As with any purchase, balance the pros and cons of the different water heaters in light of your particular needs. There are numerous factors to consider when choosing a new water heater. This publication has already described different system configurations. Some other considerations are capacity, efficiency, and cost.
Although some consumers base their purchase on the size of the storage tank, the peak hour demand capacity, referred to as the first-hour rating (FHR) on the EnergyGuide label, is actually the more important figure. The FHR is a measure of how much hot water the heater will deliver during a busy hour, and it is required by law to appear on the unit’s EnergyGuide label. Therefore, before you shop, estimate your household’s peak hour demand and look for a unit with an FHR in that range.
Gas water heaters have higher FHRs than electric water heaters of the same storage capacity. Therefore, it may be possible to meet your water-heating needs with a gas unit that has a smaller storage tank than an electric unit with the same FHR. More efficient gas water heaters use various nonconventional arrangements for combustion air intake and exhaust. These features, however, can increase installation costs.
Once you have decided what type of water heater best suits your needs, determine which water heater in that category is the most fuel efficient. The best indicator of a heater’s efficiency is its Energy Factor (EF), which is based on recovery efficiency (i.e., how efficiently the heat from the energy source is transferred to the water), standby losses (i.e., the percentage of heat lost per hour from the stored water compared to the heat content of the water), and cycling losses.
The higher the EF, the more efficient the water heater. Electric resistance water heaters have an EF between 0.7 and 0.95; gas heaters have an EF between 0.5 and 0.6, with some high-efficiency models around 0.8; oil heaters range from 0.7 to 0.85; and heat pump water heaters range from 1.5 to 2.0. Product literature from manufacturers usually gives the appliance’s EF rating. If it does not, you can obtain it by contacting an appliance manufacturer association (see Source List).
Another factor uppermost in many consumers’ minds is cost, which encompasses purchase price and lifetime maintenance and operation expenses.
When choosing among different models, it is wise to analyze the life-cycle cost—the total of all costs and benefits associated with a purchase during its estimated lifetime. More information on conducting lifecycle cost analyses is available from EREC.
Units with longer warranties usually have higher price tags, though. Often, the least expensive water heater to purchase is the most expensive to operate.