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Your Guide to Choosing the Right Water Heater


Your water heater is a vital part of your home, providing the hot water your home needs for washing clothes and dishes, bathing, and more. Picking the right water heater will ensure that you not only have a steady supply of water but that it also is produced with a minimal amount of energy, saving you money and protecting our environment.

In this guide we’ll examine different types of water heaters and the fuels they use, plus examine the advantages and disadvantages of each type, so you can make a smart decision on what to choose for your home. 

Table of Contents

  1. Energy to Heat Your Home’s Water
  2. Storage Water Heaters
  3. Tankless Water Heaters
  4. Heat Pump Water Heaters
  5. The Power of the Sun — Solar Water Heaters
  6. Making Your Decision

A steady and reliable supply of hot water is something we take for granted and use for a variety of household tasks, from washing clothes and dishes to enjoying a hot shower. But perhaps your hot water heater has failed, or you’d like to save money on energy costs by purchasing a new, more efficient system. There are several factors you need to consider when choosing the right water heater for your home.

  • Water heater size – A water heater isn’t of much use if it doesn’t have the capacity to handle your family’s needs. You’ll need to consider all of the different times and ways you use hot water in your home.

  • Type of water heater – As we’ll see, there are a number of different water heater types available. Some, like storage water heaters, are common, while other newer water heater types may be less familiar to you.

  • Fuel type – Electricity, gas, solar, geothermal? There are several different energy sources that can be employed to heat your home’s water. Each comes with advantages and disadvantages that will make them more or less suitable for your particular application.

A water heater can be a significant consumer of energy in your home. Let’s first examine the different energy options available for heating your home’s water.

Energy to Heat Your Home’s Water

It takes energy to heat water. The energy source you use will depend upon the availability and cost of available sources, as well as the needs of the type of heater you’ll be installing. Here are the most commonly used energy sources.

  • Electricity – Electricity is widely used throughout the United States for water heating. It’s versatile and can be used with storage, on-demand, and heat pump water heaters, as well as being employed in active solar systems to aid in water circulation.

  • Natural gas – If your home has gas, it’s worth considering employing it in storage and on-demand water heaters.

  • LP gas – LP gas or propane is readily available throughout the United States and is suitable for use with storage or tankless water heaters.

  • Solar – Solar energy is an attractive option in sunny and warm climates like ours. If your home’s geography and location support the addition of a solar system, you can potentially make some significant savings in water heating energy costs.

  • Geothermal – Geothermal energy is worth considering as an energy source for water heating when used in conjunction with a heat pump water heater. It’s most practical application is in conjunction with existing geothermal heat pump systems used for heating and cooling.

When considering the energy source for your water heater, be sure to consider the costs of the fuel source. It’s smart to start off on the right foot if you’re building a new home, and it may be worth switching from your current source if you’ll save money in the long term. Of course, it’s not always an apples to apples comparison, since the type of heater you’ll be installing will be the major determinant of how much energy will be used.

Now let’s examine the different options available for home water heating on a case-by-case basis.


Picture a hot water heater in your mind and a storage water heater is probably the image you’ll see. Conventional storage-tank water heaters have been around for quite a while and are still one of the most popular options used in the home. There are several attractive benefits, plus a few downsides to storage water heaters. Let’s examine some pros and cons.


  • Simple technology – Storage water heaters are simple in concept. A heating element or burner heats water in the tank and maintains it at the correct temperature with the use of a thermostat. The basic principle is simplicity itself.
  • Variety of fuels – Storage water heaters are readily available in models designed for electricity or gas (LP or natural gas).
  • Low upfront costs – Storage water heaters are abundant and relatively inexpensive. They’re an excellent option if you want to spend as little money upfront on your water heater as possible.

Storage water heaters come with a few drawbacks as well. Consider these factors when you’re deciding between different types of hot water heaters.


