From Showers to Savings: Choosing the Right Water Heater for Your Home

Choosing the right type of water heater can lower your energy bills while fulfilling all of your home’s hot water needs.

The best water heater ensures a steady hot water supply for all household needs without energy waste or cold spells. Catherine Falls Commercial/Getty Images

There’s nothing like a hot shower to start the day right or a steaming bath at the end of a long week. The home’s water heater is the unsung hero that makes possible those showers, baths, and all the home’s other hot water needs.

Homeowners can choose between three main types of water heaters, each with its pros and cons. The traditional tank system features a 30- to 100-gallon storage tank that reheats the water once it drops below a set temperature so it’s always ready. Tankless (on-demand) systems use a heat exchanger to quickly heat the water to the desired temperature. There is often a slight heat-up time, particularly for faucets that are farther from the unit, but then the supply is unlimited. And, lastly, there are point-of-use units. These are small tankless units that heat water near-instantaneously, as they are located next to a specific fixture, with their small size allowing them to be installed under a kitchen sink or just about anywhere.

Energy and Size

Tank water heaters use more energy, even when hot water is not in use, as they are constantly keeping the supply hot. This allows them to avoid the “cold water sandwich” of the tankless style, which occurs when a faucet is turned off for a minute. The water near the heater remains hot, then there’s a short period of cold water, then it gets warm again as newly heated water arrives.

Most tank setups are relatively well-insulated. To buff things up further, consider a water heater insulating blanket kit to further mitigate heat loss. Some utility companies offer blankets at low cost or offer a rebate, so it’s worth checking. Tank-style heaters can be large—up to 5 feet tall and two or more feet wide. Newer tanks are larger because of federal energy regulations, so be sure to measure carefully.

Tankless heaters save money by not storing the water, so there’s no standby energy loss. However, they do use more energy per minute when actually heating water, so in a household with a huge water demand, they may end up costing as much as a tank-style system—however, this can be offset by the endless supply. They also free up floor space; a whole-house heater can be less than two feet by two feet in size.

Tankless systems heat water on demand, saving space and reducing standby energy loss compared with conventional tanks. Emagnetic/Shutterstock

Cost and Installation

Tank-style water heaters can cost up to 50 percent less than a comparable tankless model. This is offset by a tank having an average lifespan of 10 to 12 years because of water storage issues, with tankless models lasting up to 20 years with proper maintenance.

Replacing a tank-style water heater with another is pretty straightforward and can be a DIY task, particularly for an electric model. For natural gas or propane gas, be honest about your DIY skill sets. If in doubt, go with a pro. This is also an opportunity to switch to an electric model, which will simplify future replacements considerably. These scenarios are true for a tankless style as well, if the home already has one.

Traditional tank water heaters maintain a steady reservoir of hot water. n.tati.m/Shutterstock

Where the big cost comes in is replacing a tank system with a tankless heater, as this will probably require a bit of replumbing to accommodate a wall-mounted tankless. It potentially might need rewiring as well, particularly for a whole-house electric model that may require two 220 service lines. A home electrical service upgrade may be needed. Or, if the neighborhood utilities allow it, consider plumbing for gas, which tends to be cheaper to operate.

Point of Use

A small-capacity point-of-use tankless water heater may seem like an indulgence, but it could actually pay for itself over time, particularly when there is a long run of pipes from the water heater to the faucet that necessitates running (wasting) a lot of water until the warm water is dispensed. This smaller system can help reduce the monthly water bill, as well as reduce energy consumption of the main unit.

Many modern models offer precise temperature controls and energy monitoring for greater efficiency and comfort. Santiparp Wattanaporn/Shutterstock

Maintenance and Repairs

Tank-style systems need an annual service, which can be performed by the homeowner or by a professional.

Start by turning off the power, shutting off the cold-water supply, and allowing the water to cool. Place a bucket under the discharge pipe or TPR (temperature and pressure relief) valve, lift the valve, and then stop the water flow to confirm that it is working properly. If it’s not, replace it. Next, find the sacrificial anode that protects the tank from the corrosive particulates in city water. It’s underneath the top plate. Unscrew it with a socket. If it’s coated with calcium or reduced to half an inch or less in thickness, replace it.

Now it’s time to flush the tank. Connect a garden hose to the drain valve, and drain into buckets or directly outdoors until empty, keeping in mind that the water may be very hot. Add more water to agitate any remaining sediment. Do this until the water runs clear, then close the system back up. Getting inconsistently hot water? It could be a failing thermostat or heating element. Refer to the instruction manual.

When a tank system puts out rusty water (potential corrosion in the tank or pipes), has visible corrosion, is leaking, is producing a significantly reduced hot water supply, or is more than 15 years old, it may simply be time to replace it.

The home's water heater quietly ensures hot showers, clean dishes, and warm baths on a daily basis. ThomsonD/Shutterstock

Tankless Is Easier

Tankless systems can also benefit from an annual flushing. Flush kits are available at most home improvement stores or online. The DIY option goes one step further with two hoses, a 5-gallon bucket with a lid, and a 1/8 HP to 1/2 HP submersible utility pump. This is also the time to run a descaling solution through the unit if in a hard water area. Detailed instructional videos from manufacturers and professionals can be found online.

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Sized Just Right

Water heater size matters. Too big? Large energy bills. Too small? Occasional cold water. Here are the basics.

Tank-Style

The rule of thumb is 30 to 40 gallons for 2 people, 40 to 50 gallons for three family members, 50 to 75 for four, and 75 to 100 gallons for a household of five or more. Also, keep in mind any space restrictions on tank size.

Tankless Thoughts

On-demand systems are rated by GPH (gallons per hour) and must also take into account groundwater temperature (how cold the water is that it has to heat). Most manufacturers will offer a chart showing geographic location and how many showerheads or faucets can be running at the same time.

Other Factors

Want to take other factors into account, such as everyone showering at the same time? The Department of Energy has a comprehensive guide to getting the perfect system at Energy.gov/EnergySaver/Sizing-New-Water-Heater.