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Almost all homes and businesses need a water heater on-site. Use our guide to research the best water heater company for you. Technology continues to improve the energy efficiency of water heaters, and companies now create multiple types and models that last anywhere from 12 to 20 years. Consumers should do their research about which type of water heater will best suit their needs.

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What water heater features matter most?

Energy efficiency

As of April 16, 2015, all residential water heaters manufactured in the United States must meet increased National Appliance Energy Conservation Act (NAECA) energy-efficiency standards. The most notable change requires a higher Energy Factor (EF) rating. According to the Department of Energy, this will save approximately $63 billion in energy costs from 2015-2044.

  • British Thermal Units: BTUs measure the amount of gas or electricity used per hour to heat water. The higher the BTU, the quicker water is heated in the tank (recovery time). This is important when considering energy efficiency because the larger the tank, the more BTUs are required to heat it.
  • Energy factor: Energy Factor (EF) is a water heater’s overall efficiency. A higher EF means a more efficient unit and therefore more energy savings.
  • Self-cleaning: Some companies offer self-cleaning units, which remove the sediment and lime buildup from cold water. Self-cleaning units maintain their energy-efficiency longer resulting in lower operating costs.

Sizing and capacity

The first step when purchasing a water heater is determining the unit size. When determining tank size, consider things like family size, average shower length and the number of rooms per household. When selecting a size, storage capacity is important for tank water heaters and water flow rate is important for tankless water heaters.

  • Capacity: Measured in gallons, capacity is how much water your water heater stores. When looking at which tank capacity to buy, consider family size, the number of rooms per household and peak usage times. Most companies provide a broad range of tank capacities from under 30 gallons to over 100 gallons.
  • First hour rating: One factor that goes together with capacity sizing is First Hour Rating (FHR). This figure estimates how much hot water the water heater will produce during the first hour of use. It combines the heaters capacity in gallons with its recovery time.
  • Flow rate: For tankless systems, water flow rate, also known as gallons-per-minute (GPM), is used to determine the system size. To determine which flow rate you need for your tankless water heater, add up the GPM of each hot water device you expect to use at one time.

Venting options

If you are using a natural gas water heater, it needs to be properly vented. Each venting system must be sized properly depending on the total BTU input for the water heater. There are three types of venting systems: atmospheric, power-vent and direct-vent.

  • Atmospheric venting: Typically the most common type of venting system, atmospheric venting works like a chimney. It draws the flue gasses out of the unit through a vertical metal pipe which allows the gasses to be released into the atmosphere.
  • Direct venting: Direct-vent water heaters contain a sealed combustion chamber and use a horizontal flue pipe that connects to a wall leading outside. Direct venting is a quieter, more flexible venting option.
  • Power venting: A power venting system uses a fan to move flue gasses outdoors. These systems can be installed vertically or horizontally and far away from the unit allowing for flexibility in the installation process. Power venting is the most expensive venting option.

Operating cost

With updated NAECA regulations, almost all water heaters on the market are more energy efficient and cheaper to operate than they used to be. Operating cost is calculated differently depending on the type of unit you have. You can find a cost calculator on the Department of Energy’s (DOE) website, however, most water heaters have the annual operating cost on them.

  • Gas: According to the DOE, a gas water heater’s annual operating cost is determined by taking 365 x 41045/ EF x Fuel Cost (BTU).
  • Electric: Before calculating the annual operating cost of an electric water heater you will need to know the unit cost of electricity and convert it to kilowatts per hour.  You can find the annual operating cost of electric and heat pump water heaters by taking 365 x 12.03 kWh per day / EF x cost of electricity (kWh).
  • Gas vs. electric: Generally gas water heaters are less efficient but the higher cost of electricity makes electric water heaters more expensive to operate.


One thing to consider when purchasing a water heater is the life cycle of the unit. Some people wait until their old unit fails, however with today’s energy-efficient models, replacing an old, inefficient water heater before it fails can pay for a new unit in just a few years.

