Different types of water heaters
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Tank water heaters
Size isn't everything
Bigger isn't always better, and water heater tanks are no exception - you don't want to pay for more than you need.
Start by estimating how much hot water your family uses, and when they use it.
Then look for the ratings on the yellow-and-black EnergyGuide label to help you determine what size your family needs:
- If your family uses a lot of hot water at certain times of the day - morning showers, for example - look for a model with a higher first-hour rating. This measures how much hot water the unit can produce in one hour.
- If you family uses hot water all day long, find a water heater with a fast recovery rate to ensure that you'll never run out of hot water. The recovery rate shows how long it take the full tank of water to heat to the proper temperature.
When you consider these ratings, you'll find that a high-efficiency 40-gallon tank might provide more hot water in one hour or "recover" faster than an inefficient 50-gallon unit.
For safety’s sake, we highly recommend having a water heater professionally installed. Learn more about water heater installation.
Tankless water heaters
With a tankless water heater, you can have a virtually endless supply of hot water – and lower energy bills.
How it works
Tankless water heaters – also called as “instantaneous” or “on demand” water heaters – consist of an electric or gas heating element enclosed in a small module. Instead of warming a large amount of water stored in a tank, a tankless unit heats only the water that flows through it.
When you turn on the hot water faucet, the module senses the change in flow and pressure, and the heating element immediately switches on. Shut off the faucet, the heater stops immediately.
A “whole-house” tankless water heater is much smaller than a tank water heater, taking up only two or three cubic feet of space. Smaller “point-of-use” water heaters can be installed directly below a faucet, inside a bathroom or kitchen cabinet.
Newer on-demand water heaters also have digital temperature controls with sensors that check the water temperature more than 7,000 times each day.
The energy savings with this technology can be significant. With conventional water heaters, up to 20 percent of the energy used is wasted because of “standby” heat loss from the tank and hot water pipes.
Tankless models eliminate these losses, resulting in an energy factor of 0.84, compared to 0.64 for the most energy-efficient tank-style water heater.
That means replacing a natural gas tank water heater with a tankless model will cut operating costs by 25 to 45 percent. The savings are even more dramatic if you replace an electric or liquid propane water heater – you’ll cut your water heating costs by 50 percent or more!
Some older tankless heaters allowed the water temperature to vary depending on the amount of water being used. Newer models have modulating gas valves or sequential electric elements that produce more heat as water flow increases.
Maintenance costs are another bonus: Tankless heaters have a lifespan up to twice as long as conventional units, because there is no tank to rust or anode rod to replace.
The biggest drawback to a tankless water heater is the price, averaging around $1,300 for the unit itself. This technology also requires larger gas lines, different exhaust vents and water treatment, creating additional installation expense.
For that reason, tankless water heaters aren’t cost-effective for an existing home. But in a newly-constructed home, you can expect to have your investment paid back in energy savings in about five to seven years.
Another consideration is the maximum flow rate – if you have a large family, you might not have enough capacity to take two showers and run the clothes washer and dishwasher simultaneously. You can avoid those problems by running appliances late at night.
Solar water heaters
A solar water heater is an investment that's great for the environment – and your energy bills.
How it works
Solar water heaters use thermal panels to collect heat from the sun's rays. These panels, which require an unshaded south-facing location, are usually installed on a rooftop.
Sunlight passes through the panels and is collected by a dark absorber plate. The plate warms liquid passing through pipes - either the home water itself, or a heat-transfer fluid like an environmentally safe antifreeze.
If an antifreeze mixture is used, the heat is extracted from the fluid through a heat exchanger inside the water heater, just like a standard natural gas or electric model.
According to the U.S. Department of Energy, solar water heaters can operate in any climate. In fact, the colder the water, the more efficiently the system works. But keep in mind that most local building codes require a conventional water heater as a backup in case of emergencies.
The sizing and installation of a solar water heater is a professional job - your contractor will use worksheets or computer programs to determine the right size for your family's need, as well as the best place to install the panels. Learn more about water heater installation.
The initial cost of a solar water heating system ranges from $1,500 to $3,000; in many cases, the cost can be paid back in energy savings in less than eight years.
If you currently have an electric water heater, switching to a solar model is a good investment - some homeowners have cut their electric bills by 50 to even 80 percent. The energy savings can pay back the price difference in about four to eight years.
Replacing a natural gas water heater with a solar system won't offer such dramatic savings, because gas models are already more energy-efficient than electric.
If environmental impact is an important consideration, a solar water heater can make a difference. If you replace an electric water heater with a solar system, more than 50 tons of carbon dioxide emissions will be displaced over the 20-year lifespan of the equipment.