Electric water heaters operate by converting electrical energy into heat. They typically consist of a tank, heating elements, and a thermostat. When cold water enters the tank, the heating elements – usually located at the bottom or middle of the tank – activate to raise the water temperature. The thermostat monitors the water temperature, ensuring that it remains at the desired level. Once the water reaches the set temperature, the thermostat deactivates the heating elements to prevent overheating.