  • Standby heat loss – A storage water heater needs to maintain the temperature of the water it is storing, so it will need to consume energy throughout the day, even when it’s not being used. This can be offset somewhat by the use of timers and programmable thermostats.
  • Higher operating costs – Because of standby heat loss, you’ll use more energy to operate a storage water heater. As noted above timers and programmable thermostats can offset this somewhat, along with selecting a heater with a well-insulated tank and high Energy Star rating.

Fuel Options

Water in a storage water heater can be heated either with electric heating elements or gas burners, plus some other options as well.

  • Gas – Gas water heaters are typically a bit more expensive than electric models, but depending on the cost of gas in your area can be less expensive to operate. As a rule of thumb, you can usually make up the extra cost of a gas water heater in around one year. If you’re buying a water heater for use with propane, make sure that it’s compatible.

  • Electricity – As noted above, electric water heaters are usually less expensive to purchase upfront but have higher operating costs. If you’re going electric, look for models with the highest EF (energy factor) number. Choose the highest rating to get the most efficient water heater.

  • Solar and geothermal – Geothermal and solar water heating systems employ a storage tank, so they can be classified as storage systems. Because of the specific requirements of these water heaters, we’ll discuss them later in this article.

Sizing a Storage Water Heater

The most important number to consider when sizing a storage water heater is the “First Hour Rating.” This is a measure of the number of gallons of hot water that the heater can produce in an hour, assuming that the tank is fully heated at the beginning of the hour. Match this number with the expected peak demand of your home’s hot water usage and you’ll always be certain to have enough hot water on hand. You’ll find a handy chart to assist you in this calculation here.


Tankless water heaters (also known as demand water heaters) provide hot water only when you want it. This means that they eliminate one of the main drawbacks of storage water heaters, the energy cost of standby operation. That can save you money. Tankless water heaters use electric heating elements or gas burners to heat water as it travels through a pipe in the unit, so there’s no need to keep a ready supply of hot water stored in a tank. However, it’s important to ensure that your tankless water heater has the capacity to supply all of your potential simultaneous hot water requirements, like showering and washing clothes.


  • Improved energy efficiency – Because you’re not heating water continually, tankless water heaters have the potential to help you rack up big savings in energy use. One caveat to this is that gas-powered tankless water heaters will need to keep a pilot operating at all times. That can bump up their energy use slightly.
  • Point of service installation – Small tankless water heaters can be installed almost anywhere, so they’re an excellent way to add hot water to a home addition without resizing the home’s entire water heater system.
  • Space savings – Without a bulky tank, tankless water heaters require very little space. That could be useful in small homes with limited basement (or no basement) space.


  • Inconsistent water temperatures – It’s important to size tankless water heaters properly, or you can end up outstripping capacity when hot water demand is high. In some cases, it may be necessary to install more than one heater in different locations throughout the home.
  • Higher initial costs – Efficiency comes at a cost. Tankless models have a higher purchase cost, and often require more in labor costs for installation than conventional storage water heaters.

Fuel Options

Tankless water heaters are manufactured in electric and gas models. Here are some factors to consider with the different types of fuel sources.

  • Gas – Tankless water heaters can operate on either gas (natural or LP) or electricity. Gas has the advantage of higher flow rates and quicker heating than electricity, but the necessity of keeping a pilot light lit means that they may be somewhat more expensive to operate than an electric model.

  • Electricity – Electricity is a very viable option for a tankless water heater. As noted above, electric units won’t match the flow rate of a gas-powered model, but they don’t incur the standby costs of keeping a pilot light lit. If you’re using a tankless heater to heat water for a remote location, like a bathroom in an addition, electricity is a smart choice, since you won’t need to run a new gas line to the heater location.

Sizing a Tankless Water Heater

Tankless heaters are rated by a combination of flow rate and temperature rise. This is a bit more complicated than a storage type system; in short, you’ll need to add together the flow rate of all of the devices that may use hot water at the same time, then determine how hot the water will need to be for each application. This can make it hard to estimate the actual requirements of your home. It’s a good idea to consult with an experienced contractor about your requirements and get their input on what will work well in your situation.


