Sunlight is incident on the Vacuum Tube, which passes through the outer transparent glass tube and strikes the outer surface of the inner glass tube coated with selective coating. The coated glass tube acts like a black body and absorbs the radiation and gets heated up in the process. The presence of vacuum between the two tubes prevents heat loss to the surroundings. This heated inner tube then transfers the heat to the water with which it is directly in contact. Thus water gets heated up.
Hot water has a lower density and hence has a tendency to rise up. Cool Water from the tank comes down to replace the hot water. This sets up a circulation by Thermo-siphon.
Sunrays remains always perpendicular to cylindrical absorber surface of vacuum tubes, so it can absorbs more energy. So efficiency of evacuated tubes greater.