  • Storage tank water heaters: Tank water heaters typically have a lifespan of 10-15 years. Factors such as water quality, maintenance schedule and unit design can contribute to a longer or shorter life of each unit.
  • Tankless water heaters: Most tankless water heaters have a lifespan of 20 years. They have easily replaceable parts, which can contribute to a longer lifespan.
  • Prolonging lifecycle: Regular maintenance can help prolong the lifespan of a tank water heater. Test the pressure release valve to make sure it opens properly. Drain the tank to flush out sediments that have settled to the bottom. Sediment buildup can cause leaks and diminished capacity.


Companies are increasingly developing technologies to improve the quality and efficiency of their water heaters. Most companies can get funding through the DOE to work on energy-efficient advancements in water heater design.

  • Glass-lined tanks: Glass-lined tanks are designed to help protect steel from the corrosive effects of water. Since the implementation of glass-lined tanks, there have many advancements and redesigns to make them even better.
  • Controllable units: Some newer water heaters have control panels that allow you to adjust settings based on current needs. A low-temperature setting for people going on vacation is just one example of how being able to control your water heater can save on energy.
  • Hybrid units: Hybrid water heaters are part heat pump, part storage tank water heater. Per the DOE, they use around 62 percent less energy than a standard 50-gallon electric water heater.

What are different types of water heaters?


Gas water heaters are typically less expensive to operate than electric water heaters because they burn natural gas to heat the water. They tend to cost more upfront, but they make up the cost difference in energy savings within a year. Gas water heaters have a quicker recovery time, about 50-gallons per hour compared to around 14-gallons per hour of an electric water heater. They need to be properly ventilated, allowing exhaust to escape. They can be priced anywhere from $300-$1500 and come in high-efficiency models as well.


Electric water heaters have a lower price upfront when compared with gas water heaters. There is no need for ventilation with electric water heaters making the cost of installation less expensive. Typically, electric water heaters are similar to gas water heaters in efficiency; however, the cost of electricity makes their operating cost higher. The price of an electric water heater varies, ranging from $300-$2,000.


Tankless water heaters work by heating water directly, providing instantaneous and unlimited hot water. This lowers energy costs because you do not pay to keep unused water hot in a storage tank. Tankless systems tend to use more BTUs than high-efficiency tank units when heating water instantaneously. Starting around $1,000, tankless water heaters will cost more than a storage tank water heater up front but they have an estimated lifespan of up to 20 years as opposed to the 10-15 year lifespan of a storage tank system.

Heat pump hybrid

Heat pump hybrid water heaters work by using electricity to pull heat from surrounding air and dumping it, at a higher temperature, into a tank to heat water. They can be two to three times more efficient than a typical electric water heater. If you live in a warmer climate, you can install an air-source heat pump system that draws heat from outside air. Hybrid heat pump water heaters start around $1,000.

Who buys water heaters?


The size of water heater you purchase will depend, in large part, on the size of your family. The more family members living under the same roof, the larger the capacity of water heater it will take to provide enough hot water for your home.

Business owners and property managers

Most water heater companies manufacture units for commercial use. Whether you are a property manager needing multiple units for an apartment complex or a restaurant owner needing a hot water system to meet the demands of a full-scale kitchen, there are many options available.

Individual homeowner

If you are an individual homeowner, a smaller capacity water heater should be efficient enough to meet your hot water demands. Less water usage will require a smaller recovery time for your unit, saving on energy costs.

Energy conscious people

For consumers who are more energy conscious, there are many energy-efficient and cost-effective water heater options available. It is important to check for energy star ratings on tank models as well as hybrid and tankless water heaters. These ratings will include a breakdown of figures such as Energy Factor and annual operating cost.

Water heater FAQ

What is the average cost to replace a hot water heater?
Replacing your water heater costs anywhere between $500 and $5,000. This price depends on the type of water heater, the size of the unit and the cost of installation. For instance:
  • The average cost to install an electric-powered, 40-gallon tank-style unit in a two-to-four person home is $750.
  • A tankless unit costs roughly $2,000.
  • Gas heaters cost $50 to $100 more than electric units.

Other costs include permits, retrofitting and enhancements.

