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There are many debates that have been ongoing as long as we can remember—crunchy peanut butter or smooth? Morning shower or night? Whether you fall into the AM or PM shower camp, if you’re like most people, your day is not complete without that ritual. Either way, there is one underlying necessity that many of us might take for granted: hot water.

For this reason and many others, your hot water heater is an essential household appliance that may not be in plain sight but is working on overtime every time you take a shower, wash your hands, do the dishes, or run a load of laundry—all important aspects of your day-to-day life.

There won’t be a day that goes by when you haven’t utilized the unique power of a water heater in your home. But did you know how much your hot water heater could be contributing to your utility bill? The answer might surprise you!  In this post, we explain how hot water heaters work, connect that work to your energy use and utility bills, and provide you with a guide to the best hot water heaters for your home and how to select one.

Hot Water Heaters, A Primer

As you may have gathered from our previous posts, we like to start with the basics. Once you understand how hot water heaters work, it will become clear why they require so much energy and why it’s worth keeping power consumption in mind in order to identify the best hot water heater for your home.

How They Work

The science behind the water heater is actually pretty straightforward. A fuel-burning source heats either stored water or a volume of water that flows past that heat source. The heated water then travels through the fixtures in your home to where it is needed. That would be the dishwasher, shower, bathtub, washing machine, sink, you get it!

Types of Water Heaters

As you may have gathered from the above description, there are two ways to categorize hot water heaters: by storage type and by fuel type. Comparing by storage type, we have:

Storage Water Heaters: these hold a considerable volume of water to heat at any given time

Tankless (or Demand) Water Heaters: as the name implies, these have no storage tank but heat water as it passes by the heating source

Heat Pump Water Heaters: these move heat from one place to another instead of generating heat directly and only for hot water.

Comparing by fuel type, we have:

Electricity: these are widely available in the U.S. in either storage or tankless formats

Gas: within this category, there are fuel oil, natural gas, and propane water heaters, also available in both storage and tankless heaters

Solar: these are most abundant in the Southwest U.S. but available throughout the country

Geothermal: these are available throughout the U.S., but you’ll need a geothermal heat pump system already installed to leverage this type of hot water heater.

Storage vs. Tankless Water Heaters

Tankless Water Heaters

Tankless heaters, also referred to as demand-type or instantaneous water heaters, do not store water. Instead, they only provide hot water as it is needed.

How They Work

Cold water flows into the heater when a hot water tap is opened. The flow of water is detected by a circuit board that activates the heat exchanger that heats the water as it passes through. Once the flow sensor determines that water has stopped flowing, it will quit heating it. In other words, a tankless water heater will heat water as long as the tap is open. Hence the term “demand.”

If you have a large home with fixtures that are pretty far from your hot water heater but want a demand-type heater, consider a model with a recirculation pump. This keeps hot water available in the hot water line and speeds up the delivery of hot water.

If efficiency is your number one concern, we suggest checking out even another variation of the tankless water heater which uses condensing technology. It captures the heat created by the outgoing exhaust gases and uses it to heat incoming cold water. This type of heat exchanger unit is very efficient in that it saves on your energy costs.

Why Tankless?

The initial cost of a tankless water heater is greater than that of a conventional storage one. However, tankless water heaters typically last longer, with a life expectancy of more than 20 years! They also have replaceable parts that can extend their life by many more years. Compare this to the expected 10-15 year lifetime of a storage water heater.

Additionally, tankless heaters boast lower operating and energy costs over those long lifetimes. If your home uses 41 gallons of less of hot water each day, demand water heaters can be 24 – 34 percent more energy-efficient than conventional storage tank water heaters. Now that’s what we’re talking about! If you use a lot of water, that efficiency will go down, but tankless heaters will still be up to 14 percent more energy-efficient.

Storage Water Heaters

Tankless water heaters provide many advantages over storage water heaters. But conventional storage models are still the most popular type of water heating systems for the home.

How They Work

The storage water heater for a single-family home has a reservoir of water that can range from 20-80 gallons. It releases that hot water each time you turn on the hot water tap. And then it replaces that used hot water with cold water, which it heats immediately, to ensure that the tank is always full.

Why Storage?

Storage water heaters typically have a lower up-front price tag and installation-related costs. The operating system of a storage water heater is also relatively simple, meaning that it can require less maintenance.

