A water heater is one of those home appliances that you don't think about until it stops working. However, a water heater can be a major energy eater, whether you're buying one for a new home or replacing your decades-old water heater. According to the US Department of Energy, water heating is the second-largest energy expense for most homes, accounting for nearly a fifth of all of your home's energy usage in a month -- which is why we put together this water heater buying guide.
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Finding the water heater model you want in your home is not a decision you should take lightly. Water heaters will last anywhere from 10 to 20 years typically, depending on the type, which means you'll live with your choice -- and its expenses -- for up to two decades. You want that price tag to be as small as possible while getting the hot water you expect.
You'll have to wade into the deep end and sort through the different types of water heaters, fuel sources, capacities, costs over time and additional features. While it may seem overwhelming at first, we're here to help you decide which water heater is right for you and your home.
If you're new to the water heater market, you might not even realize there are different types to choose from. While storage water heaters remain the most common, there are a variety of water heater types, each with their own unique set of features and functions.
"Storage water heaters, also called tank water heaters or traditional water heaters, use electricity or gas for heating water," said Kelly Russum, owner of KC's 23 ½ Hour Plumbing and Air Conditioning in Palm Springs, California. The storage water heater is the most common type of water heater for both residential and commercial buildings. It consists of a tank that holds a certain amount of water, typically ranging from 20 to 80 gallons. The tank is insulated to help retain heat and keep the water warm until it is needed.
A storage water heater heats water using an electric heating element or a gas burner located at the bottom of the tank. As cold water enters the tank through a supply pipe, hot water rises to the top of the tank where it's distributed to the rest of the house when a faucet or appliance calls for hot water.
Storage water heaters are relatively affordable, are simple to install and can supply hot water to multiple fixtures simultaneously.
"Storage water heaters can offer between 20 to 80 gallons of water right away, which makes them an excellent solution for big families of four or six," Russum said.
However, they are energy inefficient and prone to lose heat from the tank even when hot water is not being used. Regular maintenance, such as flushing the tank to remove sediment buildup, keeps them as efficient as possible and prolongs their lifespan.
A tankless water heater, sometimes called an on-demand or instantaneous water heater, doesn't use a storage tank and heats water only when it is needed, providing a continuous supply of hot water on demand. When a hot water tap is turned on, cold water travels through a pipe into the unit, where it is heated, typically by a gas burner or an electric element. The heated water then flows out of the unit and to the desired fixture or appliance.
One major advantage of tankless water heaters is their energy efficiency. Since they only heat water as needed, there is no standby heat loss, resulting in potential energy savings over storage water heaters. Additionally, tankless heaters have a longer lifespan than storage heaters, often lasting 20 years or more with proper maintenance.
"While they don't have a tank for storing water, they still need to be flushed from time to time to remove scaling and prevent breakdowns," Russum said.
Tankless water heaters have higher upfront costs than storage heaters and may require upgrades to gas lines or electrical systems during installation. They also have limited flow rates, which means the temperature of the water may fluctuate if multiple hot water sources are used simultaneously in a larger household.
A heat pump water heater is an increasingly popular alternative to traditional water heaters that moves heat from the surrounding air to the water being heated. It uses a compressor and refrigerant system to transfer heat from the air to the water in the tank where the heated water is stored for later use. It's the same principle that heat pumps use to heat or cool the air in your home.
One of the main advantages of heat pump water heaters is their high energy efficiency. By extracting heat from the air or ground rather than generating heat directly, these water heaters can produce hot water using significantly less energy than conventional options, resulting in lower utility bills.
Heat pump water heater adoption will likely rise over the next several years, as this type of water heater is the best fit to match new energy efficiency regulations enacted by the US Department of Energy.
"Heat pump water heaters are more costly to buy and install than other models," Russum said. "Their higher upfront cost pays off through lower electricity bills, though." Heat pump water heaters can also act as a dehumidifier and provide air conditioning in warmer climates.
Heat pump water heaters may not be suitable for all climates or installation locations. Because they require adequate space and ventilation to operate efficiently, they may struggle in colder climates or poorly ventilated areas. The compressor and fan can also be noisy during operation.