Heat pump water heaters are a variation on conventional storage water heaters that deserve some explanation. Heat pump water heaters don’t generate heat directly through the use of an electric heating element or gas burner, but instead drawn on outside heat and concentrate it inside the unit to heat water, providing much greater energy efficiency than electric or gas storage water heaters.

Heat pump water heaters can also employ geothermal energy. Rather than drawing upon the temperature of outside air, the system can tap into the warmth of the ground beneath our feet to gain heat. Geothermal heat pump water heaters are an excellent option to consider if you already have or are installing a geothermal system for your home’s heating and cooling

Here are some important considerations about heat pump water heaters.


  • High energy efficiency – Heat pump water heaters draw much of the energy used for heating water from the surrounding environment and don’t consume fuel in the process of heating the water. This can result in substantial energy savings.


  • Higher initial costs – While you’ll save money over the long term, the initial outlay for a heat pump water heater is substantially higher than for a conventional storage water heater.
  • Specific temperature requirements – To operate effectively, the air around a heat pump water heater can’t be too cold. They’re not a good choice for colder climates and care needs to be taken that they’re installed in an area that doesn’t get too cold in winter, like an unheated garage or basement.

Sizing a Heat Pump Water Heater

Determining the size of a heat pump water heater uses the same method as regular storage water heaters. Consider the “First Hour Rating,” the measure of the number of gallons of hot water that the heater can produce in an hour, assuming that the tank is fully heated at the beginning of the hour. Match this number with the expected peak demand of your home’s hot water usage and you’ll always be certain to have enough hot water on hand. You’ll find a handy chart to assist you in this calculation here.


When you think about tapping into the power of the sun for your home’s energy needs, you may have visions of electricity-producing solar panels on your roof. But there’s another way to cut energy costs with sunlight, and that’s using it to heat the water for your home. Solar water heaters are a proven way to heat your water and they may be a more practical solution than you think.


All solar water heaters share some common parts — solar collectors, where the water is heated by sunlight, and storage tanks, where the hot water is stored, in the same manner as with conventional storage water heaters. We can then categorize solar water heating systems into two types, active and passive. Here are the basics of each type of system.

  • Active systems – These water heater systems use electrically-powered pumps and controls to circulate the water through the system. They come in two varieties:
    • Direct circulation system – With these systems, water is pumped through solar collectors to be warmed and then stored. If you live in an area where freezes are uncommon, these are an excellent choice.
    • Indirect circulation system – An indirect circulation system doesn’t pump water, but rather uses a heat-transfer fluid. This fluid then flows through a heat exchanger that warms your water. Because heat-transfer fluids are non-freezing, this is a smart choice for colder climates.
  • Passive Systems – Less expensive than active systems, passive systems may not be quite as efficient as active systems. However, they generally require less maintenance and have proven themselves to be a reliable means of heating water. Here are two common types of passive systems.
    • Thermosyphon systems – These systems employ basic physics. Since warm water rises, water flows through a series of collector tubes and rises to the water tank when it’s sufficiently warmed. One important consideration for these systems is that the storage tank needs to be mounted above the collector tubes, so your home’s attic needs to be able to support the weight of the storage tank.
    • Integral collector-storage passive systems – ICS systems present a hybrid approach to water heating. Water is circulated through solar collectors, where it is preheated. The preheated water then goes to a conventional water heater to finish the job.


  • Outstanding energy efficiency – The energy of the sun is free to use. A properly installed solar water heater will provide plenty of hot water at a minimal cost.
  • Return on investment – That free energy will result in substantial savings on water heating energy use, so you can repay your investment in the system as time goes by. Small footprint compared to other solar options – It takes a large number of electricity-producing solar panels to make a dent in your home’s electricity use. A solar water heating system, on the other hand, requires only a few solar collector units to heat your water.


