Water Heater Buying Guide: Compare Storage, Tankless, and Heat Pump Systems

Tankless Water Heater and Storage Water Heater

In my last blog post, “7 Signs You Might Need a New Water Heater,” I wanted you to know what to pay attention to in case you need to replace your water heater. What if you need to replace it? What are your options, and how do you choose?

Before heading to your local home improvement store, it’s important to research your options. As always, you need to decide on the budget and size before you consider energy efficiency and water use.

Storage Water Heaters	Heat Pump Water Heaters	Tankless Water Heaters
Average size range is 30-80 gallons	Similar to storage water heaters, average size is 50-65 gallons; not as common in Colorado	Size is based on gallons per minute (GPMs) your household needs
Lasts about 10-15 years on average	Lasts about 10-15 on average	Lasts about 20 years+ on average
Stores water, depending on size, to supply hot water on demand until tank is empty	Contains a heat pump unit, usually on top; pulls heat from air to heat water	Provides hot water on demand; no waiting for water to “warm up.”
To replace the hot water, cold water enters the bottom of the tank through the dip tube, where it is heated, ensuring that the tank is always full.	Most heat pump water heaters have  backup electrical elements that kick in during times of high demand; these can be disabled to stay in the most efficient mode	Output determines flow rate; a dishwasher might use 1.0-2.2 GPM, while a shower at the same time might use 1.5-2.0 GPM. You want a unit that can handle, say, 4.2 GPMs.
Since water is heated in the tank until the thermostat setpoint temperature is reached, energy can be wasted even when a hot water tap isn't running due to standby heat losses, which result from the tank losing heat to the surrounding environment.	Taller than standard water heaters; might have difficulty fitting it into mechanical rooms	Units are small and fit into small spaces easily. They also have easily replaceable parts that may extend the life by many more years.
Average costs, including installation: $500-1950	Average costs: $2500-5000, with installation. Average costs without installation: $1449-1950	Average costs: $4300+ if switching from a storage water heater to a tank heater.
Fuel type and its availability in your area may narrow your water heater choices.		Units' average cost: $800-2600
Electricity: Widely available for conventional storage, tankless or demand-type, and heat pump water heaters. It can also be used with combination water and space heating systems, which include tankless coil and indirect water heaters. Natural gas: 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. There are other options, but these are the two most common.	A heat pump-style water heater uses electricity as its energy source to run the heat pump components. It does not use fossil fuels like natural gas or propane. Instead of generating heat directly, it uses electricity to move existing heat from the surrounding air into the water tank, making it a highly efficient way to heat water. Heat pump water heaters are highly efficient, using 60-70% less energy than standard electric water heaters and providing significant long-term savings for households.	Initial cost is greater, but based on the number of gallons your home uses per day, they can be 8%-34% more efficient, saving you money on your energy bill. Before investing in a tankless water heater, you must determine: your household hot water needs, size of unit, fuel type and availability, initial costs, and energy efficiency. Fuel types: electricity, natural gas, or propane as its fuel source. The best choice depends on your home's existing infrastructure, local energy costs, and the scale of your hot water needs;  gas and propane models often provide more powerful, faster heating compared to their electric counterparts.

It’s best to consider and research your options before you need to replace your water heater. One website I found helpful is: https://www.energy.gov/energysaver/home-comfort. You might also visit: https://www.energystar.gov/products to learn more about energy efficiency within your home.

There’s a lot to know about water heaters, and it can seem overwhelming at first. This guide should give you a clearer understanding of your options. Ultimately, the right unit for your home will come down to four factors: your budget, the size of your household, your fuel type, and the level of efficiency you want. If you still have questions, reach out! I’m happy to help.