However, storage heaters typically require more space and bring greater energy costs. Since water is constantly heated in the tank, even when a hot water tap isn’t running, energy is wasted. This is called standby heat loss. If you opt for a storage heater, one thing to look for is a heavily insulated tank that will reduce that heat loss and lower your annual operating cost. The U.S. Department of Energy suggests looking for tanks with a thermal resistance (R-value) of R-12 to R-25.

Heat Pump Heaters

If you feel like you still haven’t found your goldilocks system in storage and tankless options, there are three more types of water heaters that you can choose from: indirect, heat pump and point-of-use. The most common of these in home settings is the heat pump water heater.

Heat pump heaters use electricity to pull heat from the surrounding airspace and use that to increase the temperature of the water that it has stored. Essentially, a heat pump water heater works like a refrigerator, but in reverse!

Because this type of heater is moving heat instead of directly generating it, it can be two or three times more energy-efficient than conventional electric water heaters! However, heat pump heaters do require mild climates to be effective, so they are only appropriate in certain locations.

Water Heaters by Fuel Source

Regardless of whether you select a demand-type, storage, or heat pump water heater, you will also need to select the fuel-type for your heater. To make this decision, definitely reach out to your utility to compare the rates of each type of fuel. You can calculate and compare annual operating costs using the energy factor of a heat pump, and the fuel’s cost.

Gas-Powered Water Heaters

Regardless of fuel type in this category (natural gas, propane, or fuel oil), each of these types of water heaters operates with a thermostat built into the inside of the tank. Once the water temperature drops below a set level, a burner ignites. 

Additional cold water enters the tank from the top and follows the path of a dip tube to the bottom of the heater. That is where the burner is located, and as the water heats, it rises within the tank to exit via the hot water outlet to the fixture.

Combustible gases created from this process are vented through the center of the tank in a flue. The flue also acts as a heat conductor. The gases move slowly due to the baffle design of the tank system.

Electric-Powered Water Heaters

Electric water heaters also use a built-in thermostat but have a 220-volt current that runs through a circuit with two heating elements. When the thermostat determines that the temperature has fallen below a set level, electrical energy is converted to heating energy inside the heating elements. The heat transfers to the stored water, via conduction, heating it.

Believe it or not, your kitchen coffee machine uses the very same heating process! 

Renewable Energy-Powered Water Heaters

Solar water heaters and geothermal water heaters provide hot water without burning any fuel source. In the case of solar heaters, the sun serves as the “fuel,” and in the case of geothermal heaters, stored heat in the earth provides the “fuel.” While both of these types of systems will require additional planning, they can provide significant operating and energy cost savings over the long run!

The Best Water Heater For Your Home

With so many factors determining the best water heater fit, the right model for you may be different from that of your neighbor! However, we consulted with experts and customers alike to provide recommendations for each of the major types of heaters to support your water heating journey.

Best Overall Electric Storage: Rheem Performance Electric Elements

This tank is plenty large for a family of three or four and has dual heating elements to ensure you have plenty of hot water whenever you and your family need it. If you have a big family and need more water capacity, consider the Westinghouse 52 Gal electric heater.

Best Overall Electric Tankless: EcoSmart ECO 11 Tankless

This water heater works quickly and provides great control over the temperature of your water and consistent heating performance.

Best Overall Gas Storage: Rheem Performance Natural Gas

This heater is big enough for two to four people, and we love that its push button ignition makes the start-up process quick and easy. It also comes with a solid six-year limited warranty. If you have a big family and need more water capacity, our vote goes to one of the largest residential storage heaters on the market: Westinghouse 60 Gallon natural gas heater.

Best Overall Gas Tankless: Rheem Performance Platinum

This water heater has a sleek design that allows it to fit in small spaces that normal tank heaters would not fit. It offers great, consistent results and is definitely a winning option if you’re looking for a gas-powered tankless heater!

Things are Heating Up!

There was a time when the only way you could heat water in your home was in small quantities on the top of a woodstove. Luckily, hot water heaters have evolved with new technology changing and improving the way we do things in our daily lives. Selecting a new hot water heater can be a bit of a project, with all the varieties out there, but hopefully this post will help you whittle down your search and identify the best fit for your home!

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