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Water Heater Buyer’s Guide | Water Heater Pros & Cons

by Daniel Estevao on July 7, 2017

Water Heater Buyer's GuideDon’t wait until your water heater springs a leak and floods your basement. If your water heater is over 10 years old, seriously consider replacement options.

New models are much more energy efficient, saving your household hundreds of dollars per year in energy bills. In addition to reducing your environmental footprint and saving you money, you also won’t have to worry about a corroding water tank.

Modern water heaters have extra insulation and new glass liners to increase energy efficiency and reduce corrosion.

You’ll pay $700 to $1,500 to purchase and install a new conventional storage unit, but the energy savings over its lifetime can potentially offset the entire cost.

Tankless, heat pump, and solar water heaters offer more energy savings, but they cost more money to buy and install. Sometimes, the savings don’t pay for the extra cost of purchase and installation.

Use this water heater buyer’s guide to compare the different water heater options available to you, including how to size a storage water heater.

Water Heater Options – Pros & Cons

Solar Water Heaters

Solar water heating systems use energy from the sun to generate hot water. The two types of solar water heaters are: active (uses circulating pumps) and passive (does not use circulating pumps). Active solar water heating systems are typically more energy efficient than passive water heating systems, but they are also more expensive to purchase and install.

Pro: They have a long lifespan (around 20 years), and are 50% more efficient than gas and electric. Federal tax credits and other incentives are available for solar water heaters.

Con: Unfortunately, solar water heating systems nearly always require a backup system for days without much sunshine. Purchase and installation are significantly more expensive and complicated. You will need to evaluate your home’s solar abilities, choose the correct system size and type, as well as follow all local codes and regulations.

Heat Pump Water Heaters

Heat pump water heaters move heat rather than generating it. Think of a refrigerator working in reverse. The heat pump pulls heat from the surrounding to heat the water in a tank.

Pro: Since heat pump water heaters move heat rather than generating it, they are usually 2-3 times more energy efficient than gas or electric water heaters. You will end up saving hundreds of extra dollars on electric costs.

Con: Efficiency goes up, but so does purchase and installation costs. Heat pump water heaters are also dependent on location, installation expertise, and can increase the demand on your HVAC system.

The lower operating costs can offset the higher upfront costs, but sometimes it doesn’t. Consult a certified contractor for more information.

Tankless Water Heaters

Tankless water heaters heat the water directly, without the need for a large storage tank.

Pro: Tankless water heaters are significantly smaller, have longer lifespans (20+ years compared with 10-15 years for storage water heaters), and are cheaper to run, saving you around $70-$80 per year in energy costs. Additionally, there is no limit to the amount of hot water you use and no risk of damaging water leaks.

Con: Tankless water heaters offer large savings and extra convenience, but they also tend to cost around 3-5 times as much to buy and install. Think carefully about the upfront costs and payback. The lag factor is another thing to consider—it takes a few minutes for the water to heat up to the desired temperature.

Tank Water Heaters

Traditional water heaters have a ready supply of hot water in a storage tank. A tank storage water heater gets its name because it heats and stores 30-50 gallons of water, guaranteeing immediate hot water delivery throughout your home.

There are two different kinds of tank options: gas and electric. Natural gas tank water heaters use 50% less energy than their electric brother. They will cost more than electric to install, but they are much more green.

Storage water heaters heat water – around 20 to 80 gallons – in a tank for ready availability. If you need a lot of hot water in a short period of time, you will require a larger tank.

When a faucet or appliance demands hot water, the storage water heater releases hot water from the top of the tank using an electric element or gas burner. Cold water enters from the bottom of the tank to be heated for future use.

Pro: Storage water heaters are cheaper to purchase and install.

Con: Since water is constantly heated in the tank, storage water heaters have significant standby heat loss. You can reduce standby heat loss and annual operating costs by scheduling regular water heater maintenance and wrapping your water heater in an insulation blanket.

Fuel Type

Most storage water heaters use natural gas to heat the water, however, other systems utilize propane, fuel oil, and electricity (including heat pump units).

Available in many areas of the United States to fuel conventional storage and demand (tankless or instantaneous) water heaters, as well as combination water and space heating systems, which include tankless coil and indirect water heaters.

How to Calculate Water Heater Size

Do you ever fight with the members of your household over the hot water. In order to make sure that you have enough hot water for everyone, it’s important to calculate the size of your water heater replacement.

To calculate the properly size water heater, you need to determine your household’s peak hour demand:

  • The average person uses around 12 gallons of hot water to shower.
  • In order to calculate the amount of hot water used during the peak hour of use, count the number of people who take a shower within the same hour. So, if you have 3 people taking a shower in the morning, you will need a water heater with at least 36 gallons of water (12 gallons x 3 people).

After calculating your household’s peak-hour hot water heater demand, you can correctly size your water heater. We recommend choosing a water heater that has a little more than you need. For instance, if your peak hour demand is 36 gallons, consider installing a 40-gallon or higher water heater tank.

Water Heater Buying Considerations

Water heaters are the 2nd largest energy expense in the home (heating/cooling is #1). If you want to protect the environment and save money, ENERGY STAR qualified water heaters are a great choice for performance, lifespan, and energy savings.

Check the age of your water heater. If it is older than 10 years, now is the time to upgrade.

When shopping for a new water heater, look for Energy-Star qualified units. In addition to purchase cost, you want to consider installation, maintenance, and operating costs. A high-efficiency model that meets Energy Star standards saves up to 20% in energy costs.

Use this energy cost calculator from the EPA to help calculate the lifetime energy cost savings of your new water heater.

When choosing a contractor to install your new water heater, confirm their licensing, bonding, and insurance, and make sure all costs are outlined before work begins.

There may be additional building codes that need to be adhered to, including venting systems, supply pipes, and water heater mounts. Ask for a detailed cost summary before any agreements are made.

Also, learn different ways you can reduce water heater costs.


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For over 30 years, Pacific Air Systems has been proudly serving the Puget Sound region: Federal Way, Graham, Spanaway, University Place, Steilacoom, Sumner, Lakewood, Puyallup, Tacoma and Gig Harbor.

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