You can have the diesel burner on, have the electric water heater on (if plugged in or running the generator) - one or the other, or neither, or both. So... yes, you can have the diesel burner and electric water heater on at the same time. A note: Our AquaHot has separate on/off and high/low thermostats, four of them, two for the diesel and two for the electric, and the electric thermostat shuts off at a higher temperature. So as the coolant cools in the AquaHot, the electric will turn on first... then the diesel burner will turn on second when the coolant gets to a slightly lower temperature, 5* or so cooler.