount is dependent upon the type of hot water system you wish to install.

Look for the water heater's First Hour Rating. The first hour rating is the number of gallons of hot water the heater can supply per hour (starting with a tank full of hot water). The Energy Guide Label lists the first hour rating in the top left corner as "Capacity (first hour rating)."
For the example shown to the left, it is 57 Gallons. You then need to estimate the peak hour demand that your tiny house will have. Peak Hour Demand is defined as the maximum demand in any one hour. Ie, determine what time of day (morning, noon, evening) you use the most hot water in your home. Keep in mind the number of people living in your home. Then using the chart shown below, add up the actual number of gallons that are used within that hour to estimate your maximum usage of hot water during this one hour of the day.

Shower: 10 gallons avg.
Shaving (0.5 gallons per minute): 2 gallons avg.
Hand Dishwashing or Food Preparation (2 gallons per minute): 4 gallons avg.
Automatic Dishwasher: 6 gallons avg.
Clothes Washer: 7 gallons avg.

Reliance 6 20 SOMS K 20 Gallon Compact Electric Water Heater
So as an example, if your maximum use within 1 hour is 2 showers plus hand washing of dishes, the calculation would look like this: 2 x 10 gallons(showers) + 1 x 4 gallons (dishwashing) = 24 gallons. Once you know this First Hour Demand, you will want to match your hot water heater's rating to the demand. Too little, and you will run out of water before you
are finished, too much and you are wasting energy keeping water hot. For future reference, the 6 gallon water heaters commonly referred to as point-of-use heaters, have a typical First Hour Rating of 8 gallons. For the hypothetical example above, you will most likely need a 20 gallon tank style heater. These take up to 24 x 24 x 26 inches worth of space, and weigh up to
230 pounds (the water alone is 162 pounds of that) when full.

How a Tankless Heater works

For tiny houses, many people look to use a tankless style water heater. These work by flash heating the water as it passes through the unit. They choose them because they take up less space than a tank style, and weigh less since you are not storing a tank full of water. They are available in either electric or gas fired types. Both electric and gas work, but the gas fired types tend to be more efficient to operate. However, the gas versions require both intake air and a chimney/exhaust. Tankless water heaters are rated by the maximum temperature rise possible at a given flow rate. Therefore, to size a demand water heater, you need to determine the flow rate and the temperature rise you'll need for its application. First, list the number of hot water devices you expect to use at any one time. Then, add up their flow rates (gallons per minute). This is the desired flow rate you'll want for the demand water heater. For example, let's say you expect to simultaneously run a hot water faucet with a flow rate of 0.75 gallons
(2.84 liters) per minute and a shower head with a flow rate of 2.5 gallons (9.46 liters) per minute. The flow rate through the demand water heater would need to be at least 3.25 gallons (12.3 liters) per minute. To determine temperature rise, subtract the incoming water temperature from the desired output temperature.
Unless you know otherwise, assume that the incoming water temperature is 50ºF (10ºC). For most uses, you'll want your water heated to 120ºF (49ºC).
In this example, you'd need a demand water heater that produces a temperature rise of 70ºF (39ºC) for most uses. For dishwashers without internal heaters and other such applications, you might want your water heated at 140ºF (60ºC). In that case, you'll need a temperature rise of 90ºF (50ºC).

Ecotemp L10 High Capacity Outdoor Tankless LP Water Heater

So for our example house, we will assume that we will wash dishes by hand, and have at most a shower and the sink faucet running at the same time. Our hypothetical sink faucet has a flowrate of 2.2 Gallons Per minute (GPM) and our hypothetical shower head has a rate of 2.5GPM. This adds up to a maximum of 4.7 GPM. We are not needing to heat water for a dishwasher, so we can get by with a 70ºF (39ºC) temperature rise. Or we can decree that the house rule is that if someone is taking a shower, no washing dishes! This will drop our required flow rate to just the 2.5 GPM. Which means a tankless heater similar to the one to the right should suffice. Note that the one shown is designed to be mounted outside of the house.
This allows you to avoid having to run a chimney through your envelope, and avoid having to worry about whether it is getting enough airflow. It also frees up space inside, since it is mounted outside. Of concern to tiny house users is that many tankless manufacturers state that their units are for use in a standard house, and that using them in a mobile application like an RV (or tiny house) will void the warranty, so read the warranty restrictions prior to purchasing. This is due to the internal elements not being designed to withstand a lot of vibration or bouncing, which could cause some of the units to get knocked out of adjustment when travelling.

Atwood XT 6 Gallon RV Water Heater

As always, the RV world has options available that may work for your tiny home. Specifically, a number of the RV water heater manufacturers have come up with a hybrid tank/tankless solution, that uses the operational concept of a providing a flow rate with having a small storage tank which effectively increases the available flow rate for a certain BTU output. These heaters are also compact, designed to fit into the spaces that traditional RV water heaters take up. A good version to consider is the Atwood XT line of water heaters. Like all RV water heaters, it is designed to be mounted into an exterior wall, as it exhausts to the outside through the cover (not shown).

This is an excerpt from the book Tiny House Systems