We are renovating our home and our builder suggested a second electric water heater as a supplement to our gas water heater. He then installed them such that the cold water enters the electric heater first and then the electric-heater water goes to the gas water heater for storage. This strikes me as backwards. It seems to me that the cold water should be heated by the gas water heater and then "stored" in the electric heater, which would only come on to maintain the hot temperature, rather than heating the water itself.

Thoughts on this?

It really should make no difference. However, why electric heater ? I would suggest to install 2 gas w/h's in tandem. First heater preheats water to 115 F and second brings it up to 125 F. I don't know what part of the country you live in, but gas is usually lot less expensive than electric.

Thanks. We are in Washington DC. Gas is much cheaper. (Too bad we cannot use hot air. That is in abundance here. But that is another thread.) I think the intent was to use the electric heater as a holding tank and just to use the electric to maintain the water at the temperature created by the gas heater. This would use minimal electric.

I think a real way to minimize the use of electric is if the incoming water was pre-heated by a tankless water heater.
Low draws would come from the tank and if you exceeded the tank or had high draws, the tankless would kick in.

Adding a recirculating loop (gravity if possible) would help even more.

Circ-Pump is not really big energy saver since it keeps running water around - and returning luke warm water back to the source for reheating - even when hot water is not needed.

But, using tankless heater ( w/o circ-pump) is a great idea that more and more people are now utilizing. From my own experience: by installing 2 strategically placed tankless heaters in my own house, my gas bill dropped down by 40%.

Milo:

A recirc-pump doesn't have to run all the time and as we know, you don't need a return line, but it's better with one.
Occupancy sensors and/or buttons can be used to start the recirc process like in the Metlund system.

The occupancy sensor in the bathrooms makes a whole lot of sense. A push button in the kitchen also makes sense.

I have tandem tank water heaters with a recirculating pump. My thought is to convert to a tankless heater that feeds a tank heater. The tank heater would operate on a closed circulating pump. The water returning through the system would go back into the tank heater and not the tankless to eliminate constantly activating the tankless system.