How to Choose the Right Water Heater For Your Home

Whether you’re planning to replace an older water heater with the same type or exploring other options to upgrade its efficiency or capacity, there are many factors to consider. Buying the right appliance requires more than taking into account your home’s hot water usage and the utilities available. You’ll also want to keep in mind household size and any potential future changes to it that will affect water usage during the water heater’s life span.

This guide will help you determine which water heater to choose to meet the needs of your home to balance comfort, energy efficiency, and utility costs.

Start by Determining Your Household's Hot Water Needs

The most important factor to consider when buying a new water heater is your household’s hot water needs, which dictates the capacity you’ll need. Start by asking yourself these three questions:

How many people live in your home? Larger households need higher-capacity storage tanks for traditional water heaters. If you’re in the market for a tankless unit, these “on-demand” water heaters may not be able to supply water for multiple showers at one time.
What is your peak hot water usage? Total daily usage may seem more important, but in fact, peak demand matters more when it comes to your household’s comfort.

Standard showerheads have an output of about 2.5 gallons per minute on average, according to the EPA. In homes without adequate storage capacity during busy morning shower times, a person taking a long, hot shower may use up all the hot water in the storage tank, leaving those who follow with only lukewarm or cold water until the hot water supply can be replenished.

Homeowners with large soaking tubs will need to take into account the gallons of water needed to fill a tub to provide adequate hot water for bathing. Also consider how often you’ll need to simultaneously run multiple appliances that use hot water, like washing machines and dishwashers.
What are your household’s future needs?
A water heater with a smaller capacity may suit your family’s needs now, but if you’re planning to have children or move in aging parents down the road, you’ll want to ensure the water tank has enough capacity to accommodate those new members.

Dreaming of a home addition? If your plans include additional bathrooms, kitchens, or water-intensive new appliances, consider any water usage increases now to avoid having to upgrade your water heater later, adding an unexpected expense to your remodel.

Understanding Water Heater Types

With a clearer picture of how much hot water your household needs now and in the future, you can compare water heater types to determine which will meet your projected usage while maximizing energy efficiency and operating with existing utilities that service your home.

Water Heater Comparison Chart
	Operation	Applications	Costs	Energy Efficiency	Fuel Type
Traditional Storage Tank	Holds water and keeps it hot, refills and reheats when depleted	Larger households with higher peak hot water demands; multiple hot water appliances	Less expensive to install, more expensive to operate	Less energy efficient than tankless or hybrid heat pump	Natural gas, electricity, propane, oil
Tankless	Heats water on demand	Smaller households with lower peak hot water demands; homes where multiple fixtures don’t require hot water simultaneously	More expensive to install, generally less expensive to operate	Generally more energy efficient than traditional storage tanks	Natural gas, electricity, propane
Hybrid Heat Pump	Heat pump draws warmth and moisture from the ambient air and converts it to heat for heating water. Electric backup system kicks in when heat pump can’t meet demand. Doubles as dehumidifier.	Homes with ambient air temperature between 40 and 90°F	More expensive to install and purchase	Most energy efficient	Electricity
Point-of-Use	Small tankless or storage tank options available	Home additions, detached garages, workshops, RVs	Depends on fuel type and water heater type	Can make an existing system more energy efficient by reducing heat loss from heater to fixture	Electricity, propane

Traditional Tank Water Heaters

Traditional storage tank water heaters are the most common residential type. As the name suggests, these water heaters store a set amount of water in an insulated tank and keep it hot continuously so that hot water is ready when needed. Storage tank models are available in a range of capacities, from 30 to 50 gallons on average for most residential applications.

These traditional tank heaters cost less up front to purchase and install but are generally a little less energy efficient and therefore more expensive to run over time than tankless models. Traditional tank water heaters are best for households with consistent daily hot water usage.

Our pick for a great traditional tank water heater to suit most households is the Reliance 50 Gal. Tall Electric Water Heater.

Tankless Water Heaters

For homes that require a water heater with a smaller footprint, a tankless water heater may be a better option than a large traditional storage tank water heater. Tankless models heat water on demand only when hot water is turned on to provide a continuous supply of hot water.

