How to Choose a Water Heater: A Buying Guide

There are numerous water heater types on the market, each fulfilling a particular niche or need. However, these types aren’t created equally. When you’re wondering how to choose the best unit for your family size and available utilities, look to this water heater buying guide for dependable advice or use it as a jumping-off point when asking a consultant for help purchasing a unit.

Storage Tank Water Heaters

The most common type of units, storage tank water heaters, come in electric models as well as natural gas and liquid propane models. These household appliances have insulated tanks that heat and store water until you need it. To determine the energy efficiency and yearly operating costs of each model, look at the product label in the store or product description online.

Advantages to these water heaters include flexible sizing that fits in both tall and compact spaces. Likewise, electric models are energy efficient in all climates, and the commonplace nature of their installation makes repair and replacement costs relatively low. Another benefit is these units withstand electrical outages when you choose water heaters powered by gas or propane.

Tankless or On-Demand Heaters

Tankless, or on-demand, water heaters don’t store hot water. Instead, they heat water as it passes through a series of coils in the unit. Because the unit only heats water as you use it, a tankless heater is usually more energy efficient than a traditional storage tank water heater because it doesn’t have to keep unused water hot. A tankless unit provides a limited flow rate of hot water — most tankless units can provide up to 7.5 gallons of heated water per minute. For this reason, these units are a good choice for anyone who doesn’t typically require hot water from more than two places in their home at a time.

Other benefits of choosing tankless water heaters include a space-saving design that frees up valuable storage space. And because these units don’t hold water, they eliminate the risk of leaky or burst tanks. Tankless water heaters do have drawbacks, however — they’re typically more expensive than conventional units, and you may need extra units to ensure appliances have an adequate hot water supply.

Electric Tankless Water Heaters

Electric tankless water heaters can provide hot water but don’t require as much space as a conventional storage tank model. Electric tankless models have longer life spans than standard electric water heaters and require less maintenance over time. While having a higher initial cost, the annual cost savings from the unit’s efficiency can be substantial for some households. Sizing and electrical requirements are different than tank style water heaters. It’s important that these units be sized appropriately, and the electrical service matches the water heaters needs. 

Natural Gas Tankless Water Heaters

If your home currently uses natural gas, then replacing your old gas tank water heater with a natural gas tankless water heater might be your best choice for comfort and value. These units are about the size of a small suitcase, and you can install them inside or outside your home. Long-lasting and super efficient. Keep in mind that a professional should always complete the installation of natural gas tankless water heaters.

Propane Tankless Water Heaters

Like the natural gas models, liquid propane tankless water heaters can take advantage of existing gas lines for a compact hot-water solution. Propane gas provides a bigger boost in British Thermal Units (BTUs) per dollar than electricity can, so propane tankless water heaters can double the output of hot water when compared to an electric model. Most models can support two to three appliances simultaneously, so your dishwasher, washing machine and shower can all have enough hot water to function. These units typically require professional installation due to safety issues.

Tip

Check out our Tankless Water Heater Buying Guide for tips on how to find the right tankless hot water heater.

Point-of-Use or Utility Water Heaters

Small storage tank water heaters, known as point-of-use (POU) 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. You can also use the largest of these heaters to provide hot water to secondary bathrooms situated far from your home’s main water heater.

Water Heaters for Mobile Homes

Mobile homes require a specific kind of water heater, which must be approved by Housing and Urban Development (HUD). You can purchase both gas and electric water heaters for mobile homes, but if you select gas, be sure to buy the correct type propane or natural gas, inside or outside access for your home.

Check if you need to pick a sealed combustion gas water heater if these units are enclosed with no outside access. When you have outside access, a standard gas water heater style are typically sufficient. Make sure to check your measurements carefully before installation, taking door openings in mobile homes into account due to their smaller-than-average sizing.

Commercial Water Heaters

Running a business that requires a high volume of hot water, like a restaurant, hotel or laundromat, requires a commercial water heater. These units can include a storage tank or be tankless, depending upon the amount of hot water the business uses. The majority of commercial water heaters are gas-powered models because they recover faster than electric models.

Get the information you need on how to Maintain a Water Heater for more information.

Dry-Fire Protection

Available for some electric water heaters, this feature keeps the upper element from burning out if the unit senses no water around it.

ENERGY STAR® Certification and High-Efficiency Ratings

ENERGY STAR® certified water heaters will display the trusted, government-backed symbol for energy efficiency. This rating helps consumers save money while protecting the environment through energy-efficient products and practices.



A high-efficiency water heater also saves money and helps the environment. Manufacturers indicate water-heating efficiency with an energy factor (EF) rating, and 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.

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 of performance expectations and estimated annual operating costs for the water heater model you’re considering.

