Water Heater Buying Guide

Water Heater Buying Guide

Although often overlooked, water heaters take up approximately 20% of the overall expense of a household. They typically are forgotten until they break or stop working in some way. The following buying guide will explore the type of water heaters available today as well as their corresponding costs, savings, and in which situation each one is best suited for.

When considering replacement or brand new installation, you will be delighted to find that newer models have been designed to be more energy-efficient, with novel tankless models being the most efficient. When replacing a traditional storage tank-type model for your home, it is usually more cost effective to purchase a new storage tank water heater in either gas or electric like you had before. Changing the style of the water heater to a tankless design will require expensive plumbing and/or electrical updates to your home to accommodate the new system. For this reason, it is a better financial decision to install a tankless system in a brand new home or add-on to your home rather than in the old location of your current house. 

To demonstrate the differences in features and costs, Consumer Reports tested electric and gas tankless, or on-demand water heaters from the following brands:  Bosch, Navien, Noritz, Rheem, Rinnai, Tempra, and Trutankless. One gas and one electric traditional storage tank water heaters as well as one electric heat pump water heater from the Rheem brand was then compared against the tankless models. They put each type and model through a “heavy use” test which consisted of using approximately 84 gallons/day (i.e., several showers, dishwasher run, a load of laundry, and repeated faucet uses). The inlet temperature for gas and electric models were 58° F and 74 (+ or – 2)° F respectively and an outlet temperature of 120° F. Results of the tankless water heaters were similar and therefore were averaged for both gas and electric and then compared with the performance of the conventional models (gas and electric). Payback time for both new and replacement installations was calculated based on purchase price, yearly energy cost, and average cost of installation. It was ultimately determined that payback time would be more if a tankless model was installed in place of a storage tank model versus if the tankless model was installed in a brand new home. 



The size of your storage water tank will need to depend on the size of your family and other associated factors like how many appliances and tasks will typically require hot water on any given day. The three average storage tank sizes are 40, 50, and 55 gallons. While a family of four, for example, may use around 100 gallons of hot water in a day, they do not need a tank that holds 100 gallons of water but rather they need a tank that has the ability to refill with water once depleted within a reasonable amount of time to accommodate for the family’s hot water needs over the course of a day. Also first-hour rating, or the number of gallons delivered per hour, should be determined and considered when making the right choice for your family. Locate the EnergyGuide label for FHR in a storage tank and also reference online calculators available for personalized determinations.

Recently updated energy efficiency standards have increased efficiency in 55 gallon and below models by 4%; 55 gallons or more models have been boosted by 25-50% depending on the technically implemented. Also keep in mind that newer higher-efficiency models often take up more space so they may not fit easily into the usual spot and may need additional space accommodation or a new location to be installed properly.

Tankless water heaters heat water on demand so instead of measuring their gallon capacity per hour, you would instead want to find out the gallons-per-minute (GPM) rating. The higher the GPM, the more hot water that can be delivered to the house. A larger household would need to install a tankless water heater with a high GPM to adequately meet their hot water needs.


Types of Water Heaters

The type of water heater you purchase for your home should depend on a variety of factors. Some of these factors include purchase price, water capacity, speed of use, energy savings, etc. The features of the most common types of water heaters are discussed below.

Storage Tank Water Heater

The most common and traditional style of water heater is called a storage tank water heater. As the name implies, this model type consists of a large storage tank for water that is then heated using gas or electricity, depending on the model. Once the water is heated, it remains hot in the tank until either a faucet or an appliance initiates hot water to be sent to their location in the home. It contains a temperature and pressure relief valve that is designed to open if either the water gets too hot or the pressure too high. Traditional gas-powered water heaters generally cost about half to operate in comparison to electric models, however they cost more to purchase.

