How to Choose a Water Heater that's Best for You

how to choose a water heater

Hint, like every other major appliance, you gotta do your homework first

For most folks, hot water heaters tend fall under the "if it ain't broke, don't worry about it" category.

Unfortunately, that's not a good idea. Although standard gas and electric water heaters might have a lifespan between 8 and 15 years, that's a broad and rather unhelpful range. Plus, there are many factors that conspire to shorten the life of a typical tank water heater.

Three common ones are:

  • Lack of annual maintenance. It should be drained, flushed, and cleaned at least once a year.
  • Lots of use. A tank's heating system is not designed to run constantly. If this is happening, the tank capacity may be too small for your needs.
  • Hard water. Lime scale buildup coats the heating elements and the inside of the tank, reducing efficiency, among other things.

And because a hot water tank doesn't come with a visible lifespan countdown, Home Depot suggests you look for the following hints of impending doom:

  • Leaks around the heater's base, water corrosion along the sides, or at the TPR (Temperature Pressure Relief) valve at the top.
  • Knocking noises. These are caused by sediment buildup.
  • Rusty water or water with a metallic taste. These are a clear indicator something bad is happening inside the tank. It could be as straightforward as replacing the sacrificial anode rod or it could be the worst-case scenario of the tank itself starting to rust.
  • Cloudy water. This is probably an indication of sediment buildup.
  • Cold water. This means that a heating element is probably broken, or in a gas hot water tank, either the pilot has gone out or something more serious has happened.

Regardless, if you've moved into a place and you don’t know how old the water heater is, or the water heater is over ten years old, it's time to seriously think about replacing it before a catastrophic failure. This gives you the time you need to do research, save, and not be stampeded into making a decision that may haunt you for years down the road.

Figuring out a water heater's age

Now, you might be asking, "How old is my water heater? Is there a way to figure it out? I don't want to jump the gun on this."

Probably. But it's going to require some sleuthing on your part. Tank labels may include an obvious manufacturing date. Or perhaps a helpful installer wrote the installation date using a marker on the side of the tank.

No luck? You must turn to serial numbers. Usually embedded within them are manufacturing date codes, but they are not easy to decipher. Here are two websites you should reference, as opposed to me trying to explain it here.

  1. Hot Water Solutions will get you started.
  2. Water Heater Hub is more comprehensive. Since a single manufacturer may make more than one name brand, this site groups together brand names with parents.

Or you can also call in a plumber and get his or her expert opinion on just how long a useful life your water heater has left.

Advantages of choosing a high efficiency water heater

It is no surprise that energy and utility costs are rising. What may be a surprise, though, is just how much water you use and how that equates to dollars spent.

In fact, according to this infographic, water heating can cost a big chunk of change each year.
how to buy a water heater


And with rising costs, it is only going to get worse.

So, it makes a lot of sense (and cents) to find the most efficient water heater you can afford.

But, where to start?

The types of water heaters

Once upon a time, the choice was easy—tank style. Then you'd choose the fuel source and capacity, based primarily on what was there before. Efficiency was the furthest thing from anyone's mind. 

Today, there are several hot water heater types you need to explore. The most widely used are:

  1. Conventional storage tank
  2. Tankless or on-demand
  3. Heat pump, also known as hybrid
  4. Solar
  5. Tankless coil and indirect water heaters

We're going to focus on the first three as they are the most common. We'll provide links toward the end for the other two options.

Beyond the kind of water heater type, you also need to decide on the fuel source.

  • Tank style can be powered by electricity, natural gas, propane, and heating fuel oil
  • Tankless options are electricity, natural gas, and propane
  • Heat pumps can run on electricity, geothermal energy, and natural gas
  • Solar uses a completely different fuel source—the sun
  • Tankless coil and indirect can run on electricity, natural gas, propane, and heating fuel oil

Most people go with the kind of fuel source that is already there. If you change from gas to electric and there's not a 220-volt outlet in sight, you will need to get that installed.

Remember, anything electric powered will not operate during a power failure. So, keep that in mind if that's a concern.

And what about capacity?

There are several ratings on water heater ENERGY GUIDE labels that didn't use to be there. All come into play when determining capacity, and ultimately, which water heater you choose. And most use abbreviations.

The abbreviations you need to know

A key one is FHR or first hour rating. This simply means how many gallons of hot water you need during your peak hour of usage. For many people, it's when everyone is getting ready in the morning (hence the name), but your household may have a different schedule.

Also, FHR is measured with a 135° outlet temperature under EF measurements and 125° outlet temperature under UEF conditions. What are those? Keep reading.

EF means Energy Factor. Its latest iteration is called UEF or Uniform Energy Factor. With either term, the unit is ranked for how efficiently it turns energy into hot water. Generally, electric water heaters are between 0.75 and 0.95, while natural gas or propane ones are typically between 0.5 and 0.7.

