Hi. You can basically place the water heater at any point in the PB while it has its regulatory circulation and air intakes. Do not place it at the exit of the tank, next to it as it will not work well and are not suitable for the weather. If it were a thermo tank (it does not need a pressure difference to turn on) you can place it next to the tank without problems protecting it. What you should keep in mind is the minimum distance between the base of the tank and the flower of the shower. This must be greater than 3 mt. Regards