What Type of Water Heater Do I Need?

By Vernon Trollinger, April 4, 2017, Energy Efficiency, Green, Home Improvement

While most homeowners love their homes, not every home is perfect. There are usually one or two things the homeowner would like to change, such as an outdated bathtub for a new walk-in shower or updating the look of their kitchen. And then there’s occasional “uh-oh” of the unexpected repair. In our How to Shop for Home Improvement Projects series, we’re going to identify several projects and some of the ins and outs of what you can expect.

How to Shop for a Water Heater


What Type of Water Heater Do I Need? - How to Shop for Home Improvement Projects | Bounce Energy Blog
Water heating alone accounts for about 18% of a home’s total energy. For most Texas families, their water heater is a tank-style heater that keeps 40 to 50 gallons of water hot waiting for someone to use it. While that might seem convenient, tank-style water heaters waste a lot of energy. That’s because if you’re away at work for 10 hours a day, 5 days a week then your hot water heater is heating water for 50 hours/week while you’re not even home. That’s 2600 hours/year of keeping 40 to 50 gallons of water hot and ready for nobody. How much could it cost you? At 50 hours/week, an electric water heater equipped with the standard 3800 watt heating elements can use 9,880 kWh per year in stand by mode. At 10¢/kWh, that adds up to nearly $1,000 a year.

In 2015, the EIA found that most Texas homes used a medium (31 to 49 gallons) sized electric tank-style heater that was 5-9 years old. Depending on the water quality, most tank heaters will last about 10 to 12 years and then rust out and leak.

What Type of Water Heater Do I Need? - How to Shop for Home Improvement Projects | Bounce Energy Blog

In short, the longer you live in your home, the more likely you will need to replace your water heater. While it’s important to get the right sized water heater, there are now many different types of water heaters that it’s hard to figure out what’s the best kind of water heater for you. Some of the newest even come with WiFi. If you don’t know what to look for, shopping for a new one at your local home center can be confusing and frustrating.

So, let’s walk through what type of water heaters are out there and how they work so you’ll have a better handle on what you can expect from a new water heater.

Water Heater Types

New water heaters come with a listing showing the unit’s “Energy Factor” (EF) on a separate tag beside the yellow Energy Guide tag. This score is based on the ratio of hot water produced per amount of fuel (in Btu’s or therms for gas; kWh for electric) and takes into account how efficient heat is transferred to the water, losses from water cycling through the heater, and heat lost through stand by. The higher the EF number, the more efficient the water heater. Gas water heaters have energy factors between 0.5 to around 0.7 while electric models range from 0.75 to 0.95.

1) Fuel Choices: Gas vs Electric — Generally speaking, basic electric models make better use of energy mainly because electric water heater elements are in direct contact with the water. Basic gas water heaters, on the other hand, lose some of their heat because it exits as exhaust. That all said, while some heaters might rate well at maintaining water to a set temperature, they might be inefficient when it comes to heating cold water to that temperature. A 50-gallon standard electric tank water heater might have an EF rating of 0.86 to 0.95 but cost $370 to $410 per year to heat incoming cold water after everyone in the home has had their morning shower.

What Type of Water Heater Do I Need? - How to Shop for Home Improvement Projects | Bounce Energy Blog

2) Tank water heaters — A basic electric or natural gas tank water heater will keep water heated and waiting for you to use. Tank water heaters tend to be the cheapest with 40 to 50 gallon units costing $300 to $400 depending on the manufacturer. Remember though that their real expense is hidden in the amount of energy they use as standby heaters and their lifespan (an average of 10 years). Tank heaters also come in higher efficiency configurations that can give the homeowner more control over their hot water:

3) Condensing natural gas water heaters — transfer 98% of their heat to the water. Their exhaust fumes are so cool, they use a built in fan to blow them out the vent pipe. They have an EF rating around .9 but tend to cost 2-3 times more than a baseline gas heater.

4) Electric heat pump hybrid water heaters are around 4x more efficient than baseline electric water heaters. These use a heat pump to capture heat from the air (think reverse air conditioning) and use that to heat water in the tank. The heat pump sits on top of the tank and it cycles refrigerant through the water heater tank — only when it exhausts cold air (which can be vented out side or added to air conditioned air). Heat pump hybrids consume about 60 percent less energy than standard electric water heaters, making their energy savings quite attractive. However, their initial costs run 3 to 8 times that of a baseline electric heater. Fitting them into position also requires having extra room because they can be up to 7 feet tall. Since their optimal working climate is 40°F to 90°F, they might not be the best candidate for a Texas attic or garage installation.

5) On-demand or tankless systems save energy by avoiding having a tank and just heat water only when it’s being used or running through the pipe. By heating water only when it’s needed, gas tankless water heaters cut water heating expenses by 30% to 60%, enabling homeowners to save energy savings of 27%–50%. Apart from the reduced energy use, they also offer the perk of endless hot water. Tankless systems have an average lifespan of 20 years and depending on your water conditions, need to be back flushed at least once a year. Both electric and natural gas models are available. Cost, on the other hand, remains their highest challenge. Though prices have come down since they first became available in the US, tankless systems average $500 and up and models with higher flow rates fetch higher prices.

What Type of Water Heater Do I Need? - How to Shop for Home Improvement Projects | Bounce Energy Blog

To select the right one, you’ll need to know your water usage in gallons per minute (gpm) and find out the ground water temperature. The lower your groundwater temperature, the lower the gpm flow rate will be for your tankless system because it will take longer to raise the water temperature to 120°F. Because typical flow rates are from 2 to 5 gpm, tankless systems aren’t very good at supporting simultaneous calls for hot water from two different locations, such as a shower and a dishwasher.

6) Hybrid On-Demand — systems are becoming more common as a way to cover tankless system’s low flow rate. These tankless systems are usually fitted out with a buffer small tank (10 to 20 gallons). However, some models are available that include 40 to 50 gallon tanks (which, if you don’t use a lot of water in your home, this sort of wipes out the whole energy-efficient on-demand notion). Such hybrid systems do add to the installation cost but when they include a recirculation system to capture waste heat, they save even more energy.

7) Solar water heaters — Texas has plenty of sunshine to heat water for household use. Solar water heaters circulate antifreeze in a closed loop system to absorb heat from the sun in roof-top collectors and then transfer that heat to water. Heated water is kept ready for use in an insulated tank. A solar water heater has the highest initial costs, around $8,000 to $10,000 including installation. However, with zero fuel costs afterwards, the system can pay for itself in about ten years.

What Type of Water Heater Do I Need? - How to Shop for Home Improvement Projects | Bounce Energy Blog

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A native of Wyomissing Hills, PA, Vernon Trollinger studied writing and film at the University of Iowa, later earning his MA in writing there as well. Following a decade of digging in CRM archaeology, he now writes about green energy technology, home energy efficiency, DIY projects, the natural gas industry, and the electrical grid.

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