"Homeowners with a heat pump water need to remember about such maintenance tasks as cleaning the air filter regularly, checking the area around the unit to ensure adequate airflow and periodically checking the condensate drain to ensure it is not blocked," Russum said.
A solar water heater is similar to a storage water heater, except it uses solar energy to heat water instead of gas or electricity. A typical solar water heater will have solar collectors that absorb sunlight and convert it into heat and a storage tank to hold the heated water. There are two main types of solar water heaters: active systems, which use pumps to circulate water through the collectors and into the storage tank; and passive systems, which rely on natural convection to circulate water.
Solar water heaters are environmentally friendly and don't require burning fossil fuels to generate heat, though they can have a backup heating system that relies on electricity or gas. While solar water heaters are typically considerably more expensive up front, "operational costs of solar water heaters are lower compared to storage and tankless water heaters," Russum said. Expect lower energy bills and a smaller carbon footprint from a solar water heater. The cost model mirrors that of residential solar panel systems -- these are a true investment that will save you more money, but it's going to take some time.
While solar water heaters tend to operate efficiently, performance may vary depending on location, climate and available sunlight. Maintenance and repair costs may also be a consideration. "If you have a solar water heater, remember to clean collector panels and remove sediment buildup in a tank," Russum said.
There are two primary fuel types for water heating: electricity and natural gas, which is made primarily from the fossil fuel methane. Electric water heaters are generally easier to install, have lower upfront costs and don't require venting, which makes them versatile and functional for most homes. Depending on how the electricity they run on is made, they can be cleaner options than gas heaters. However, they tend to cost more to operate and have slower recovery rates than gas heaters. Gas water heaters, while more expensive and in need of ventilation, are often faster at heating water and can be more cost-effective in areas with affordable natural gas.
Solar water heating uses solar energy to heat water, reducing energy costs and carbon emissions. Though upfront costs are higher, solar heaters have minimal operating expenses. You may find other fuels for water heating like propane, oil and biomass, but these are typically less available than gas or electricity.
Perhaps the most important factor when it comes to picking a water heater is water capacity. "The first thing to take into account when choosing a water heater for your home is your needs," Russum said. "Regardless of the type, by choosing a water heater of the right size, you ensure smooth, energy-efficient operation."
If the tank capacity is too small for your hot water demands, you may find yourself running out of hot water. Conversely, too large of a tank will have you heating more water than you need, leading to higher operating costs. As a general rule, you should consider 10 to 15 gallons per person in your home.
"Small households will benefit from tankless water heaters, larger families will benefit from storage, solar, or heat pump water heaters," Russum said. For tank-based heaters, he recommends paying attention to the first hour rating, which is an estimate of how many gallons of hot water the heater can supply within an hour. For tankless heaters, look at gallons-per-minute ratings, a measure of "how many gallons of hot water the heater can deliver in a minute," he said.
Regular maintenance -- like flushing the tank and checking for corrosion and leaks -- is key both to energy efficiency and to extending the life of your appliance. "Both traditional storage water heaters and solar water heaters require regular descaling," Russum said. "The harder the water in your region, the more often you need to drain and flush a tank to prevent damage from scaling. A general recommendation is once every year."
These are tasks that you can typically do on your own. But if there are more serious issues that need to be addressed, you may want to tap a professional. If you need to replace anode rods or relief valves, for example, you're best to call in a technician to ensure it is done right. If you see signs of leaks or corrosion, you may also want a second opinion from an expert before taking action.
Costs vary with water heaters depending on the type you choose, but the upfront cost is almost always going to be the largest one that you incur. Storage water heaters are typically cheapest, costing as little as $350, according to HomeAdvisor. Solar, by contrast, can cost up to $5,500 for a standard size home.
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Over time, storage heaters tend to be more expensive because the reservoir can experience more maintenance cost, from sediment buildup and corrosion to tank leaks. Tankless heaters will typically have lower maintenance costs. "Homeowners choosing a storage or a tankless water heater should also keep in mind that electric water heaters tend to have higher operational costs than water heaters that use gas," Russum said. Solar heaters have the lowest operating costs over time, but can require more upkeep.
When choosing a water heater, there are a few more features to consider beyond the basic functionality of heating water. Smart features, such as Wi-Fi connectivity and mobile app integration, allows you to monitor and adjust settings remotely, track energy usage and receive alerts for maintenance issues or potential leaks.
