Originally Posted by MartyG
Yes, but if I'm looking at his picture correctly (hard to interpret, being sideways), it looks as if his bypass valve is right on the corner. I've never seen that! So "up" parallels one pipe, "down" parallels the other.
The valve in the corner would be a two way valve instead of the normal shut off valve we have all seen. The two way valve would control cold water to the hot water tank or to bypass. I guess this way they only need to install two valves, instead of the three we normally see. (probably cheaper).
And if I am correct I would guess the handle points in the direction of flow so as the picture has it the water would flow to the bypass.
At least that would be my guess.