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Gas water heaters take a major part in the Chinese water heater market, while the existing water heater have either low efficiency because of the single utilization of energy or the high failure rate that is caused by low temperature corrosion. A new structure of heat exchanger in the gas water heater is proposed is this article, the heat transfer method of which is not only forced convection, but also phase change heat transfer, which provides a higher heat transfer coefficient in condition of the same heat exchange area, and consequently promote the efficiency of the heat exchanger. An experimental study is carried out to compare the difference between the new water heater and the existing one on efficiency, and result shows that the new water heater is 6% higher in efficiency. Besides, this kind of water heater has a gentle temperature change when a sudden decrease or increase of gas flow rate occurs. An economic analysis is produced in order to predict the economic efficiency of the new heat exchanger. As a result, the new heat exchanger of the water heater can significantly promote the heat transfer efficiency and decrease the failure rate, and it is more economic efficient than the existing one.

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