One of the key factors to know when buying a water heater is its efficiency rating. Choosing an energy-efficient model not only reduces your environmental impact, but also results in lower operating costs.
Water heater efficiency is typically measured and labelled using various rating systems. Here are the most common:
Check for ENERGY STAR certification when you buy a water heater. The blue star logo signifies that the unit meets strict energy-efficient guidelines set by Natural Resources Canada’s Office of Energy Efficiency. ENERGY STAR-rated models are designed to reduce energy consumption and, consequently, your energy bills.
The Energy Factor is another key measurement of a water heater’s efficiency. This ratio is calculated based on standby losses (heat loss from the tank) and recovery efficiency. The higher the rating, the better!
The UEF is a more recent rating system and offers a more accurate representation of a water heater’s efficiency. It considers standby losses, cycling losses, and the efficiency of heating the water. Like the EF, a higher UEF signifies a more efficient water heater.
While energy-efficient models tend to have higher upfront costs, the long-term savings and reduced environmental impact make them a wise investment!
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The question of what to know when buying a water heater also extends to installation and maintenance.
Many homeowners opt for professional installation over DIY, especially if they lack experience with plumbing and electrical work. Hiring a qualified technician ensures that your water heater is installed correctly, complies with local building codes, and is covered by warranty. Professionals can also provide advice on the best location for the water heater based on safety and efficiency considerations.
Here’s what you can expect from professional water heater installation at LG Home Comfort:
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When you buy a water heater you want it to last—which is why being proactive is key.
This may include flushing the tank to remove sediment, checking and replacing anode rods (for tank storage water heaters), and inspecting for leaks and signs of corrosion.
Regularly check for gas leaks for gas water heaters and electrical connections for electric models. Ensure that safety devices like temperature and pressure relief valves are functioning correctly.
An annual professional inspection is necessary. A technician can identify potential issues early and perform maintenance tasks that are difficult to do as a homeowner.
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The costs associated with buying a water heater can be divided into upfront costs and operating costs as well as long-term savings.
The initial cost of a water heater varies depending on the type and model you choose. For example, a conventional storage tank water heater can cost between $600 to $2,000. This model’s affordability makes it a go-to choice for most homeowners. On the other hand, buying a tankless hot water heater can cost up to $4,000 due to increased labour costs and advanced technology used in its production.
Some areas may require permits for water heater installation, which can add to the upfront cost. Always check with your local building department for permit requirements and associated fees.
The ongoing costs of operating a water heater are a significant consideration. Different fuel types have varying costs per unit, and electricity rates can vary by region. Consider the fuel or energy source’s cost and the unit’s efficiency to estimate your operating expenses.
The rule of thumb for buying a water heater is weighing the upfront costs against what you’ll save over time.
As an example, let’s say you bought a $4,000 tankless water heater. While the upfront cost may be higher than its competitors, this type of water heater will save save you more money in the long run because of its higher energy efficiency.
Tankless water heaters don’t produce standby energy losses and have lower operating costs. Its average lifespan sits at 20 years, whereas tank water heaters average around 15 years. When it comes to regular maintenance, tankless water heaters are equipped with easily replaceable and affordable parts, so costly repairs are less likely to happen.
Ultimately, the choice is yours. What matters is that you understand that costs exist not only when you buy a water heater, but as time goes on, too. Buying a water heater that’s high-quality and energy efficient can provide longer service life and reduce the frequency of repairs or replacements.
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Upgrade your home’s comfort and efficiency by buying a water heater that aligns with your family’s needs and budget! Whether you’re looking to save on energy costs, reduce your carbon footprint, or ensure a reliable hot water supply, the experts at LG Home Comfort are here to help.
We’re a Canadian, family-owned business that specializes in full-service tankless and tank water heater solutions. Starting with a free in-home assessment, we’ll determine the best water heater for your family’s unique needs. For your convenience, we also carry an extensive collection of ENERGY STAR-certified water heaters for you to choose from, saving you time and money by eliminating unnecessary research.
From there, our team of licensed HVAC technicians will expertly install, repair, and maintain your unit for years to come. Your comfort is our top priority, which is why we offer 24/7/365 water heater solutions to all of our clients.