Assumptions: Two elements, an upper and a lower. Temp setting the same on
both. Same thermostats providing the same upper and lower limit swing.

Diagram: http://home.howstuffworks.com/water-heater1.htm



State: No water being drawn. Tank just sitting.

Colder (denser) water will be at the bottom of the tank. Heat rises. When
the temp at the bottom of the tank goes below the lower thermostat limit,
the lower element goes on until the water at the bottom is up to temp.
Element goes off. Top element never comes on.

State: Hot water being drawn lightly/intermittently.

Hot water being drawn from the top of the tank. Cold water being fed into
bottom of tank from inlet/dip tube. When the temp at the bottom of the
tank goes below the lower thermostat limit, the lower element goes on.
Providing the demand is not high, the upper element will not go on
because the low limit of the upper thermostat is not reached. Bottom
water reaches temp and thermostat shuts off. Top element never comes on.

State: Hot water being drawn heavily like shower or hot water wash.

Hot water being drawn from top of tank. Cold water inlet being fed to
bottom of tank via dip tube. Bottom element goes on. Demand is faster
than lower element can heat. Lower limit of upper thermostat is reached.
Upper element goes on. Lower element turns off. Upper element stays on
until the water in upper tank is up to temp. Upper element goes off.
Lower element goes back on until water at bottom of tank is up to temp.


I'm no plumber, heating guy or any of that. This is just my
understanding.