Water Heater
Buying Guide

Picture of a water heater.
Water Heater Buying Guide

Find The Best Water Heater


If you haven't replaced your water heater in a few years, you'll find more choices—and more energy-efficient regulations—so do your homework. You may have to spend more up front for a model that will save you money over time.

Water heating amounts to nearly 20 percent of a home's energy costs. As the result of new efficiency standards, water heaters under 55 gallons will see about a 4 percent boost in efficiency, while water heaters 55 gallons or more may cut your utility bills by 25 to 50 percent depending on the technology used.

It’s wise to consult a professional or a manufacturer to fully understand the new regulations. Note: We don't currently have Water Heater Ratings, but are able to offer this buying guide, which contains helpful tips and advice.


Consider Capacity

Most water heaters are sold on the basis of how many gallons they hold. A family of four, for instance, might take several showers, run the dishwasher, and wash a load or two of laundry in an average day, totalling 100 gallons of hot water or more. But that doesn’t mean they need a 100 gallon storage tank.

It’s more important to consider the first-hour rating (FHR) for storage-tank water heaters and the gallons-per-minute rating (GPM) for tankless water heaters because that’s what tells you how much hot water the heater can deliver over a set period of time, i.e., the first hour.

After that, depending on how quickly you're using up hot water, it could either become less hot or actually cool. It would then take a certain amount of time (variable by model and capacity) to return to its full FHR. A pro can help you calculate how much capacity you'll need.

And while an on-demand water heater doesn't "hold" any water (unless it has an auxiliary tank), it has a rating of how much hot water it can produce in a given period, known as the GPM (for Gallons Per Minute). You get continuous hot water unless you draw from multiple sources at once, e.g., a shower and the dishwasher. If you frequently do this, you might consider two units.

And don’t assume a new water heater will fit where your old one was. Because of increased insulation and other efficiency improvements, some newer models may be wider and/or taller than your old water heater.

Illustration of a peak capacity comparison between a small ( up to 55 gallons) and larger water heater (Over 55 gallons).
Illustration: Chris Philpot

Types of Water Heaters

Depending on how much hot water you use and how you're heating the water (gas, oil, electricity), there are several choices. Some types claim to cut energy costs by up to half that of regular storage models. But their added up-front costs mean its payback might take a while.

Illustration of a storage tank water heater.

Storage Tank Water Heater

Storage tanks are the most common type of water heater. As the name suggests, these consist of an insulated tank in which water is heated and stored until needed, then emerges from a pipe on top of the water heater.

There is also a temperature and pressure-relief valve, which opens if either exceeds a preset level.

Natural gas water heaters typically use less energy and cost less to run (by about half) than electric water heaters, although you should note that gas models cost more at the time of purchase.

Illustration of a tankless/on-demand water heater.

Tankless (On-Demand) Water Heater

Rather than storing water, tankless water heaters use heating coils to heat the water as you need it. They’re more energy-efficient than a storage tank, but provide only a limited flow of hot water per minute—about 3.5 gallons.

They’re best for people who typically aren’t drawing water for more than one use at a time—running a shower and dishwasher simultaneously.

Tankless models are best for homes that use natural gas to heat the water; electric models might require an expensive upgrade of the home's electrical capacity.

Illustration of a heat pump/hybrid water heater.

Heat Pump (Hybrid) Water Heater

These capture heat from the air and transfer it to the water. They use about 60 percent less energy than standard electric water heaters. And while they cost more than electric-only models, installation is similar and payback time is short. But they don’t work well in very cold spaces and need to be placed in an area that stays 40 to 90 degrees.

And because the heat pump is on top, a hybrid water heater needs as much as 7-feet clearance from floor to ceiling. You'll also need up to 1,000 cubic feet of uncooled space to capture enough heat from the air as well as a nearby drain to discharge the condensate.

Illustration of a solar water heater.

Solar Water Heater

A roof-mounted cell absorbs the sun's heat and transfers it to an antifreeze-like fluid in a closed-loop system that runs to the water tank. The best deliver stellar savings in summer, making them attractive for warm, sunny regions. But savings suffer on cold and cloudy days. Most models employ a backup system that kicks in when needed.

Even with federal and local rebates, what you'll spend to buy and install a solar system can mean you wait 10 to 30 years to recoup your costs.

Illustration of a condensing water heater.

Condensing Water Heater

Condensing water heaters are an option if you heat with gas and need a unit with a capacity of more than 55 gallons.

These models have a tank like a conventional water heater, but capture exhaust gases that would normally go out the flue, which wastes energy. These gases are blown through a coil in the base of the unit, where incoming cold water can absorb most of the heat.


Features to Consider

Warranty: Coverage for most water heaters typically runs 3 to 12 years. While you'll usually pay a bit more for longer-warranty models, we've found that they tend to have larger elements or burners that can speed up water heating and thicker insulation for less heat loss. Choose a water heater with the longest warranty available.

Anti-Scale Devices: Some brands advertise features that are supposed to reduce buildup of mineral scale at the bottom of the tank by swirling the water. While scale can shorten the life of the heating element, you don‘t need to invest in fancy features to get a long-lived water heater. Just look for one with a 12-year warranty, which typically includes a longer or thicker element.

Brass vs. Plastic Drain Valves: These are situated near the base of the water heater for a garden hose for draining the heater. Look for brass drain valves, which are more durable than plastic.

Glass-Lined Tanks: Designed to reduce corrosion.

Digital Displays: Help you monitor levels and customize operation. Some electric/heat-pump hybrid water heaters let you set a vacation mode that uses just the heat pump for added efficiency when you're away. Displays on solar water heaters often show tank and collector temperatures, along with pressure readings and other info.

A.O. Smith makes residential and commercial water heaters, boilers, and storage tanks that are sold exclusively by plumbing wholesalers and plumbing contractors. It manufacturers tankless, hybrid, solar and high-efficiency tank water heaters.
General Electric makes gas and electric water heaters. GE tank water heaters are available in multiple sizes, with energy-efficiency claims that vary by size and multiple levels of warranty coverage. The company’s tank water heaters are available exclusively at Home Depot. General Electric recently introduced GeoSpring, a line of made in the U.S. heat pump electric water heaters.
Kenmore makes gas and electric water heaters. Kenmore water heaters are available in multiple sizes, Power Miser, and Hydrosense electronic-temperature-control configurations. Kenmore water heaters are available at Sears.
Rheem manufactures and markets gas and electric water heaters. Rheem makes residential water heaters in tank, tankless, and point-of-use configurations and units that work with solar water-heater systems. Rheem water heaters are available in multiple sizes and with multiple warranties, with energy-efficiency claims that vary by size. Rheem tankless water heaters are available at Home Depot. Its tank water heaters are available online and through a network of dealers.
Whirlpool manufactures and markets gas and electric water heaters. Whirlpool tank water heaters are available in multiple sizes, and standard and power vent configurations. Whirlpool water heaters are available at Lowe’s.
Other water heater brands currently on the market: Bradford and White, Ecosmart, Heat Pump, Rinnai, and State.