Tankless heaters are typically slightly more energy efficient than traditional tank models because they eliminate standby heat loss, but sizing them correctly takes some planning.

To buy a tankless heater with the right capacity for your household, calculate the gallons per minute of your fixtures (showerheads, faucets, etc.) and appliances based on the number you’ll expect to run simultaneously.

Smaller households, homeowners who want to maximize energy savings, or homes with less installation space may benefit from a tankless unit.

Looking for a tankless water heater for a condo or townhome in a warmer climate? If your incoming water temperature is consistently 60 to 70°F, check out the EcoSMART Single Phase Tankless Electric Water Heater.

Heat Pump Water Heaters

Heat pump water heaters, also called hybrid heat pump water heaters, capture heat from the ambient air and transfer it to the water stored in its tank. That’s why they work best in areas where the surrounding temperature remains above 40ºF year-round, so in colder climates, installing them in a basement near a warm furnace is ideal.

According to the US Department of Energy, water heating makes up 13% on average of Americans’ annual energy bills. Among the most energy efficient of water heaters, heat pump hybrid models can reduce water heating energy use by as much as 75% compared with standard electric water heaters.

Installation and the initial purchase price are higher than standard water heaters, but heat pump hybrid models generally cost less to operate and double as dehumidifiers as they remove heat and moisture from the surrounding air, ideal for damp basements.

However, they require adequate air space and create condensation, so they will need a condensate drain or a pump.

If the potential energy savings of a hybrid water heater appeals to you, we recommend the Reliance 80 Gal. Tall Smart Electric Heat Pump Hybrid Water Heater.

Point-of-Use Water Heaters

These small water heaters store a few gallons of hot water and are ideal solutions for home additions or other areas that are too far from the main water heater to efficiently heat and deliver hot water.

Rather than extending your home’s plumbing, point-of-use water heaters can provide hot water quickly to a single sink, bathroom, or appliance, reducing wait times and minimizing heat loss that occurs as water travels through long plumbing runs.

If an additional, small water heater would conveniently extend your home’s hot water access, we like the Stiebel Eltron 6 Gal. Point-of-Use Electric Water Heater.

Selecting the Right Fuel Source

If your home is already serviced by both gas and electric utilities, you have more options for water heater fuel sources.

Electric Water Heaters

Electric water heaters are generally the easiest to install, as most homes are already on the electrical grid, and they don’t require gas lines or vents to operate safely. Water heaters fueled by electricity also generally cost less to purchase to install than many gas models. However, larger households with higher hot water demand may find that water reheating for traditional storage tank heaters takes longer.

Shop all electric water heaters at Do it Best for a wide range of water heater types that meet your household’s hot water needs.

Gas Water Heaters

For medium to larger households with high hot water needs, gas water heaters may deliver the best hot water experience. Gas heaters tend to heat water faster so that depleted storage tanks can quickly refill and heat during times of peak usage.

In areas where natural gas is more affordable, gas water heaters often cost less to operate than their electric counterparts. However, vents and an existing natural gas connection are required.

Shop all gas water heaters to find the right capacity for your home.

Hybrid Water Heaters

Heat pump hybrid water heaters combine a traditional electric heating element with heat pump technology, so they can automatically switch to electric resistance heating during periods of unusually high demand. These dual-system water heaters use considerably less electricity than standard electric water heaters, lowering operating costs while providing reliable hot water.

For the most energy efficiency potential, shop all hybrid water heaters.

Propane Water Heaters

For rural homes without natural gas connections and where electricity may be unreliable, propane water heaters offer an alternative. Like their natural gas counterparts, propane heaters have relatively fast recovery rates to refill storage tanks and replenish hot water quickly. Unlike natural gas or electric models, propane water heaters require regular replacement of propane tanks to operate continuously.

For rural year-round residences or vacation homes, we recommend the Reliance 30 Gal. Tall Standard Vent Liquid Propane Water Heater.

