Choosing a Water Heater

The first step in choosing a water heater is to determine the appropriate fuel type. Natural gas, oil, and propane water heaters are generally less expensive to operate than electric models. If you are considering electricity, check with your local utility company or electricity supplier to see if they offer off-peak electricity rates. If available, heating your water during off-peak hours will save you money.

Types of Water Heaters

Selection Criteria

When selecting the best type and model of water heater for your home, consider the following:

  • Fuel type, availability and cost. The fuel type or energy source you use for water heating will not only affect the water heater’s annual operation costs but also its size and energy efficiency. See below for more on selecting fuel types.
  • Size. To provide your household with enough hot water and to maximize efficiency, you need a properly sized water heater. Visit the pages on different types of water heaters (linked above) for more on sizing.
  • Energy efficiency. To maximize your energy and cost savings, you want to know how energy efficient a water heater is before you purchase it. Visit the pages on different types of water heaters (linked above) for more on estimating energy efficiency.
  • Costs. Before you purchase a water heater, it’s also a good idea to estimate its annual operating costs and compare those costs with other less or more energy-efficient models. Visit the pages on different types of water heaters (linked above) for more on estimating costs.

Also be sure to do what you can to reduce your hot water use. You may also want to explore other strategies such as drain-water heat recovery to save money on your water heating bill.

Comparing Fuel Costs And Water Heater Types

If you have more than one fuel type available in your area, it’s a good idea to compare fuel costs, especially if you’re building a new home. Even if you’re replacing a water heater, you may find that you’ll save more money in the long run if you use a different fuel or energy source. Contact your utility for current fuel costs or rates.

The type of water heater you choose will also affect your water heating costs. One type of water heater may use a fuel type more efficiently than another type of water heater. For example, an electric heat pump water heater typically is more energy-efficient than an electric conventional storage water heater. Also, an electric heat pump water heater might have lower energy costs because of its higher efficiency than a gas-fired conventional storage water heater, even though local natural gas costs might be lower than the electricity rates.

U.S. Department of Energy – Energy Efficiency and Renewable Energy