You want to buy a new water heater for your home. That's great! But now you have to decide if a gas or electric water heater is best for you. Here's what you should consider when deciding between gas or electric water heaters.

Initial Cost

Gas and electric water heaters are comparable in the initial price of the unit. Depending on how many gallons you want your water heater to hold, the energy output, and the warranty (if any comes with it), costs will vary between $200 and $1,000. However, the installation cost of a gas water heater may be a bit more expensive if you don't already have a gas line running from your supply to the location where you will store the tank. It can be costly to install this line, so factor the cost of installation into the price of the tank itself.

Supply of Power

If your house is already equipped with a gas line and you use other gas appliances (such as a gas stove or furnace), a gas water heater may be a good fit for you. However, if your home is not yet set up to receive gas, then you would need to install a gas line to your home, if gas is available in your neighborhood. This can be extremely costly and would likely add another utility bill to your monthly expenses. If your home is not already set up to use gas, it would be more cost effective for you to purchase an electric water heater for your home.

Operating Cost

If you already have a gas line running to your house and to the location where you want to store the water heater, then the two options are probably neck-and-neck. So now let's look at the operating cost. The cost of gas and electricity differs from city to city, but in most cases gas costs less than electricity. So if you'd like to save on your monthly bill and you have access to a gas line, a gas water heater may be a better option for you.


Lastly, it's important to consider efficiency when purchasing a new water heater. Though gas costs less than electricity, the amount of gas or electricity needed to heat your home's water may make a difference in the operating cost, longer term.

The energy efficiency of water heaters and other appliances are rated on a standard scale called the Energy Factor (EF) system. This allows consumers to compare appliances based on the same standards. A higher EF rating means that the appliance is more efficient. According to the EF system, an average electric water heater has an EF rating of between 0.75 and 0.95. and an average gas water heater has an EF rating of between 0.60 and 0.70.

The EF system shows us that electric water heaters are considerably more efficient than gas water heaters. So while electricity is more expensive than gas, an electric water heater will use much less power than a gas water heater.

Overall, gas and electric water heaters are pretty even, in terms of the initial cost of the unit. However, if you don't already have a gas line running to your water heater location and you purchase an electric water heater with a high EF rating, then an electric water heater will likely be a better fit for you long-term. If you already have a gas supply and gas is significantly cheaper than electricity in your region, then a gas water heater would be a smart purchase.

Are you in the market for a new tankless water heater? If so, you must make a choice. Do you want your appliance to sit inside or outside your home? It's an important question that you must answer before buying. Here's a guide on the differences between indoor and outdoor tankless water heaters.

Tankless Water Heater

By purchasing a tankless water heater, you're increasing your energy efficiency while reducing the space required to store your device. The energy savings occur because it only runs when your home requires hot water. You're reducing your hot water demand, which in turn lowers your monthly utility bills. Although most tankless units cost more than traditional hot water heaters, you'll save up to 34 percent in hot water usage. You're paying more for the appliance because it uses a high-powered burner to offer a ready supply of hot water on demand.

The operation of these devices is simple. They heat water only as you need it rather than functioning as a permanent hot water storage system. The flow rate of the tankless water heater will determine how much water you need. It'll pass through the burner, changing from cold to hot instantly.

The Facts About Indoor Water Heaters

Indoor water heaters are a sensible acquisition in regions with standard climates. You won't need to spend as much on these devices as outdoor ones. That's because indoor units don't have to withstand the elements the way that outdoor water heaters do.

What you must keep in mind about indoor water heaters is that they'll require space within your home. If you're adding a device to a home that doesn't currently have such an appliance, you'll have to choose a permanent home for it. People who live in tight quarters may lack the space to introduce such a large appliance into their homes.

In addition, you'll need to investigate whether there's room for the accompanying plumbing and electrical connections required to run the appliance. Finally, note that indoor tankless units need ventilation. Otherwise, they'll expel condensation that could cause leaks. So, indoor water heaters provide tremendous utility, but you have to plan carefully if you're going to add one to your home.

The Facts About Outdoor Water Heaters

Outdoor water heaters are easy to install because they require no venting, but that very quality makes them problematic in areas where temperatures drop below freezing. Although tankless heaters typically offer freeze protection, the exposed pipes can still become a problem in chilly weather if they are not insulated. For those who live in warmer climates, these appliances are rugged and durable. This longevity, however, means they'll cost more than other types of water heaters.

