The Essential Guide to Selecting a Water Heater: Heat Loss, Hot-Water Requirements and Pricing

kitchen with water heater

Choosing the right water heater is not an easy decision. There are so many factors to consider, including size, fuel type and efficiency. It is also hard to choose between Rheem vs Ao water heater, then both pretend to be the best water heaters company. The good news is that there are a number of resources available to help you make this decision! In this article, we will cover some key considerations when selecting your new home water heater.

Types of Water Heaters

There are two main types of water heaters: storage tank and tankless.

Storage Water Heaters

Most homes have a 50-gallon or larger storage water heater that provides hot water on demand, instead of waiting for the unit to reheat after using hot water. Storage tanks generally hold more than one day’s worth of hot water, but not always enough for a full house of water use.

Storage tank types include Conventional Storage Water Heater  This is by far the most common type of storage water heater and is easily found in most homes across the US. These units are fueled by natural gas or propane. There are two types – conventional electric heaters that use electric heating elements to heat the water and gas-fired units that use a burner. Conventional storage tanks are available in 40, 50 and 80-gallon water heater sizes – think about how many showers you can take at one time before running out of hot water!

Convention Gas Storage Heater  

These types of conventional storage tank heaters are fueled by natural gas and use a conventional electric heating element to heat the water.

Heat Pump Water Heater

One of the more energy-efficient types of storage tanks uses a heat pump to extract heat from the outside air and transfer it into your water. These units use no gas or oil while providing hot water for multiple fixtures at once! They may be slightly less efficient in extremely cold weather conditions that require you to rely on your backup heating system.

Tankless Water Heaters

The other main type of water heater does not store hot water at all but heats it on demand. Tankless units are best-suited for one or two people who live in smaller homes and use less than 40 gallons per day which is the average daily usage. These heaters are great for protecting against long-term heat loss but are more expensive to install.


There are two types of tankless water heaters: electric and gas-fired. Gas-fired units can be fueled by natural gas or propane, while electric models generally require a 240V electrical system, typically an upgraded service panel. The size of the unit will depend on the size of your home and how many bathrooms you have.

Most tankless water heaters require regular maintenance – check with your manufacturer to see if this is something that requires yearly or every few years, depending on which type of unit you choose.

How Do You Determine The Right Size Water Heater?

When choosing a new water heater, it is important to measure your hot-water usage and determine what size will best meet your needs.  If you have multiple bathrooms or want an extra margin of safety in case someone takes a long shower or uses more than average amounts of hot water, we recommend choosing a larger unit. Keep in mind that smaller units may be less expensive to install and use less energy but will not provide enough hot water for multiple bathrooms or homes with many occupants.

High-Efficiency Conventional Storage Heater  

These types of high-efficiency storage tank water heaters are similar in appearance to standard, or non-high efficiency models but they typically cost more (and save you money on your energy bill!). High-efficiency units also use less energy to heat water.

Hot-Water Requirements  

If there are more than two people living in a household, think about how many more showers you need to take before the hot water runs out. Most homes have a 50-gallon storage tank for this reason – however, if someone is always taking long showers or baths then it’s time to upgrade!

If your kids are all in school and there isn’t as much demand for hot showering during the day, consider a smaller storage tank or even a tankless water heater.

If the unit is for your home’s main hot-water supply and you have an electric heat pump system – make sure to get a gas-fired model as they work better with these types of systems.


The initial cost will depend on which type of water heater you choose, the size and whether or not it has any special features.

Electric models tend to be less expensive than gas-fired units because they cost less to operate, if powered by electricity. The other type will depend on how much hot water your household uses – 40-gallon units are generally cheaper than 80-gallon ones that hold more water.

Rinnai, Noritz and Takagi are great brands to consider if you want a tankless model – while AO Smith is known for more affordable electric storage tanks.


As you can see, there are several different types of water heaters available and deciding which one is right for your home will depend on the size of your household, how much hot water you need at once and where it will be installed.

Authors bio

Having a bachelor degree in engineering Charles Farrell chose the way of a writer to share tech tips and his life experience with others. 

He has been creating content about everything for almost 6 years. Charles also enjoys travel and photography.