But energy factor ratings don't consider the actual cost of the fuel. So, if natural gas or propane is cheaper in your area than electricity, the better value over the long run will be gas.

By the way, water heaters with an ENERGY STAR certification meet the high end of efficiency metrics. They use less energy than standard models, saving you money on your utility bills while helping protect the environment.

GPM means gallons per minute. This is especially important when it comes to tankless systems. The higher the number, the more hot water the unit can throughput all at once.

And Recovery Rate is an important number for tank style heaters. That's the number of gallons it can heat in an hour while the tank is refilling. If you use a lot of hot water for several consecutive hours, you'll want a higher recovery rate.

Figuring out FHR and GPM

Understanding how much water your household uses at peak demand is critical.

If you underestimate this number, your water tank will be woefully undersized, and will provide lukewarm or cold water instead of hot. It might also wear out too quickly, trying to keep up with demand.

Overestimating means you're wasting energy heating and, in a tank style, storing more water than you really need.

So how do you determine your FHR?

The worksheet below is found on the website. It's a great place to start and uses common averages for each water source.

How to buy a hot water heater

*Estimates are based on averages from a variety of information published on websites. Some water heater manufacturer websites also provide calculators based on the duration for the use case and other factors.
Alternatively, This Old House provides some base estimates on fixture flow rates you may find handy:
  • Bath or kitchen faucet: 1.5–2.2 GPM
  • Dishwasher: 1–2.5 GPM
  • Showerhead: 1.25–2.5 GPM
  • Tub filler faucet: 4 GPM
  • Washing machine: 1.5–3 GPM

Lowe's also has some estimates:

  • Bath or kitchen faucet: 2.5 GPM
  • Dishwasher: .5 to 1.5 GPM
  • Shower: 2.5 GPM
  • Tub: 4 GPM
  • Washing machine: 1 to 2.5 GPM

And Consumer Reports offers this easy guide that's relevant to tank-style heaters:


how to buy a hot water heater

Courtesy Consumer Reports

If you would prefer to be more accurate in your GPM numbers to determine a more precise FHR, use the handy calculator found here. Turn on each hot water source with the typical hot/cold mix you would use. Then time how long it takes, in seconds, to fill a 1-gallon container. Fill in the seconds and hit calculate.

Or, if you're okay with basic math, take the seconds you measured and multiply by 60. That is the gallons per minute.

If all this math is giving you a headache and you know you want a tank style, Home Depot offers this advice:

  • 2 or fewer people: 23 to 36 gallons
  • 2 to 4 people: 36 to 46 gallons
  • 3 to 5 people: 46 to 56 gallons
  • 6 or more: 56+

Updated efficiency standards mean you must measure your space

Thanks to new standards and codes in play, today's tanks are larger than older ones of the same capacity. That's because, per Consumer Reports, water heaters under 55 gallons have a 4% boost in efficiency while those over 55 gallons are 25 to 50% more efficient, depending on the technology. 

Bear in mind your FHR number too. You may not need as large of a tank as your current one, meaning a new, smaller capacity tank might well fit in your existing space.

But if your FHR indicates you need a tank that's bigger than your space, you might consider going tankless.

Picking a hot water tank

You now know your space limitations, your FHR and GPM, and you've decided on your fuel source—electricity, natural gas, propane, or heating fuel oil.

So, you're ready to do comparison shopping. Here are some other features to consider:

  • Warranty. Longer warranty ones tend to have larger elements or burners and have thicker insulation to help prevent heat loss.
  • Anti-scale device. Some tanks swirl the water at the bottom of the tank in an effort reduce scale buildup. However, it might be cheaper to add a separate inline filter and choose a tank with a longer warranty.
  • The material of the drain valve. This is where a garden hose is attached to drain the heater. Brass ones are more durable than plastic.
  • Glass-lined or stainless-steel tanks reduce interior corrosion that rusts out typical metal tanks.
  • Insulation. It can be foam or fiberglass. It should be at least R-16 for gas or oil-fired tanks, R-22 or higher for electric.
  • Digital displays. These can help monitor levels and customize operation.
  • ENERGY STAR certification. These are more expensive to purchase but will save you money over time.
  • AI technology. This studies your hot water usage and adapts accordingly.
  • Premium electronic gas valve. This has fewer moving parts than typical mechanical ones for better temperature control and faster hot water recovery.
  • Wi-Fi module. Some electric heaters can accept these. It allows you to control your water remotely. This lets you dial down temps for when you're not there and boost them in advance for when you will be home. It will also alert you via app if you are low on hot water.

Tankless hot water heaters

Also known as on demand hot water heaters, this style of hot water heater has been gaining in popularity in the US since it was introduced in the 1990s.

