High-efficiency condensing water heater

A water heater, in particular a condensing water heater, comprises a water storage tank 110 and a heat exchanger 130 to transfer heat to water in the storage tank. The heat exchanger includes a first pass flue 132 extending through the water storage tank and a plurality of second pass flues 140 coupled to the first pass flue and exiting the water storage tank through at least one aperture defined in a curved side wall 116. Each of the second pass flues has an end portion 148b oriented at an angle relative to the other end portions 148a and extending substantially normal to the curved side wall. Each second pass flue is contained within a first half of the water storage tank extending in a direction along a length of the first pass flue. An exhaust manifold 170 is associated with the curved wall of the water storage tank and includes a gasket (172, Fig.6A) defining inlets (173, Fig.6A) receiving each of the ends 148b of the second pass flues, and a cover 200 enclosing the ends of the second pass flues and defining an outlet (202, Fig 15A) for delivery of combustion gases and condensation from the exhaust manifold.