The most common and most likely answer to this crossword clue is the 6 letter word BOILER
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More clues leading to the result BOILER
Buddy explains!

The straight part
We know that "Water-heater" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case water-heater = boiler.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does BOILER mean?
BOILER noun- A person who boils something.
- A steam boiler.
- An apparatus for heating circulating water or other heat transferring liquid.
- A device consisting of a heat source and a tank for storing hot water, typically for space heating, domestic hot water etc., disregarding the source of heat.
- A kitchen vessel for steaming, boiling or heating food.
- A sunken reef, especially a coral reef, on which the sea breaks heavily.
- A tough old chicken only suitable for cooking by boiling.
- Boilerplate.