Hot Water Tank

The cost of heating water consumes almost 20 percent of your household budget, second only to what you spend on heating and cooling your home. And if you've been spending more time at home because of the pandemic, it's likely that your usage and costs have gone up. Despite this expense, water heaters are typically ignored until they break, leaving you with no hot water and, possibly, a flooded basement.

If your water heater is nearing the end of its useful life and you're thinking of replacing it before disaster strikes, you'll be happy to know that you have better choices, thanks to federal regulations that require water heaters to be more energy-efficient. New storage tank water heaters are required to operate more efficiently, and tankless (on-demand) water heaters are even more efficient than that.

Typically, homeowners replace their old water heater with one of the same type that runs on the same fuel—natural gas or electricity. Switching from a tank water heater to a tankless unit can be expensive because it requires you to retrofit your plumbing and possibly your electrical system. But if you're building a new home or adding to an existing one, installing a tankless water heater may make economic sense.

Tank water heaters typically hold 40, 50, or 55 gallons or more. The size you buy depends on the number of people living in your home and your peak water usage. A family of four, for instance, might take several showers, run the dishwasher, and wash a load or two of laundry in an average day, totaling 100 gallons of hot water or more. But that doesn’t mean that household needs a 100-gallon storage tank.

For storage tank water heaters, it's important to consider the first-hour rating, which is the number of gallons a water heater can deliver in an hour starting with a full tank. You’ll find the FHR on the EnergyGuide label.