Gas Water Heaters: Understanding Your Options

If your gas water heater is nearing its end of life—typically after 10 years—it’s time to think about replacing it. Ideally you want to do this before it breaks and leaves you with no hot water, an expensive repair bill, and a headache.

There are several types of gas water heaters, each with their own pros and cons to consider. Choosing a water heater can be impacted by your budget, how your home is set up, and how you typically use hot water. Regardless of which type will work best for you, there is always an efficient option available.

Storage Tank Water Heater

How it works:

Water is heated and stored in a tank until its ready to be used. Once it’s used, the tank refills.

Pros:

• Least expensive purchase cost
• Easiest swap out, in most cases

Cons:

• Susceptible to standby heat losses
• Highest operational costs

The bottom line:

Most households are used to storage tank water heaters. It is most likely the easiest and cheapest to swap out, but it’s also the least efficient type of water heater available (though improvements have been made to tank insulation in recent models). Not all storage tanks are created equal. To get the most efficient model, look for the ENERGY STAR^® certification and a Uniform Energy Factor (UEF) of 0.64 or greater. As a rule of thumb, the higher the UEF, the more efficient the unit.

Indirect Water Heater

How it works:

Water is circulated through the heat exchanger in your home’s main heating system. Heated water flows into an insulated storage tank where it waits to be used.

Pros:

• Energy savings achieved when used in combination with a high-efficiency boiler and well-insulated tank

Cons:

• Requires a storage tank, which may be subject to standby heat losses

The bottom line:

An indirect water heater, if used with a high-efficiency boiler and well-insulated tank, can be the least expensive means of providing hot water, particularly if the heat source boiler is set to "cold start." As well, energy stored by the water tank allows the heating system to turn on and off less frequently, which saves energy.

Condensing Water Heater

How it works:

Similar to a condensing boiler, heat from exhaust that would normally be vented out of the home is leveraged, and in this case, used to heat water.

Pros:

• Highly efficient method of heating water
• Most efficient tank style

Cons:

• Higher upfront purchase cost
• Requires additional venting and drainage configuration

The bottom line:

A condensing water heater is a close relative to the conventional storage tank water heater, but it’s much more efficient. You’ll enjoy plenty of hot water and lower energy costs. Look for the ENERGY STAR certification and a UEF of 0.80 or greater.

Tankless/On-Demand Water Heater

Water is heated as it is needed, rather than pre-heated and stored for later use (which is the case with traditional tank water heaters).

Pros:

• Minimizes energy waste from standby heat losses
• 8-34% more efficient than storage tank water heaters
• Never runs out of hot water in single-use situations

Cons:

• Higher upfront purchase cost
• Lower flow rate—output limited to 2-5 gallons per minute

The bottom line:

A tankless water heater completely eliminates the issue of heat loss and energy waste associated with tank water heaters, which means big savings. A tankless model will provide an unlimited amount of hot water for a long shower or filling a big tub. However, when hot water is demanded in multiple places at once, like showers taking place simultaneously, or running the dishwasher and showering at the same time, the limited flow rate of a tankless water heater may be an issue. In that case, multiple water heaters may be required. When shopping for a tankless model, look for the ENERGY STAR certification and a UEF of 0.87 or greater.

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