You really should have the heater in an area closer to the return pump...or so I've heard. I do that myself. Yes, in a refugium, the heater will read the local temp and once the fuge is warmed, will shut off and start up with small temp changes. This could also burn out the heater.
In an area closer to the return pump, the heater is registering heated water from the entire system as it is dumped into the return chamber and warming it to send back to the display.
Dave
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