What is the downside of a tankless water heater?
Tankless water heaters have a few downsides:
  • Sometimes, tankless units can’t supply enough hot water for simultaneous uses, such as taking long, hot showers while the washing machine is running.
  • Unless equipped with modulating temperature controls, tankless units may not heat water to a constant temperature in parts of a home with varying water pressure.
  • Tankless electric units require a relatively high power draw, meaning service upgrades may be necessary.
  • Tankless electric units also require outdoor venting, either directly or with a conventional exhaust flue.
Is a high-efficiency water heater worth it?
Yes, it is a good idea to investigate high-efficiency water heaters.
  • High-efficiency water heaters have longer life spans than conventional heaters.
  • While upfront costs are high, they last for a long time. Depending on the type, most last at least 10 years and some last up to 20.
  • The units do more with fuel in less time, meaning they use less energy.
  • Tankless models use less water, which reduces water bills.
  • Units qualify for tax rebates, allowing you to reclaim part of your initial purchase price.
  • Tankless water heaters typically require less maintenance.
Are new electric water heaters more efficient?
Newer electric water heaters are far more efficient because of federal regulations that require them to adhere to strict energy efficiency standards. Generally speaking, the larger the tank, the more efficiency is required. Units holding 55 gallons or more achieve efficiency through an electric heat pump. While pricer than nonheat-pump models, electric-powered heat pump units are the most efficient water heaters on the market today.
How long do hybrid water heaters last?
A hybrid water heater’s life span is typically between 13 to 15 years, but it can be even longer. Experts recommend proper maintenance to extend the life of a system.
  • Regularly clean the air filter.
  • Check the temperature pressure relief valve annually to ensure it's operating properly.
  • Discharge water from the tank monthly to prevent hard water deposits from accumulating.
  • Have the unit inspected by a professional at least once a year.
How many years does a hot water heater last?
A traditional tank-type water heater lasts an average of eight to 12 years, while a tankless unit can last up to 20 years or longer. Hard water wreaks havoc on any system and can reduce its service life by two or more years. Likewise, water heaters located anywhere temperatures drop significantly tend to wear out quicker because they have to work harder to heat the water.
Are water heaters safe?
Yes, but a water heater can cause significant damage and be a severe hazard if not properly maintained.
  • If you have a gas-powered unit and the burner doesn’t shut off, excess gas can build up in your home, and a single spark can damage or destroy the house.
  • Faulty gas heaters can also potentially release carbon monoxide into the home.
  • Leaks, if left unattended, can burst and flood your floor, damaging furniture, appliances, electronics, drywall and other building materials.

Not sure how to choose?

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    Author reviews for water heaters

    A. O. Smith Water Heaters

    Sold exclusively by plumbing wholesalers and plumbing contractors, A. O. Smith offers a broad range of residential and commercial water heaters, boilers and storage tanks. They have delivered hot water solutions to consumers for over 70 years.

    Read more about A. O. Smith Water Heaters
    Kenmore Water Heater

    For over 100 years, Kenmore has been a leader in home appliances. They offer a broad range of water heaters and water heater parts and accessories.

    Read more about Kenmore Water Heater
    Reliance Water Heaters

    Operating as a sub-brand of A. O. Smith, Reliance offers a wide variety of water heater sizes and capacities. Consumers can find high- efficiency, gas, electric, tankless and commercial water heaters.

    Read more about Reliance Water Heaters
    GE Water Heaters

    GE is known for offering kitchen, laundry and other home appliances for over 125 years. They have since added high-efficiency water heaters in with the various water products they manufacture.

    Read more about GE Water Heaters
    American Water Heater

    Headquartered in Johnson City, Tenn., American Water Heaters develops water heaters for the residential and commercial markets. Among their various Energy Star rated water heaters they offer solar electric systems that provide up to 70 percent of water heating energy from the sun.

    Read more about American Water Heater
    Whirlpool Water Heaters

    Along with manufacturing and selling numerous home appliances, Whirlpool offers a list of residential electric, natural gas and liquid propane water heaters. Each unit comes with an energy factor (EF) rating ranging from 0.80 to 2.0.

