New Homeowner’s Guide To Water Heaters

Updated: Apr. 09, 2024

A water heater accounts for almost 20 percent of a home's energy use! Keep energy efficiency and your hot water needs in mind as you compare options.

As the name suggests, a water heater turns cold water into hot water so you can shower, wash the dishes and do the laundry.

Modern water heaters do this much more efficiently than their predecessors. Water heaters last from 10 to 15 years on average, so if you’re moving into a new home, the one that’s already there could be close to the end of its service life. That gives you a golden opportunity to upgrade.

The water heater uses more energy than any other appliance in a home except the furnace, according to, so efficiency is important. Whether you’re upgrading an existing model or buying for a newly-built home, here’s what you should know to make an informed purchase.

Types of Water Heaters

Wood may have been suitable fuel for heating water in a rustic homestead, but today’s water heaters exclusively rely on gas or electricity. Natural gas tends to be cheaper than electricity in most parts of the country, so historically gas water heaters have been more economical that electric models. Now there’s a new type of water heater that’s changing everything.

Conventional gas

A conventional gas water heater burns natural gas or propane. It features a cylindrical glass-lined metal tank with a gas burner placed underneath it that heats the water in the tank, much like a gas stove. An exhaust system vents combustion gases to the outdoors.

Gas water heaters can have an automatic ignition system, which requires electricity, or a standing pilot light. You ignite the latter with a match or by pressing an electronic igniter.

Conventional electric

A conventional electric water heater has the same cylindrical glass-lined tank, but the water inside is heated by two resistive heating elements inserted through the side of the tank.

The elements glow red-hot when the thermostat calls for heat, consuming about 4,000 watts. Because the tank is well insulated, they usually don’t have to stay on for long. Unlike a gas water heater, an electric one produces no emissions.


The new hybrid water heater employs a heat pump with a refrigeration system. Refrigerant circulates through copper coils on the top of the unit and evaporates, drawing heat from the surrounding air. The refrigerant then proceeds into another coil immersed in the water heater where a compressor pressurizes it and releases the heat into the water.

The heat pump system is used in conjunction with backup resistive heating elements. A hybrid water heater uses far less electricity than a conventional electric water heater and about the same amount as a refrigerator, making it even cheaper to run than a conventional gas model.

Energy savings can be $400 or more per year, which more than makes up for the hefty price tag — $1,700 or more, compared to $600 to $900 for a conventional gas or electric water heater.

Besides being economical, hybrids have a cooling effect because they draw heat out of the air. They’re also taller than conventional tank water heaters and require a minimum air space (typically 1,000 cu. ft.). That limits where they can be installed.

Tankless gas or electric

Also known as on-demand water heaters, tankless water heaters switch on when you turn on a hot water faucet, then switch off as soon as you close the faucet.

They use less fuel than a tank-style water heater because they aren’t continuously reheating water. But they don’t work well with low or fluctuating water pressure, because their sensors won’t switch them on unless they detect a minimum flow rate.

Despite this drawback, a properly sized tankless water heater offers better energy efficiency than a tank-style for every home, assuming normal water pressure. The San Jose Mercury News reports nearly every new homeowner in California includes one in the plumbing design to help achieve state-mandated energy saving goals. Check out our picks for the best tankless water heaters of the year.

Sizing Your Water Heater

If you decide on a tank-style water heater, you also need to decide what size the tank should be. Larger tanks provide more water, but monthly costs to heat the extra water will be higher. Here’s a rough sizing guide:

  • 30 to 40 gallons for one or two people;
  • 40 to 50 gallons for two or three people;
  • 50 to 60 gallons for three or four people;
  • 60 to 80 gallons for five or more people.

Sizing a tankless water heater is more complex, because the amount of hot water a household needs depends on several factors. Among them: The number of hot water fixtures and appliances; the number expected to be in use at the same time; and the average temperature of the groundwater, which varies with climate.

A single-bathroom house with a dishwasher and washing machine in central Minnesota needs a unit that can increase water temperature by 78 F at a maximum flow rate of 9.7 gallons per minute. The same house in central Texas only needs to raise the temperature by 53 F, so a smaller unit would work.

An online calculator, such as the one provided by, can help you choose an appropriate model.

Basic Water Heater Maintenance

Like everything else in your home, your water heater needs maintenance to maximize its service life. You can get 12 to 15 years or more out of your water heater by following these simple procedures:

Tank water heaters

  • Drain sediments from the tank periodically: Hard water and rust deposits shorten the life of the tank. Remove them by draining two or three gallons of water every year or so. Put a bucket under the drain plug, open the plug slowly (the water is hot) and let the water run until it’s clear and free of sediment.
  • Test the temperature and pressure relief (TPR) valve: The TPR valve opens automatically to relieve excess pressure, preventing a possible explosion. Test it by lifting the lever and catching the water that spills out in a bucket. If the valve doesn’t release water or you can’t reset the lever, it’s inexpensive and easy to replace.
  • Replace the anode rod: The anode rod attracts ions in the water that would otherwise corrode the tank liner. If it’s doing its job, it disintegrates and needs to be replaced every five years. Here’s how to replace it.

Tankless water heaters

  • Descale your tankless water heater: Hard water deposits accumulate inside tankless water heaters and clog them. You can remove scale by flushing your tankless water heater with vinegar. To do this, fill a bucket with a 50/50 vinegar/water solution. Turn off the power and cold water supply, drop in a submersible pump and circulate the water through the flush valves on the water heater for about an hour and a half. Do this annually if your water has high mineral content.