Water heating control and storage system

A method for controlling a water heating storage system, comprising the following steps:

• providing an insulated tank for containing water to be heated;
• providing an upper heating element with an upper thermostat and a lower heating element with a lower thermostat to heat upper and lower portions of water inside said tank;
• providing a controller configured to (i) operate the system in multiple operating modes comprising a first operating mode where both of said upper heating element and said lower heating element are enabled, a second operating mode where both of said upper heating element and said lower heating element are disabled, and a third operating mode where one of said upper heating element and said lower heating element is enabled and the other of said upper heating element and said lower heating element is disabled to independently heat the upper and lower portions of said tank, and (ii) receive and process a demand response signal and in response to said signal selectively operate said system in one of said operating modes or allow said upper thermostat and said lower thermostat to assume control of whether said upper heating element and said lower heating element are respectively enabled or disabled;
• receiving and processing a demand response signal via the controller;
• and
• based on a state of the response signal, selectively operating the system in one of the three operating modes or allowing the upper thermostat and the lower thermostat to assume control of whether the upper heating element and the lower heating element are respectively enabled or disabled.