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Water Heater Buyers Guide: Which One is Right for You


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Whether you're replacing an old water heater or buying one for a new home under construction, there are a number of choices and things to consider. Which brand should you buy, what type of fuel will it burn, and should you purchase a tankless or tank-style water heater, are just a few of the decisions you'll need to make.

In this article we'll explore the different styles of water heaters to help you understand the advantages and disadvantages of each. If you're in the market for a new water heater, it's important to do your research so you can make the best decision for your household hot water needs.

Which Water Heater is Best for You?

There are two main types of water heaters: Tank-style and tankless. Both types have natural gas (or propane) and electric models available. Let's take a closer look at each style:

Tank-Style Water Heaters

Tank-style water heaters are the most common type of water heater used in North America and are often referred to as storage water heaters because they have a large insulated cylindrical tank that heats and stores the water until it's needed. 

The water inside a tank-style water heater is kept hot so it is always ready for use. Typically tank sizes for household use range between 20 to 100 gallons.

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How a Tank-Style Water Heater Works

Cold water enters the top of a tank-style water heater and travels down a dip tube to the bottom of the tank where the water is heated. The water held within the tank is at all times under the same pressure as the water within the entire water system.

The heating mechanism (either a gas burner or electric heating elements) stays on until the water within the tank reaches the temperature set by the thermostat. As the water heats, the "hotter" water rises to the top of the tank towards the hot water outlet. This happens through a process called convection. Since the cooler water is denser than the hot water, it remains near the bottom of the tank where it can be more efficiently heated.

As a result, the water that leaves the tank is always the hottest water in the tank. When water leaves the tank, more cold water enters and the cycle continues. Once the water near the bottom of the tank (and therefore near the thermostat's sensor) reaches the set temperature, the water heater automatically powers down.

Pros and Cons of a Tank-Style Water Heater

Advantages - The initial cost of a tank-style water heater, including installation costs, can be up to three-times less than that of a tankless water heater. In addition, they have the advantage of using energy (either gas or electricity) at a relatively slow rate, since they, in effect, stores heat for later use. 

Disadvantages - Tank-style water heaters are less energy efficient because the water within the tank will cool down when it's not being used. As the temperature of the water drops, it'll signal to the thermostat to power-on the heater and reheat the water. This is called standby heat loss and it's a significant operating expense. In addition, once the tank's supply of hot water has been exhausted, there's a delay before hot water will be available again.

In the long run, a tank-style water heater will likely use more energy and therefore cost more to operate than a tankless water heater.

A.O. Smith ENS-50 ProMax Short Electric Water Heater, 50 gal

A.O. Smith ENS-50 ProMax

The ENS-50 ProMax Short is an excellent 50-gallon electric water heater from A.O. Smith.

Electric Tank-Style Water Heaters

Electric water heaters typically have two heating elements, although compact models may have only one. These elements are similar in appearance and operation to the heating elements found on an electric stove, but they heat from within the tank, while immersed in water.

One heating element is located near the top of the tank and the other is near the bottom. Each element has its own thermostat which can be adjusted separately, though they should normally be set to the same temperature at all times.

Rheem SP610160 Element - 4500W CO U F

Rheem Heating Element

The heating element is responsible for heating the water in an electric water heater. From time-to-time they burn out and need to be replaced.

Suprisingly both elements don't operate at the same time. During periods of little or no hot water usage, only the bottom element is on. Cold water is delivered near the bottom of the tank and is heated by the bottom element. As the water is heated, it rises to the top of the tank by means of convection. Since the upper element is surrounded by hot water, it has no need to turn on. 

When a hot water faucet is opened in the house, hot water is drawn from the top of the tank through the hot water outlet, and cold water is drawn into the tank and travels through the dip tube to the bottom where it's heated.

However, if a large volume of hot water is drawn from the water heater, the bottom element may not be able to keep up. When this happens the water at the top of the tank is cool and triggers the top element to fire on, and simultaneously shuts down the bottom element.

The top element's task is to heat the water at the top of the tank to quickly prepare for the next hot water demand. Once the water at the top of the tank is heated, the top element shuts down and the bottom element once again turns on when cold water is present.

> > Learn What Size Water Heater You Need < <

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Pros and Cons of an Electric Tank-Style Water Heater

Advantages - Electric tank-style water heaters are the least expensive of all the heaters. In addition, they also have low installation costs because they do not require ventilation since no combustion gasses are produced. An electric water heater typically has a longer service life (8 to 10 years) than a gas water heater (6 to 8 years).

Disadvantages - Electric water heaters cost more to operate than gas heaters, which means higher utility bills. In addition, if you live in an area that's prone to power outages you may want to consider that if your electricity goes out, so will your water heater.

A.O. Smith GCG-50 ProMax Tall Gas Water Heater, 50 gal

A.O. Smith GCG-50 ProMax

The GCG-50 ProMax Tall is an excellent 50-gallon gas water heater from A.O. Smith.

Gas Tank-Style Water Heaters

As with any tank-style water heater, the cold water entering the tank is delivered near the bottom via the dip tube and the hot water rises to the top of by means of convection. When there's a demand for hot water within the house, the hot water exits the tank through the hot water outlet, and cold water fills the bottom of the tank to continue the cycle.