Here's a handy comparison chart between tank-style and tankless water heaters.

how to buy a hot water tank


Tankless designs can also:

  • Heat water to the desired temperature in 5 to 15 seconds
  • Deliver a constant supply of hot water
  • Be more energy efficient since there's no water-filled tank that must be kept hot, if sized properly

Sounds like a no-brainer, right?

Not so fast. There's more to consider.

We'll look at the overall pros and cons in the next section. But be aware that they do have GPM flow limits. So, if you have a very large household, you might need two units. For example, typical tankless units have a GPM of 2 to 5 gallons per minute. And they may not meet your FHR number. provides a suggestion when it comes to GPM and tankless units. "In general, a 1- or 2-bath home needs around 5 GPM. A large 3- or 4-bath home would need a 10 GPM unit."

But there's more to this than GPM.

Not only are FHR and GPM numbers critical to choosing the right size, so is a third one— Temperature Rise. It is the difference between the incoming water temperature and the desired output temperature. Since tankless water heaters heat water on the fly, the colder the incoming water, the more energy is required.

Temperature rise can be calculated using averages for groundwater as shown below from this map from

how to choose a water heater

Or you can use a thermometer and measure the water temperature coming out of your cold-water tap.

So, if your incoming cold water is 67° and you want to heat it to 125° (the UEF standard), your temperature rise is 58. Most homes shoot for 115° to 120° to avoid scalding and to save energy.

Here in Oklahoma, tap temperatures can vary wildly, depending on the time of year. Since most people use more hot water in cold months, it's probably best to figure Temperature Rise based on winter tap-water temperatures. That way you'll know your unit is sized for the worst.

Once you are armed with these three critical measurements—FHR, GPM, and Temperature Rise—you're ready to start reading labels to determine what size you need. There is no one-size-fits-all when it comes to tankless. Because there are so many variables in play here, don't hesitate to consult your favorite plumber.

By the way, a tankless hot water heater is NOT a DIY installation.

Tankless Pros and Cons

According to

  • For homes that use 41 gallons or less of hot water daily, on demand water heaters can be 24%–34% more energy efficient than conventional storage tank water ones.
  • They can be 8%–14% more energy efficient for homes that use a lot of hot water—around 86 gallons per day.
  • You can even install a small, point-of-use one at each hot water tap in areas that typically struggle such as hot tubs, washer, dishwasher, and remote bathrooms, or as a backup to a solar water heating system.
  • Initial cost will be higher than a tank style water heater (some sources indicate up to 3x when installation is included). But they will last longer and have lower operating and energy costs which can offset the higher purchase price.
  • They have easily replaceable parts that can extend life even further, unlike tank-style ones which aren't easily serviceable.
  • Some gas units need a larger, 3/4 in. gas line instead of the standard 1/2 in. ones, requiring additional plumbing and installation costs.
  • Gas-fired ones tend to have higher flow rates than electric ones. But if they have a pilot light, that's wasted energy that might or might not be offset by other pluses. Other ignition options include direct ignition (electrical or batteries) and hydro power which uses the cold-water inflow to turn a turbine which ignites the burner.
  • Gas-fired ones also need venting. So, you'll need to choose between condensing and non-condensing styles. Non-condensing (less expensive to buy) ventilates exhaust gas out the top of the heater which requires special, and more expensive stainless-steel venting. Condensing ones use an additional heat exchanger to loop exhaust back into the system to heat water more efficiently. Those require less-expensive PVC vent pipes.
  • If the hot water flow is very low due to scale buildup in pipes, dripping faucets, or clogs in faucets or showerheads, the unit may automatically shut off. If you're trying to keep pipes from freezing in cold weather and choose to drip faucets, this can be a problem. So be sure to ask questions.

Additional advantages include:

  • They take up less space than tank ones
  • They are less prone to leaks and creating water damage
  • There's no tank that can explode

In terms of additional features to look for (which may or may not be available depending on the fuel source):

  • A recirculation pump is helpful if the water run is longer than 50 ft. It reduces waiting time to get hot water at the tap by pushing the cold water that's been sitting in the pipes back through the heater.
  • Smart units can be adjusted for temperature and water usage via an app as well as indicate if there's a problem with the unit—and where.
  • Outdoor models are available, freeing up more inside space. But you'll have to protect it from freezing during very cold weather.
  • An easy-to-empty screen filter that traps dirt particles to prevent them from entering the heater.
  • Warranties can vary; the longer the better.

And if you have a choice between installing an electric one or a gas one, know that gas units typically have twice the life of electric ones, but electric ones are more efficient and cheaper to install.

Tankless maintenance

Tankless heaters require yearly maintenance. Skip this and you'll severely shorten the water heater's lifespan, defeating one of the primary reasons for getting one in the first place.