The benefits of outdoor water heaters are obvious. You can stick one of these appliances anywhere. As long as you have the plumbing and electricity to connect them to the proper spigots, they'll work well. Since they're outdoors, ventilation isn't an issue, either.

Beyond the price, the only true downside to the outdoor water heater is something beyond your control. Since they're outside, they're susceptible to vandalism. If you don't trust your neighbors, you'll want to add a security camera to keep an eye on your appliance.

Indoor and outdoor tankless water heaters are both great appliances. The one you should choose depends on where you live, how large your home is, and how much you can afford to spend on the device.

In selecting a water heater for your home, size plays a critical factor. You do not want to select a heater that will leave most of your family showering in the cold, nor do you want to waste energy heating more water than your household needs on a given day.

Traditional Water Heaters

Selecting a traditional tank heater starts with storage volume. A small tank that holds 50–60 gallons is ideal for one or two people in the household, a medium tank of 80 gallons works for three to four people, and a large tank for more than four people.

Calculate Your First Hour Rating

Your home's first hour rating (FHR) represents the busiest time of day for hot water use, which is typically for morning showers. A simple calculation determines FHR by assigning 12 gallons per person. Count the number of bedrooms in the home and add one. For this example, a three-bedroom home gives us four people, and multiply that by 12 gallons. The answer is 48 gallons, or a minimum FHR of 48 for this home. Look for the FHR number on the yellow Energy Guide sticker and make sure it's the same or higher.

Find the Highest Energy Factor

Next, you want to find the heater with the highest energy factor (EF) rating associated with your minimum FHR number. The higher the EF rating, the more energy-efficient the water heater will be, which means saving more money on utilities.

Tankless Water Heaters

If you are shopping for a tankless or demand-type water heater, you need to calculate the flow rate and temperature rise to meet your home's needs.

Determine Flow Rate

Start by listing all of the hot water outlets in your home, and add up their individual flow rates. If you have three faucets each with a flow rate of 0.75 gallons per minute and one shower head that puts out 3 gallons per minute, the sum is 5.25 gallons per minute. This number is the household's minimum required flow rate for a tankless heater.

Figure the Temperature Rise

Unless you know the water temperature at your home's point of entry, use 50 degrees Fahrenheit as your baseline. The temperature rise is the difference between the baseline and the desired heated temperature. In most cases, your target temperature will be 120 degrees Fahrenheit meaning a 70 degree temperature rise. However, if you have a dishwasher that does not contain its own heating element, the tankless heater would be set for 140 degrees Fahrenheit, a 90 degree rise.

Consider the Energy Source

Tankless water heaters are typically rated for various inlet temperatures. On average, a gas-powered heater will handle a 70 degree rise at a 5 gallon per minute flow rate, while an electric heater will meet the 70 degree rise at a much slower 2 gallon flow rate. Low flow rates can diminish the hot water temperature that comes out of the most distant faucets or showers. Therefore, consider power source as part of the selection process.

It's always wise to consult with your contractor before making the purchase. This way you are buying the best water heater option available for your home.

Many homeowners are making the switch from a traditional tank-style water heater to a tankless water heater. Some may be doing so out of necessity because their old hot water heater has stopped working, and others may be making an upgrade to take advantage of the benefits that a tankless model can provide. Whether you are simply weighing your choices or you have already made the decision to move forward with the installation of a tankless water heater, it is important to know more about what you can expect from this type of water heater.

The Benefits of a Tankless Model
Many people consider a tankless water heater to be a green alternative to a traditional hot water heater, and there are indeed a few energy-saving benefits associated with these models. A tank-style water heater essentially will maintain a specified number of gallons at a specific temperature in the storage tank, and the unit will continue to heat the water whether you need it or not. You may not draw hot water from the unit all day while you are at work, but it will continue to use energy to heat it. With a tankless model, water is heated on demand. Because of this, energy savings can be considerable. However, the actual amount of energy saved will be based on the type of unit you currently have as well as the demand for hot water in the home.

What Else You Need to Know
You should be aware that a tankless water heater does not mean that you have an unending supply of hot water. It does provide you with a steady stream of hot water, but it can only produce so much hot water at a time. For example, you may take a shower for as long as you want without running out of water, and this is true even if the dishwasher or clothes dryer just finished running. However, if the washing machine, dishwasher and shower are all demanding hot water at the same time, there is a possibility that you may not have enough hot water.

When you are selecting a tankless hot water heater to install in your home, consider the amount of water it can heat at any given time as well as the type of energy used to heat the water. These factors will help you to enjoy the maximum benefits from your new hot water heater.