How to Choose a Water Heater: A Buying Guide

09 May.,2025

 

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.

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.

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