Tankless/On-demand Water Heater

In contrast to a traditional storage tank, tankless water heaters do not store water in a tank but instead utilize heating coils to heat the temperature of water from the main supply on an on-demand basis. They are far more energy-efficient than their conventional counterpart, however they cost much more to buy and install and often require your plumbing to be retrofitted to accommodate for the new system. Also, tankless water heaters can not provide as large an output of hot water within a period of time as compared to the tank-type water heaters. These models best serve households that do not need to use hot water in more than one way at once. Homes that run off of natural gas are also better candidates for tankless heaters versus electric models because the electrical systems often require costly electrical upgrades in the home for operation. 

Heat Pump (Hybrid) Water Heater

A heat pump or hybrid water heater captures heat from the surrounding air and transfers it to the water heater in order to heat the water. They are very energy-efficient: 60% less energy than an electric water heater. Although their purchase price is more than a traditional electrical model, the installation cost is similar and the payback time is short due to their energy-savings. Keep in mind, however, they are not a suitable fit for homes in cold locations or spaces (needs temperatures of 40° F to 90° F to function properly). These models also have the heat pump on the top of the unit, making their space clearance nearly 7 ft tall. They also require up to 1,000 cubic feet of uncooled space to draw warm air from for heating and a drain available for condensation output. 

Solar Water Heater

For a solar water heater system, solar panels installed on your roof absorb sun rays and transfer the stored heat to an antifreeze-like fluid in a closed-loop mechanism that connects to the water tank. They can save loads of money in the summer and particularly in warmer climates, however they are not a wise economical and practical choice for colder climates that also do not get as much sunshine year around. It can take between 10 and 30 years to receive the payback for the purchase cost. 

Condensing Water Heater 

For gas-powered households that need a large hot water capacity of more than 55 gallons, a condensing water heater is a good option. These systems have a traditional-style hot water storage tank but utilize exhaust gases that would normally exit out the flue to heat the water via a heated coil. 




The average water heater warranty ranges from 3-12 years. Although longer warranties cost more money, they typically are associated with water heater models that have high quality parts and operational equipment that will extend their life and be more energy efficient over the long term. It is advisable to look for water heaters with longer warranties. 

Anti-scale Devices

There are water heater brands that offer additional anti-scale devices to combat mineral buildup in your tank, however if you choose a water heater with a longer warranty (12 years or more) they are typically built with a longer and thicker element that naturally reduces this issue, making the additional anti-scale devices unnecessary. 

Brass vs. Plastic Drain Valves

A drain valve is located near the bottom of storage tank varieties and allows water to be drained out for maintenance and repair. It is advisable to purchase a water heater that outfits a brass drain valve versus a plastic one as they are much more durable. 

Glass-lined tanks

Some storage tank models have a glass lining that is designed to reduce corrosion. 

Digital Displays

Newer models sometimes come equipped with a digital display which aids in monitoring levels and allows operational customization. Some electric/heat pump hybrid varieties have vacation mode settings that default to only heat pump use while you are away for longer periods of time. Solar water heater digital displays can show tank and collector temperatures, pressure readings, etc.


Water Heater Brands

A.O. Smith 

This company manufactures residential and commercial water heaters, boilers, and traditional storage tanks via plumbing wholesalers and contractors. They build and sell tankless, hybrid, solar, and high-efficiency tank water heaters.  

General Electric

General Electric specializes in gas and electric water heaters available in a variety of sizes and warranty coverage. They are exclusively sold at Home Depot. They also manufacture a line of electric heat pump water heaters called GeoSpring.


Kenmore also makes and sells gas-powered and electric water heaters in multiple sizes. They also offer Power Miser and Hydrosense electronic-temperature-control configurations. Sears and other retailers offer Kenmore water heaters.


Rheem company sells gas and electric water heaters. They are offered in traditional storage tank, tankless, and point-of-use configurations that function with solar water heaters systems. Their water heaters are available in various sizes with different warranties and energy-efficient claims. The tankless models are sold at Home Depot and the tank models can be purchased online and through select dealers.


Whirlpool also manufactures gas and electric water heaters in multiple size capacities and standard and power vent designs. This brand of water heaters are available at Lowe’s. 


Other water heater brands currently available include, but are not limited to: Bradford White, EcoSmart, Rinnai, and State.

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