But that's where the similarities end. In order to heat the water, a gas powered water heater burns it's fuel (natural gas or propane) using a burner located at the bottom of the tank. This produces combustion gases which need to be vented. Because of this, a gas water heater has a chimney, called a flue tube, that rises through the center of the tank to the venting flue stack at the top of the water heater. Venting is attached, and the combustion gases are released outside. 

A gas water heater will have a gas burner control module that controls the ignition of the pilot light, which is where the thermostat is located. Connected to this module is the gas line and a gas supply valve. If you ever need to power off your water heater, this is the valve you'll close.

> > Check Out Our Tank-Style Water Heater Sizing Article < <

Pros and Cons of a Gas Tank-Style Water Heater

Advantages - Although more expensive to purchase, a gas water heater is typically less expensive to operate than their electric counterpart. They're also not impacted by power outages, which means that they'll continue to work even when the electricity goes out.

Disadvantages - Gas water heaters require a larger initial investment to purchase, and because they require ventilation, they're more expensive to install. In addition, we highly recommend keeping a carbon monoxide detector nearby to alert you to any venting problems. Carbon monixide poisoning is a silent killer and you may not be aware before it's too late.

Rinnai RU199iN Sensei Super High Efficiency Tankless Water Heater, 11 GPM - Natural Gas: Indoor Installation

Rinnai RU199iN Tankless

Rinnai manufacturers a gas tankless water heater capable of delivering 11 gallons per minute of hot water.

Tankless Water Heater

Tankless water heaters are gaining in popularity because of their ability to deliver hot water on-demand and their excellent energy efficiency. They also are built to last with many replaceable parts, and with the proper maintenance can have a service life of 20+ years!

Unlike a tank-style water heater that stores hot water until there is a demand, a tankless water heater jumps to action the second a hot water tap is opened within the house. The cold water enters the heater and heats the water as it flows through the heat heat exchanger. Without the limitations of a tank, a tankless water heater can provide a continuous and endless supply of hot water. 

It's critical to purchase the correct sized tankless system for your household hot water needs. Our detailed Tankless Buyers Guide will help you. A tank-style water heater measures it's capacity by tank size (50-gallon tank), but a tankless water heater measures it's capacity in how many gallons of hot water it can deliver each minute (gpm).

Tankless water heaters are available in both gas (natural gas and propane) and electric models. Read our extensive article on Gas vs Electric to determine which is the best match for you.

> > Check Out Our Tankless Water Heater Sizing Guide < <

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Pros and Cons of a Tankless Water Heater

Advantages - A tankless water heater provides significant energy savings since it only draws power when hot water is being drawn. At night, or during any other periods of non-use, the heater remains completely idle. Because it heats water only when needed, the tankless system is not limited by the capacity of a storage tank. You'll never need to worry about running out of hot water again because it delivers a seemingly endless supply of hot water.

Tankless water heaters also use less space. They're mounted on a wall and do not require any floor space. There are even gas tankless systems that can be installed outside and do not require venting. In addition, with the proper care, a tankless system can have a service life of 20+ years, and without a tank to breakdown, there is less chance of leakage and water damage.

Disadvantages -  The initial cost and installation of a tankless water heater is about three times more than a tank-style water heater. Although, tankless systems are often called instantaneous water heaters, it actually takes slightly longer to get hot water. This is because a tank-style heater has the water already heated and ready for use, where a tankless system needs to heat the water. Still, the time difference is negligible and many manufacturers have added built-in circulation pumps to their higher-end models which help combat this slight inconvenience.

Tankless water heaters are sophisticated pieces of equipment and require professional installation and expert servicing, especially when problems arrise. It's also important to note that tankless systems provide excellent energy savings overall, however the amount of energy they use to heat the water during times of use is quite high. For households on time-of-use metering (where electricity costs more during peak periods such as daytime, and less at night), a tankless water heater may actually increase operating costs if the hot water is used during peak hours.

Stiebel Eltron Tankless Water Heater – Tempra 24 Plus – Electric, On Demand Hot Water, Eco, White

Stiebel Eltron Tempra 24 Plus

Stiebel Eltron manufacturers an excellent electric tankless water heater.

Which Water Heater is Right for You?

The water heater you choose to purchase depends on a lot of different factors. If you're building a new home, a tankless system is an excellent choice, however, if you're considering retrofitting your home with a tankless, you'll want to way your options. The cost of installing a gas tankless system may be cost prohibitive, especially if you only plan on living in your home for a few more years. Although, on the other hand, a tankless system will increase the home's value.

Electric tankless water heaters require large amounts of electricity which many homes simply do not have available. They're less expensive to purchase and install, but if you need to upgrade your household electrical panel you'll be adding thousands of dollars to the project.

On the other hand, tank-style water heaters have been around for years. They're less energy efficient, but also less expensive to install and purchase. They offer a decent service life (up to 8 to 10 years) and with proper care you can often add years of additional service. Regardless of which style water heater you choose, it'll be heating water for your family for years to come.

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