Choosing a Water Heater for Your Home

Choosing a Water Heater for Your HomeDid you know that water heating is the second most expensive use of energy in your home? The most expensive is climate control, which accounts for half of a home’s energy use.

Water heating still takes up a staggering 14-18% of energy use. Most everything else is around or under 10%. With World Water Day coming up March 22, now is a good time to evaluate what kind of water heater may be the best option for your home.

Every day, Americans use about 64 gallons of water, leading to heating costs of between $400-600 every year.

There are several different types of water heaters, each with their own pros and cons. Certain ones work better than others based on different factors such as water demand, geographic location, and weather.

Storage Heater

Storage water heaters store up a large volume of water and continuously heat it as necessary to maintain the set temperature. They generally last 10-15 years, but if they aren’t replaced when they should be, they can leave a huge mess.

The cost of the unit is the lowest out of the options, but standby heat loss can add up to a lot of waste energy. Be sure to insulate the tank and pipes to reduce this heat loss.

Tankless Heater

Like the name implies, there is no storage tank for this heater. Instead, a long snaking pipe rests within the heating unit and it warms the water as it flows through.

These units are somewhat pricey, but last upwards of 20 years. The biggest downside is that when there is a high water demand (such as running a washing machine and shower at the same time), the water flow rate can be drastically reduced.

However, an average home can save about $100 per year on water heating over a storage unit.

Heat Pump

About as costly as a tankless water heater, a heat pump model can actually save more money every year. The average family can save about $300 per year on their energy bills.

These heaters are 2-3 times more efficient than a storage tank and last about the same amount of time. However, they are better suited to warmer climates as they output cold air, which would be taxing on heating systems.

Solar Heater

Solar water heaters are the most expensive to install and are 1.5 times more efficient than storage water heaters.

They last about 20 years, but the biggest drawback is that you may need a backup system for cloudy days or when there is high demand.

Tankless Coil & Indirect Heater

These heaters are cheaper to install than most of the alternatives and they have very low maintenance costs, but they only last about 10-11 years and can be very inefficient in warm climates.

Choosing a Heater

Ultimately, you want to look at what your peak demand is for water consumption, as this will help determine if an alternative system will work well for you.

The greater the efficiency factor (EF), the bigger the savings. Things like standby and cycling losses drop the EF, so insulate the tank (if possible) and any pipes to ensure the greatest retention of heat.


About Us: Source Power & Gas is a Texas based retail energy provider with retail operations in the Texas, Delaware, Illinois, Ohio, Maryland, New Jersey, Pennsylvania, and Washington D.C. markets. We pride ourselves on providing both competitive rates and exceptional customer service to all our customers – from residential consumers to the largest commercial and industrial clients. Learn more about us by visiting or by following us on LinkedInFacebook and Twitter.