  • High initial costs – A solar water heater requires a serious investment. It may take you several years to recoup the initial cost through your energy savings.
  • Climate variables – You do need to live in an area that receives substantial sunshine to reap the full benefits of a solar water heater. In areas with less sunshine, you may need to install supplemental heaters to handle times of the year when there’s limited sunshine.

Important Considerations

There are more variables to consider when installing a solar water heater than there are for the other water heaters we’ve discussed so far. It’s important to take these factors into consideration as you consider whether or not a solar water heater system is right for you.

  • Evaluating your site – To achieve maximum efficiency you’ll need a south-facing roof that has sufficient space to install the solar collector devices.

  • Balancing cost and efficiency – While the energy savings of a solar system are undeniable, it may take some time to recoup the investment a solar water heater requires. You’ll need to balance the cost of the system with how long you plan to own your home and how much return on investment you can count on if you sell your home.

  • Checking local codes, ordinances, and HOA rules – A solar water heater requires external apparatus — the solar collectors on your roof — to operate. It’s important that you review local codes and ordinances, as well as any homeowner association rules, before contracting to have a solar water heater installed. Consult with a contractor with experience in your area. They should have a good knowledge of local rules.

Sizing a Solar Water Heater

Sizing a solar water heater system is a more complicated process than sizing a storage or on-demand unit. The key determinants are the total amount of area that’s dedicated to the solar collector, plus the storage volume necessary to meet your household needs. For the first two family members, you’ll need 20 square feet of collector area, then an additional 8 square feet for each additional person. For areas that aren’t as sunny as Dallas-Fort Worth, the amount of collector area will need to be even greater. For volume, a good rule of thumb is 50-60 gallons of capacity for two, then increasing to 80 gallons for three to four people. To be sure about your needs, it’s best to consult with a contractor who’s experienced with solar systems. They have the tools and local experience to know what will work best for you.

Making Your Decision

As we’ve seen, there are a number of different choices you can make when deciding on a water heater, whether it’s for new construction, remodeling, or replacing an old unit. Each has its own advantages and disadvantages, and the perfect choice for one home may not be ideal for another. Make your choice based upon what offers you the best performance and efficiency, while considering the cost of the installation and the future costs of fuel and maintenance.

You don’t have to go through this process alone. After you’ve taken a look at the different types of systems, you’ll probably have questions and will want some professional guidance. That’s where we come in. Our team of experienced professionals at Team Enoch can answer your questions and help you sharpen your focus. And remember, estimates are free with Team Enoch, so contact us right away. We’ll be happy to help you make a smart decision when it’s time to choose a new water heater.

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5 comments on “Your Guide to Choosing the Right Water Heater”

  1. Thank you for mentioning how you can install a tankless water heater in almost any section of your home. My wife and I moved into a fixer-upper home a few months after we got married last year, and we would like to find a small water heater that will be able to fit inside of the narrow laundry room in our basement. We'll consider getting a tankless system so that we can find a suitable spot to have it installed.

  2. I need a new water heater my 16 year old heater needs replacing . Do not want to pay for a expensive one as I had my house sold and my pipes broke and the I insulation been removed but I need a electric water heater 40gal

  3. Appreciating the hard work you put into your site and detailed information you provide.

    It's awesome to come across a blog every once in a while that
    isn't the same old rehashed information. Fantastic read!

    I've saved your site and I'm adding your RSS feeds to my
    Google account.

  4. It's good to know that you need to consider the size of the water heater. My husband was telling me last night about how he is needing to look into getting a water heater for his office building in a couple of weeks, and he wants to make sure that he can choose the right one. I'll make sure to pass these tips along to him as he searches for a water heater to choose from.

  5. I love how you mentioned the space and energy-saving capabilities of tankless water heaters. Here in our condo unit, we don't have a lot of room for larger appliances, so we were trying to find a more efficient way to get hot showers. Once I find a water heater installation expert in the area, I'll definitely get their assistance with installing a tankless unit.

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