Water Heater
Buying Guide

Picture of a water heater.
Water Heater Buying Guide

Finding The Best Water Heater

Water heaters tend to fail at the worst time like just after you’ve lathered up your hair or when you’re expecting a house full of company. So it’s best to replace yours before you find yourself left without hot water. For example, if your water heater has a 12-year warranty and it’s been in service for 15 years it might be time to consider a new one. In homes with hard water, which can be tougher on water heaters, a heater may fail within the warranty period.

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 from the Department of Energy, smaller water heaters (under 55 gallons) will see a modest boost in efficiency of about 4 percent, while larger water heaters (55 gallons or more) may cut your utility bills by 25 to 50 percent depending on the technology used.

While almost half of homeowners replace their electric water heaters themselves, it’s probably wise to consult a professional or at least a manufacturer to fully understand the new regulations and what they mean to your particular installation. Note: We do not currently have Water Heater Ratings.


Finding The Best Water Heater


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: Chris Philpot

Types of Water Heaters

Depending on how much hot water you use and how you are 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 it payback might take a while.

Storage Tank

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

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

Tankless (or On-Demand)

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 such as running the 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.

Heat Pump (or Hybrid)

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

And because the heat pump itself is usually on top, a hybrid heater can require 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.


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 an attractive option for warm, sunny regions.

But savings suffer on cold and cloudy days when the process slows or stops. Most models employ a backup system that kicks in when needed.

And even with federal and local rebates, the thousands you'll typically spend to buy and install a solar system can mean you'll wait anywhere from 10 to 30 years to recoup your costs.


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 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. We suggest choosing models 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 model. Simply look for a heater with a 12-year warranty, which typically includes a longer or thicker element.

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

Glass-Lined Tanks: A glass-lined tank is designed to reduce corrosion. During manufacturing, a coating is applied to the inside of the steel tank and heated to form a protective, porcelain-like layer.

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


Brands That Matter

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.