Intuitive Technology

Water heaters with intuitive technology adjust temperature and other operating features according to your specific needs and use patterns. Benefits for choosing a heater equipped with this kind of responsive technology include better energy efficiency, increased durability and smarter performance.

A Premium Electronic Gas Valve

Because certain gas water heaters now feature an electronic gas valve. With fewer moving parts than a conventional mechanical gas valve, these water heaters yield more reliable and accurate performance for better temperature control and faster recovery of hot water. An LED indicator confirms the pilot is lit and provides diagnostic feedback on operating performance. This innovative valve is self-powered by a thermopile, which is a device that converts thermal energy into electrical energy. Since an external power source isn’t required, installation is hassle-free. These water heaters may give you troubleshooting codes when a problem is detected, making troubleshooting and repair easier.

Wi-Fi Water Heater Capabilities

A Wi-Fi module is now available in some electric water heaters that lets you control your water temperature remotely. You can customize your schedule to ensure hot water availability in your water heater tank only when you need it, saving you money on your energy bill. These units also send an alert if your tank is low on hot water.

There are many hot water tank accessories available to improve the safety and efficiency of your water heater.

How Do You Maintain a Water Heater?

Maintaining your water heater ensures optimal energy efficiency and gives you a chance to visually inspect components, helping you get a handle on small issues before they become big problems. This guide outlines the basic tasks required to maintain your hot water heater over time.

• Once or twice a year, visually inspect the water heater, looking for loose screws and connections and obvious signs of damage or leaks.
• Flush the tank at least annually to remove any sediment or buildup that may be lurking at the bottom of the tank, improving water quality.
• Ensure your temperature and pressure (T&P) valve is working properly.
• Inspect the sacrificial anode rod, and replace it if it’s deteriorated.

If you’re not a DIYer and need some help with performing regular water heater maintenance, call a local professional in your area.

What’s the Difference Between Residential and Commercial Water Heaters?

A residential water heater, whether with a tank or tankless, is meant to provide heated water on demand for activities like running a washing machine or filling a bathtub. Storage tank models usually hold up to 80 gallons and the recommended water temperature for residential units is 120 degrees Fahrenheit or below to prevent scalding and burns on users.

Commercial water heaters must provide a constant, steady supply of hot water for users. Businesses like restaurants, hotels, office buildings and apartments must have a ready reserve of hot water to keep things running smoothly. Unlike residential water heaters, manufacturers design commercial units for constant use. They’re larger, capable of storing 250 gallons or more, and have heavy-duty components to handle the rigors of high demand. Commercial water heaters also have a higher temperature setting to heat water for sanitary dishwashing and washing towels and bed linens. Most commercial units are gas-powered, with multiple inputs for large tanks.

What Size Water Heater Tank Does My Household Need?

Manufacturers classify storage tank water heaters by the amount of water they hold in gallons. To ensure that your household has enough hot water, it’s important to determine how much hot water you need on average. Unless you choose a tankless water heater, you’ll need a larger tank for a larger household.

Another consideration for a storage tank water heater is the recovery rate, or the number of gallons of water it can heat in an hour while refilling the tank. The greater your demand for hot water, the higher recovery rate you need. This means you also need to consider the number of fixtures or appliances your water heater must support simultaneously.

If you want to know what to look for in a water heater so it’s adequate for your household, use these recommendations as a guide. If you intend to use a tank-style model, use the guidance below to help you find the water heater size you need.

Minimum Gallon-Capacity Recommendations

Electric Water Heater

Family of 1 to 2: 30 gallons

Family of 2 to 3: 40 gallons

Family of 3 to 4: 50 gallons

Family of 5 or More: 80 gallons

Gas Water Heater

Family of 1 to 2: 30 gallons

Family of 2 to 4: 40 gallons

Family of 5 or More: 50 gallons

How Much Space Does a Tank Water Heater Need?

If your space can’t accommodate a standard-size water heater, there are alternatives. These options provide the same level of performance as a standard water heater and will work with electric, natural gas or propane systems.

Lowboy and Short Water Heater Space Requirements

These electric models are shorter and wider than a normal water heater. This size of water heater holds the same amount of water as its larger counterparts while fitting in areas with limited headroom, such as crawlspaces and under cabinets. Lowboy water heater sizes can vary between 30 and 49 inches in height and hold up to 50 gallons of water.

Tall Water Heater Space Requirements

Gas and electric tall water heaters have size ranges from 50 to 76 inches tall and can hold up to 100 gallons of water. They’re ideal for basements or garages where height isn’t an issue. If you choose a hybrid water heater, note that they require extra space to function properly, so be sure to check the manufacturer’s information for proper installation.