While it’s true that there are such things as immersion water heaters, they are electric and don’t do much of anything more than to just keep the surface of the water from freezing, they certainly don’t make HOT water. The elements that are in an electric water heater are the thermal devices you’re looking for to heat water, and they do a fairly economical job in the heater, which is enclosed and insulated to keep most of the heat in the water, not let it escape into the atmosphere. Also, people got along without heating their water in large tanks to have ready at a moments notice, for many, many years, by heating water as they needed it on a gas stove. I don’t think the question is dumb, I think you’re expending your energy in the wrong direction.

the do sell immersion heaters for keeping water from freezing in livestock water barrels , they come in varying wattage .Also you can try lowering the wattage of the elements in water heater . most common are 4500 watts for top and bottom elements, you can try putting something like 1500 watt or 200 watt elements in .many other alternative ways of heating water .