Turn off the pump and remove the drain plug for the water heater. If there is water in it, let it completely drain.
Set the bypass valve to the position that you believe will allow water to flow to the water heater.
Turn on the water pump. if water flows throw the water heater and out of the drain plug, you have it set correctly for normal usage.
If you like to wear a belt and suspenders, turn off the water pump and let the tank copletely drain, again.
Turn the bypass valve in the other direction and turn on the pump. No water should flow through the water heater.
Mark the valve so that you will know next time.
Tom
2015 Meridian 36M
2006 CR-V toad
3 golden retrievers (Breeze, Jinks, Razz)
1 border collie (Boogie)