Recirculation doesn't itself (normally) heat the water. It provides a continual flow of heated water pumped around through a loop between the water supply pipes connected from the water heater tank to the faucets. The source of hot water is your gas water heater tank, not electric heating within the recirculation system. The purpose of a recirculation system is to avoid standing cold water in the faucet lines that must be run out before hot water arrives, particularly for faucets / usage points that are distant from the water heater.

That is assuming you don't some different sort of recirculation system of which I'm not aware.

This is what I have:

https://product-selection.grundfos.com/us/products/up-ups-series-100-north-america/grundfos-comfort-system-north-america?tab=models

I guess I just assumed that it also heated the water because outside of the recirculation system’s operating schedule, the water isn’t hot, even after running the water for a time. Maybe I just need to allow the water to run longer?...

Is it possible that the hot water in the water heater can’t get to the faucets when the recirculation system is off?

Tim, is there a reason why you did not read the instruction manual?

The installation instructions for the system of question call for it to be installed into the output line at the water heater. A bypass valve is installed between the hot and cold supply taps at the furthest usage point from the water heater (typically under a bathroom sink) which allows the pump to circulate hot water flow from the water heater, around the supply line that (theoretically) passes by all the usage points in the house and back into the cold supply line (thus creating a hot circulation loop).

The pump inline on the water heater output line may cause some amount of flow restriction (whether minimal or appreciable) when it's not running ... which could account for the lack of heated water that you say occurs during periods when the pump is not scheduled to run.

Your water heater should be set at whatever is the maximum hot water temperature you want to have available at any and all times (120°F is considered normal). The setting has no direct relation to operation of the recirculation system. Temp controls on gas water heaters often aren't labeled in degrees so you have to experiment with the setting until you get what you like.

“Or... potential cost savings of keeping a lower the temperature in the water heater (less gas) while running the recirculation (electricity) from morning until night?”

Be mindful of possibly creating Legionella in the DHW tank by lowering the temperature of the tank too much.The hot water recirculating pump should be installed as per the manufacturer’s instruction that should include instruction for programmable timing.

IMPO

SR

We recently installed a Watts unit on our water heater which has been amazing for providing hot water in the morning without me waiting sometimes up to a minute for warm enough water in which to shower. It has a timer, so I only have it running for 3 hours in the morning and again for a short while at bedtime. I know we have saved an incredible amount of water, and I suspect with minimal increase in electricity. One of the best improvements we made in this house. And at less than the cost of a few gallons of paint!