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Water Heater Buying Guide

No one wants to take a cold shower or have high energy costs. That makes picking the best and most efficient water heater a pretty important decision. Learn how to provide your family with reliable hot water year after year.

baby in the bathroom floor holding a bowl of soapy water

3 Things to Consider When Buying a Water Heater

  1. Fuel Type
  2. Storage Type
  3. Space

Fuel Type

With energy efficient models and new technology options available, water heaters are no longer limited to the traditional electric and gas options. Compare the choices below to determine the water heater best suited for you.


  • Uses one or two heating elements to heat water.
  • Less expensive than other types.
  • Variety of high efficiency options available.
  • Size range: 2.5 gal. to 70+ gal.


  • Uses a burner to heat water.
  • Needs circulating air around it.
  • Do not store combustible materials close by.
  • More expensive than electric water heaters.
  • More energy efficient than electric water heaters.
  • Size range: 30 gal. to 70+ gal.

Heat Pump or Hybrid

  • Uses energy from the air to heat the water.
  • Can use outside air, or air from the room it’s stored.
  • Available as built-in water tanks or add-ons to existing tanks.
  • Larger than standard electric water heaters.
  • More expensive on the front end.
  • Much lower yearly energy costs.
  • Size range: 40 gal. to 70+ gal.


  • Uses heat from the sun to heat the water.
  • Most require a backup system for cloudy days.
  • Federal and state tax incentives available.
  • More expensive on the front end.
  • Much lower yearly energy costs.
  • Size range: 34 gal. to 70+ gal.


Water Heater Types

comparison chart of family size to gallon capacity

Next, consider the size of your family and the utilities in your area to choose the best water heater. It's important to keep the following things in mind:

Storage tank water heaters are the most common type and the best water heaters to buy. These units have an insulated tank where water is heated and stored until it's needed. They're available in electric, liquid propane (LP) and natural gas models. Natural gas and LP water heaters normally use less energy and are less expensive to operate than electric models of the same size.

  • Storage tank water heaters are designated by the amount of water they hold in gallons. Tank size is one of the major considerations when purchasing one of these water heaters. If you intend to use a storage tank water heater, use our chart as a guide to finding the size you need.
  • Another consideration for storage tank water heaters is recovery rate — the number of gallons of water they can heat in an hour. The greater your demand for hot water, the higher recovery rate you need.
  • When you buy a water heater, look at the energy efficiency and yearly operating costs of a water heater before you decide which one is right for your needs. This information can be found on the EnergyGuide label.

Small storage tank water heaters, known as point of use or utility water heaters, are good choices for adding hot water to outbuildings, shops or garages. Utility water heaters usually range in size from 2.5 to 19 gallons. The largest of these miniature units can also be used to provide hot water to secondary bathrooms that may be situated far from your home's main water heater.

Tankless or on-demand water heaters don't store hot water; they heat water as it passes through a series of coils in the unit. Since the unit only heats water as you use it, a tankless heater is usually more energy-efficient than a traditional storage tank water heater. They're available in electric, LP and natural gas models. A tankless unit can provide only a limited volume of hot water. Most tankless units can provide up to 3.5 gallons of heated water per minute. These units are a good choice for anyone whose demand doesn't typically call for hot water at more than two points at a time.

Hot-water dispensers are convenient point of use water heaters. They're great for making soups, sauces, oatmeal and other instant foods. These units provide 190°F water instantly, so be careful when using them.


Finally, determine the height and width to ensure adequate space is available for installation.

Know the dimensions of the space where your water heater resides. If your hot water use increases and you need to upgrade to a larger tank size, it may be necessary to run plumbing to a different area so the new, larger unit will fit. One alternative to running new plumbing is to purchase a lowboy water heater. These units are shorter and bigger around than a normal water heater, allowing them to hold the same amount of water as their larger counterparts while still fitting in areas with limited headroom.

Advanced Water Heater Technology

High Efficiency
There are two reasons to consider high-efficiency water heaters: saving money and helping the environment. Water-heating efficiency is measured by an Energy Factor (EF) rating. The higher the EF, the more efficient the model. While some of the most efficient models might be slightly more expensive, they're designed to save you money in the long run — and they'll do so in an environmentally friendly way. Compare the performance and operating costs of different water heater models by taking a look at the EnergyGuide label. This information gives you an idea how the water heater model
you’re considering is expected to perform, and it even lists the model’s estimated annual operating cost.

ENERGY STAR is the trusted, government-backed symbol for energy efficiency, helping consumers save money and protect the environment through energy-efficient products and practices. Many efficiency-conscious homeowners choose ENERGY STAR approved models for their environmental benefits as well as long-term savings.

Intuitive Technology

A new line of water heaters now allows the temperature and other operating features to adjust according to your specific needs and use patterns. Benefits include better energy efficiency, increased durability and smarter performance.

Premium Electronic Gas Valve
Certain gas water heaters now feature a new, advanced electronic gas valve. With fewer moving parts than a conventional mechanical gas valve, this yields more reliable and accurate performance for better temperature control and faster hot water recovery. An LED (light-emitting diode) indicator confirms the pilot is lit, as well as providing diagnostic feedback on operating performance. This innovative valve is self-powered by a thermopile, so no external power source is required, making for easy installation.

Dry-Fire Protection
Available for electric water heaters, this keeps the upper element from burning out if the unit senses no water around it.

Water Heater Accessories

There are many accessories available to improve safety and efficiency in your water heater.

  • Water heater stands raise gas units off the ground and reduce the risk of fire in the event of a flammable liquid spill nearby.
  • Water heater pans sit under the heater and collect water from leaks or overflows caused by excess pressure in the tank. The pan has an opening in the side for a drain hose to carry away any overflow water.
  • Water alarms sit either on the floor or in the pan beside the water heater. If the heater leaks or overflows, the alarm will sense the liquid and give an audio alarm to alert the homeowner that there's a problem.
  • Expansion tanks are plumbed to the water heater. They're designed to hold the extra volume of water that can be produced when cold water is heated in the tank.
  • Pressure regulators are connected to the outlet side of the water heater to keep the water pressure from exceeding a preset limit as it exits the tank. Regulating the pressure helps protect the interior pipes from leaking or bursting due to pressure surges in the plumbing system
  • Timers are wired into the unit's electrical supply and can be set so the water heater only draws electricity at specified times. You can cut down on energy use and save money by running the water heater only when needed.
  • Insulating water heater blankets are made especially to fit over the unit and reinforce the insulating ability of the water heater. Insulating blankets are best for heaters that reside in garages or other unheated spaces.