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Water Heater Buying Guide: How to Choose the Right Type and Size


Choosing the right water heater depends on a number of factors, including size, fuel and the amount of hot water required. This critical piece of equipment hides in closets and maintenance rooms, but can be responsible for over 15 percent of your energy bill, according to Energy Star. Water heaters need to balance efficiency and volume, whether you select a gas or an electric model. According to the U.S. Department of Energy (DOE), standard tank water heaters can provide large quantities of hot water, but can add to energy costs. Tankless water heaters only heat the water you use, cutting energy use, but it’s limited volume of on-demand hot water is lower than what some households may need. Finding the best option for your facility depends on your demand, your desired energy savings and your budget.

Types of Water Heaters

Standard Tank Water Heaters

Also known as storage tank water heaters, these heaters have become the standard in residential and commercial spaces. Water in the tank is regularly heated up to provide a large volume of hot water at all times. According to the DOE, storage tank water heaters can store between 20-80 gallons of hot water, and feature safety equipment such as pressure-relief valves that need to be inspected periodically. Tank water heaters come in electric and gas versions, and can feature additional insulation and higher-efficiency burners to reduce energy use.

Tankless Water Heaters

Tankless water heaters are wall-mounted devices that heat water on demand rather than storing a large volume of preheated water. According to the DOE, tankless water heaters provide 2-5 gallons of hot water per minute. Unlike traditional or storage tank water heaters, tankless water heaters do not store large volumes of water. Instead, they incorporate heating coils that rapidly heat water on demand and then deliver that hot water—as long as water and power are available. Like standard water heaters, tankless water heaters come in electric and gas models.

Tankless water heaters tend to be more expensive than storage tank water heaters, but are more energy-efficient, saving you money over time. Tankless water heaters can outlive a standard water heater almost twofold—up to over 20 years, according to DOE estimates.

Choosing the Right Water Heater

What Size Water Heater Do I Really Need?

Water heaters come in a variety of sizes, usually based on how much hot water throughput you need. According to the DOE, several factors can help you determine the size of water heater you'll need.

  • Maximum Flow Rate: Sizing water heaters starts with calculating the maximum flow rate. Flow rates are usually represented as gallons per minute (gpm) of water. They can be included in appliance manuals, provided by manufacturers or calculated by measuring the amount of water in gallons that flows through a faucet or supply line over a minute. Add up all of the appliances using hot water and their flow rates to find the estimated maximum flow rate. Any water heater you buy must provide at least that many gpm of water.
  • Gallons of Water Used: Similar to flow rate, the gallons of available water are an important consideration in sizing water heaters. To calculate total gallons used, add up the gallons required by each appliance or faucet over an hour, and ensure that your water heater can deliver that much water. This is approximately the value of your maximum flow rate calculation multiplied by 60. Storage tank water heaters may offer enough gallons to match your use on paper, but typically do not drain fully and must refill constantly to meet demand. A larger model may be necessary to provide constant water flow over time. Tankless heaters can provide a constant supply of hot water.
  • Temperature Rise: The incoming water supply averages around 50 degrees Fahrenheit, but can be colder or warmer depending on the season and water source. Given that hot water is usually around 120 degrees Fahrenheit on average, your water heater will need to be capable of bringing water temperatures up 70 degrees or more depending on the appliance or faucet using the water. The higher the temperature rise, the lower the flow rate—making larger water heaters a better option for high-temperature and high-demand situations.

Water Heater Considerations

Water heaters come in both gas and electric models, with the main differences depending on your budget, existing energy hookups, sustainability goals and local utility costs. When choosing a water heater, whether you decide on tankless or tanked, according to the DOE, there are several factors to consider:

  • Existing Power Sources: If your facility does not currently have a gas source available, a gas water heater is likely to be prohibitively expensive to install. Prices for both gas and electricity can fluctuate depending on your area or the season, and must be factored into costs.
  • Power Outages: Gas water heaters work during a power outage, as the flame or coil is powered by gas that continues to flow even without power. Electric models will shut down unless connected to backup power.
  • Efficiency and Environmental Impact: Gas water heaters use fossil fuels. However, electric water heaters connected to the power grid may also use coal or gas fuels. Selecting the most sustainable option can come down to efficiency, how much fuel a water heater actually burns. High-efficiency models reduce waste by converting more fuel into heating the water when compared to standard models.
  • Price Point: Electric heaters tend to be less expensive to buy, but more expensive to operate. Installation costs for both models are similar, unless gas piping needs to be installed. Tankless water heaters often have higher upfront costs.

Now that you know more about the types of water heaters available and how to choose the right size, you can find the ideal one for your facility.


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The information contained in this article is intended for general information purposes only and is based on information available as of the initial date of publication. No representation is made that the information or references are complete or remain current. This article is not a substitute for review of current applicable government regulations, industry standards, or other standards specific to your business and/or activities and should not be construed as legal advice or opinion. Readers with specific questions should refer to the applicable standards or consult with an attorney.