A water heater is an integral home appliance. When planning a remodel and going through your renovation checklist, consider if installing a new water heater makes sense. How old is your current water heater? Does it meet your needs? Is it space and energy efficient? This may be the perfect time to install a natural gas line so you can replace an electric water heater with a gas one.
Storage tank water heater
Storage tank heaters can be powered by electricity, natural gas, or liquid propane. Gas heaters might be more expensive than electric ones, but they cost about half as much to power. Storage tank heaters have a lifespan of about about 10-15 years.
A 50 gallon electric water heater can cost between $300-$700 and the same size gas powered can range from $500-$1000+.
Tankless water heater
Tankless models are becoming increasingly popular. They heat water on-demand rather than storing hot water in the tank. Because of this they are usually more energy efficient than storage tank heaters. They are also much smaller and more space efficient and can be installed in a crawl space or even outside. Tankless heaters heat water continuously, so you don’t have the same issue of running out of hot water that you might with a tank heater.
Tankless water heaters also have some limitations. They can only generate a limited amount of hot water per minute, so this type of heater may not be able to deliver hot water to more than two outlets at one time. And because hot water isn’t stored at the ready, it takes longer for hot water to come out of the faucet. A tankless water heater can also be powered by electricity, natural gas, or liquid propane. Tankless water heaters have a life expectancy of up to 20 years, significantly longer than storage tank models.
An electric tankless water heater can cost between $400-$700 and a gas powered one can be $800-$1500+.
Hybrid water heater
A hybrid water heater combines technology of an electric storage tank and a tankless water heater in one. It provides continuous hot water while also storing some hot water to be available immediately. They are more energy efficient than standard storage electric water heaters but less efficient than gas heaters. Some are also just as large as regular storage tank heaters. Some offer options of high efficiency, hybrid or conventional electric mode. They have a similar lifespan to storage tank heaters but cost significantly more. They are also not as common as tankless or storage tank heaters.
A hybrid water heater can cost between $1200-$2500+.
When selecting a water heater, you may want to consider the energy efficiency of the model. According to Consumer Reports, heating water accounts for up to 20 percent of the average home’s energy budget.
Water heaters with a better efficiency rating may be more expensive, but would save you money in energy costs in the long run. A water heater with the Energy Star certification has been independently evaluated as an energy efficient product. According to the Energy Star website, an Energy Star rated electric storage tank water heater can save $3,000 in electricity costs over a standard model, over the lifetime of the water heater. An Energy Star gas powered storage tank water heater has a much lower difference with an estimated savings of $360 over a 13 year lifetime. Gas powered tankless water heaters are the most energy efficient, and an Energy Star rated one gives you an estimated $1,700 in lifetime savings over standard storage models.