Probably the biggest threat to tankless heaters is hard water scale. If you live in an area with hard water (120 mg/L or more—you can buy a test kit at a home improvement store or online), you need to reduce limescale buildup. This is also true of tank-style heaters.

You can install either a whole house water softener (preferably a salt-less style if you are getting an electric tankless heater) or an inline filter cartridge that's designed to inhibit scale. Put a shutoff valve on each side of the cartridge for ease of replacement. Although vinegar can be added to the yearly flush to deal with scale, that works better for non-hard-water areas. If you have hard water and choose to skip treating the water, you'll need to do a flush at least twice a year with vinegar.

Sediment is a big issue too. If your tankless heater doesn't already have a screen filter, you should consider adding a sediment filter. This is especially true if you are on well water.

Heat pump/hybrid water heaters

A heat pump water heater is a tank style with the tankless attribute of heating up only on demand. They are typically two to three times as efficient as a regular tank style. They use a heat pump as a supplemental heating energy. But they are taller and require more room to function properly.

According to, heat pump water heaters:

  • Are better suited to basements than living spaces
  • Complement but do not replace dehumidifiers because they operate on hot water demand instead of humidity levels
  • Must have their condensate plumbed to a sink or drain
  • Should be installed in rooms at least 10 ft. x 10 ft. and with temperatures above 35°F
  • Need to be installed with recommended clearances from walls and ceilings for adequate air circulation
  • To minimize heat loss, the first few feet of incoming and outgoing pipe should be insulated
  • Can be as noisy as a window air conditioner
  • Their air filters must be rinsed regularly

ENERGY STAR also has thoughts about savings and the number of payback years for electric heat pump water heaters. So be sure to check it out.

What about solar and tankless coil/indirect water heaters?

These are a bit too complex for us to cover within the scope of this blog. So, for more information about solar water heaters, read this helpful page from as well as this one from

And for tankless coil and indirect water heaters, check out this page from

Are tax credits or rebates available on a new hot water tank?

Yes, usually so. But you need hunt for them, and they tend to change or expire every year. lists what ENERGY STAR equipment tax credits are available for primary residences. There are conditions:

  • This must be used for your primary residence (you live here most of the time).
  • It cannot be used for a new home or a rental.
  • Electric heat pump water heaters qualify for the home improvement tax credit only if they have a Uniform Energy Factor of at least 2.2.
  • Natural gas, oil or propane hot water heaters must have a Uniform Energy Factor of at least 0.82 or thermal efficiency of at least 90%.
  • You must have a copy of the Manufacturer's Certification Statement to qualify.

There is also a rebate and special offers finder on the ENERGY STAR website. Simply plug in your zip code and then choose the product type to see what's currently available.

For state incentives, go to the US map located hereJust click on your state's shape.

And don't forget to check with your city and your local utility companies!

If you need help searching for the most efficient products, check out this site. You can research gas- and electric-fueled water heaters.

And for an overall review of water heating, visit

What other ways, beyond a new energy efficient hot water heater, can I save money on my water heating bills?

Here's an infographic from with some great tips:

how to buy a water water heater

If you install lower-flow faucets and shower heads AFTER you figure out FHR and GPM, you'll need to recalculate those numbers.

Installing your new hot water heater

So, be proactive about replacing your hot water heater. I was. That way I could plan and save for the replacement, rather than having to scramble in reaction to a catastrophic failure.

However, it's almost time for me to start shopping for a replacement. The gas hot water tank sits in the garage, snugly sharing cabinet space with my heat and air main unit. I'm torn between staying with a tank or going tankless. I'm pretty sure the allotted space will be too small to get another tank of the same capacity. Depending on what my research yields for FHR, UEF, GPM, and Temperature Rise, I'll make the final decision between a smaller capacity tank or a gas-fired tankless one. I am concerned about that auto low-flow cutoff associated with tankless systems. It would create all kinds of problems in super-cold weather when I must have both hot- and cold-water faucets drip. So, I'll need to do more research there too.

Hot water heater installs are best done by a pro. However, if you know you'll need a 1.5 ft. or 2 ft. long braided stainless steel water heater connector hose or a 4 ft. universal gas line connector kit for 1/2 in. lines to get the installation done, Certified Appliance Accessories has you covered. You can always buy them in advance for your plumber to use. You can purchase Certified Appliance Accessories online at Lowe's, Walmart, Amazon, and other ecommerce sites.

Once your new heater is installed, don't forget to put any manuals in your household appliance notebook. And most importantly, take a marker and write the installation date on the outside of the tank. Plus, write the FHR, GPM, and—if you went tankless—the Temperature Rise. Years down the line, you or the new owner of your home will be glad you did.

Disclaimer: This article is for informational and educational purposes only. Certified Appliance Accessories is not liable or responsible for any damages resulting from or related to your use of this information.