How to Choose a Water Heater

Choosing a new water heater is one of the most impactful home appliance decisions you can make. The right choice affects your comfort, energy bills, and maintenance costs for the next 10-20 years. This guide walks you through every factor to consider so you can make the best decision for your household.

Step 1: Choose the Fuel Type

The first decision is fuel type - and it is largely determined by what is already available in your home.

If you have a gas line, a gas water heater will almost always cost less to operate. If you do not, electric is the practical choice - and a heat pump or tankless electric unit can close much of the efficiency gap.

Step 2: Choose the Type

Tank Water Heater

The traditional choice. Stores a large volume of hot water ready for use. Lower upfront cost, simpler installation, but higher operating cost due to standby heat loss.

Best for: Budget-conscious buyers, homes with existing tank infrastructure, households with predictable hot water usage patterns.

Tankless Water Heater

Heats water on demand as it flows through the unit. No standby heat loss, longer lifespan (20+ years), endless hot water. Higher upfront cost and may require electrical or gas line upgrades.

Best for: Households that want lower long-term operating costs, homes with space constraints, households that frequently run out of hot water.

Rheem 18kW Tankless Electric Water Heater - no tank, no standby heat loss, endless hot water on demand.

Ranein Natural Gas Tankless Water Heater - 8.5 GPM, 190,000 BTU, whole-home hot water at the lowest operating cost.

Heat Pump Water Heater

Uses electricity to move heat from the surrounding air into the water rather than generating heat directly. Up to 70% more efficient than a standard electric tank. Requires adequate space and ambient air temperature above 40 degrees F.

Best for: Homes in mild to warm climates with a large utility room or garage, households looking to minimize electricity costs.

Step 3: Choose the Right Size

Tank Water Heaters

Tankless Water Heaters

For tankless units, size is measured in gallons per minute (GPM) - the flow rate the unit can heat simultaneously. Add up the flow rates of all fixtures you might use at the same time:

• Shower: 1.5-2.5 GPM
• Kitchen faucet: 1.0-1.5 GPM
• Dishwasher: 1.0-1.5 GPM
• Washing machine: 1.5-2.0 GPM

A household running two showers simultaneously needs at least 3-5 GPM capacity.

Step 4: Check the Energy Factor

The Energy Factor (EF) or Uniform Energy Factor (UEF) measures how efficiently a water heater converts energy into hot water. Higher is better.

Look for ENERGY STAR certified models for the best efficiency.

Step 5: Consider the Warranty

Longer warranties indicate higher quality tanks and components. When comparing models at similar price points, choose the one with the longer tank warranty.

• Budget models: 6-year tank warranty
• Mid-range models: 9-year tank warranty
• Premium models: 10-12 year tank warranty

Step 6: Factor in Installation Requirements

• Tankless electric: May require a dedicated 240V circuit upgrade - check your electrical panel capacity
• Tankless gas: May require a larger gas line and new venting
• Heat pump: Needs at least 1,000 cubic feet of surrounding air space and temperatures above 40 degrees F
• Tank replacement: Usually straightforward if replacing like-for-like

Total Cost of Ownership Comparison

Quick Decision Guide

Recommended Products