You probably don't think about your water heater until a cold shower suggests you need a new one. How to choose? Storage tanks cost less but tankless heaters save energy by only heating the water you draw. Hybrid electric/heat-pump models and solar water heaters are two newer options.
Before you shell out hundreds for a storage-tank heater or thousands for a tankless or solar model, see whether your old water heater can be fixed. A corroded storage-tank model is history. But a leaky drain or pressure-relief valve or a burned-out heating element can often be fixed. Rule of thumb: Consider a repair if the labor cost (which warranties often exclude) averages less than $50 per year over the years left in the warranty. Otherwise, buy a new one, especially if the warranty has run out.
Our tests through winter snow and summer heat also show that what you save with solar and tankless systems can vary significantly based on which one you buy and where you live. We also tested an add-on heat pump that, because of high maintenance, costs far more than its low price suggests.
Most storage-tank water heaters look alike on the outside. But sawing open a cross-section of gas and electric storage-tank models in our lab confirmed that paying a little more typically buys a better water heater. Those with longer warranties tended to have larger heating elements, thicker insulation, and thicker or longer corrosion-fighting metal anodes.
Longer warranties were also a good indication of better quality for tankless water heaters. But their added complexity can mean more potential problems. Some tankless heater manufacturers shorten the warranty for units used with hard water and in multifamily homes. And most recommend service once a year by a qualified technician.
Hybrid heaters meld an electric storage-tank heater with a heat pump that captures warmth from the air. Those we tested provided annual savings of about 60 percent over electric-only models. You'll also save by replacing a broken oil-fired heater with a hybrid. But if you're replacing a heater that runs on natural gas, which is relatively inexpensive, it probably won't pay to switch.
Solar heaters supplement an electric heater with heat from the sun's rays. The best in our tests saved us about 80 percent over an electric storage-tank heater alone during the summer months at our Yonkers, N.Y. headquarters. But for us, those savings plummeted to about 30 percent during cold weather. How much a solar system saves you can vary widely based on where you live, your home's sun exposure, and which system you choose.