    Read more about Whirlpool Water Heaters
    Rheem Water Heaters

    Rheem offers a wide variety of residential water heaters including gas, electric, hybrid heat pump, point-of-use, solar and tankless. Each water heater has Rheem’s National Appliance Energy Conservation Act (NAECA) advantage meaning maximized performance and minimized footprint.

    Read more about Rheem Water Heaters
    Bradford White

    Bradford White manufactures a wide range of residential, commercial and volume water heaters. They provide energy efficient units to customers with varying needs, including wholesalers, contractors, home builders and homeowners.

    Read more about Bradford White
    Ecosmart Water Heater

    EcoSmart provides tankless water heaters for homes and businesses that can save consumers up to 50 percent on their water heating bill. They also offer pool and spa heaters as well as radiant heating units which heat your home from the ground up.

    Read more about Ecosmart Water Heater
    Rinnai Water Heater

    Rinnai offers tankless and hybrid tank-tankless water heaters. Their tankless water heaters give consumers the option to customize installation and efficiency and choose venting options.

    • Types: Rinnai has two styles of tankless water heaters: Ultra series and Luxury/Value series. The Ultra series is available in five sizes ranging from 130,000-199,000 BTUs. The Luxury/Value series is available in three sizes ranging from 120,000-180,000 BTU. Rinnai also offers a hybrid tank-tankless water heater.
    • Hybrid tank-tankless: Rinnai’s hybrid tank-tankless water heater works by pairing a tankless system with a 40-gallon storage tank. When hot water is being used, heated water leaves the top of the tank. Cold water enters and is directed to the bottom of the tank. The unit senses the cold water and pumps it through heating components in the tankless unit which, in turn, pumps the newly heated water to the top of the tank.
    • Venting options: Rinnai’s new models of their Ultra series tankless water heaters offer flexible venting options. By using one concentric vent or two PVC/CPVC pipes, the dual venting design allows for flexibility for installers and dealers.
    • Recirculation solutions: Recirculation allows for fast hot water. Rinnai has three recirculation solutions: Pump and timer kit, 24-hour digital controller/ pump and a circ-logic pump. The pump and timer allows consumers to schedule recirculation times and the circ-logic pump allows for shorter or longer recirculation intervals to be set.
    • DOE standards: The Department of Energy’s newest regulation requiring higher EF ratings has already been met by Rinnai’s current production line of tankless water heaters. Rinnai’s compact design for tankless water heaters allows their tankless systems to fit where larger, upgraded tank systems will not.
    State Water Heaters

    Headquartered in Ashland City, Tenn., State Water Heaters produces over 500 water heater products for residential and commercial use. They continually develop new technologies to extend product life.

    • Types: State offers a line of self-cleaning gas and electric water heaters with capacities ranging from 6-98 gallons. They offer tankless water heaters with a range of 120,000-380,000 BTU and hybrid heat-pump electric water heaters in three capacities of 50, 66 and 80-gallons. State also manufactures a line of commercial water heaters that includes gas, electric, solar and tankless units.
    • Manufactured housing water heater: State designed a water heater solely for manufactured housing called the Scout. This unit complies with the Housing of Urban Development (HUD) guidelines for manufactured housing installations. The Scout comes with a standard vent or direct vent, is gas control convertible for natural or propane gas and comes with a flammable vapor ignition resistant design.
    • Tankless rack systems: Used mostly for commercial purposes, State offers tankless rack systems for mounting multiple tankless water heater. The consumer can choose from a wall mount, freestanding or back-to-back rack systems. Each rack can link up to 20 tankless water heaters.
    • Sizing guide: State provides consumers with an online sizing guide to make sure they are purchasing the correct water heater size for their needs. For commercial sizing, State uses StateSize, an online water heater sizing and product selection software.
    • Mobile app: The State Water Heaters app helps consumers find the correct water heater from their mobile device. The app has a water heater selector, warranty check and a cross-reference lookup where consumers can put in their current brand and model number and it will show the closest State model.