Choosing the Right Water Heater Size

Water heater size is directly related to your household’s projected peak water usage. Once you’ve determined which type of water heater you need, calculate peak water usage using the tips below to help you size your water heater correctly.

Tank Water Heater Sizing

Storage tank water heaters use a straightforward measure called first hour rating, or FHR, which determines how many gallons of hot water the appliance can deliver during the hour of highest usage. You can find this number on the product’s ENERGY STAR label.

Keeping FHR in mind when choosing a water heater will help prevent unwanted cold showers or laundry cycles before the tank can refill and heat, but a more straightforward place to start is water tank size.

Use these tank capacity guidelines as a starting point for sizing based on the number of members in your household. But keep in mind water usage may be affected by other factors and that households with large soaking tubs, multiple bathrooms, or frequent simultaneous hot water use may benefit from sizing up.

Household Size	Tank Capacity (in gallons)
1–2 people	30–40
2–3 people	40–50
3–4 people	40–50
5+ people	60–80

Tankless Water Heater Sizing

Unlike storage tank water heaters, tankless units use a measure of gallons per minute (GPM), which measures how much hot water the unit can produce continuously. To calculate GPM for a tankless water heater model, add the projected flow rate of fixtures that may be used simultaneously, such as showerheads, dishwashers, and washing machines.

While GPM is a useful measure to help you size a tankless heater, keep in mind that an undersized unit may struggle to maintain water temperature when multiple fixtures are drawing hot water at the same time.

Energy Efficiency

When choosing a water heater, you may find that shopping for an energy-efficient model requires a trade-off. Units that cost less to run over the life of the appliance may be more expensive to purchase and install up front.

Gas storage tank units tend to be the least energy efficient, but because they are the least expensive to install with an existing gas hookup, they remain a popular choice, especially in areas where natural gas is less expensive.

Hybrid models offer the most cost savings over the life of the unit, provided the heat pump is utilized more than the electric system. Electric tankless models tend to be more energy efficient than storage tank types, depending on usage. For the most energy efficient water heater, look for ENERGY STAR certified models.

We recommend the Reliance 66 Gal. Tall Smart Electric Heat Pump Hybrid Water Heater for the most energy efficiency under the right ambient conditions.

Maintenance

Replacing a heating element in a water heater damaged by scale and limescale

To improve energy efficiency, extend the life of the water heater, and reduce the risk of unexpected unit failure, remember to schedule regular maintenance for your water heater. The type and frequency of maintenance depends on the type of water heater you choose.

Traditional storage tank heaters:

Flush annually.
Anode rod should be inspected and replaced periodically to protect the tank from corrosion.

Tankless water heaters:

Descale regularly, especially if you have hard water.

Heat pump water heaters:

Clean air filters occasionally

Installation Requirements to Think About Before Purchasing

Some homeowners have plenty of options to consider when buying a new water heater, but others may be limited by the available space to install, utility service, and venting and drainage possibilities.

To avoid costly mistakes, try these tips:

Check your space: Measure the available installation space to ensure the new water heater will fit properly. Keep in mind that hybrid heat pump units are taller than traditional storage tank models, so be sure to check ceiling heights, especially if you live in an older home. They also require additional surrounding air space and drainage to operate.
Venting, electricity, and plumbing:
- Gas water heaters need proper venting and access to a natural gas supply.
- Electric and heat pump models need the correct electrical service, and some may require dedicated circuits.
- Assess whether your existing plumbing connections match the new unit.
Replacing vs. upgrading: Replacing a water heater with the same type is often simpler than switching fuel sources or from storage tank to tankless.
DIY vs. professional installation: To comply with building codes and warranty requirements, professional installation is recommended for most water heaters.

Choosing the Right Water Heater Today

The right water heater depends on the size of your household and your family’s hot water usage, the fuel sources available at your residence, the space you have available to install it, and your budget.

To get expert help before purchasing, visit a local Do it Best store, or shop water heaters online today and take advantage of home delivery or same-day pickup.

How to Choose the Right Water Heater For Your Home

Start by Determining Your Household's Hot Water Needs