Pick a size that’s just right. Sometimes, plumbing contractors will oversize water heaters so that they can quickly specify a model they know will keep up with demand. That’s bad news for customers who have to live with those water heaters, because an oversized heater is less efficient and more expensive than an accurately sized one. To make the best selection, purchase the ASHRAE (American Society for Heating, Refrigerating, and Air-conditioning Engineers) Handbook and calculate the peak one-hour draw, following the procedure from the HVAC Applications section. This quantity represents the greatest amount of hot water likely to be required over the course of a single hour. Then find a water heater whose “first-hour rating” exceeds that. Alternatively, several manufacturers provide free software on their websites for sizing water heaters.
Compare the cost-effectiveness of heaters with different efficiency ratings. The actual operating cost for any water-heating application depends on how frequently the heater will operate and on the cost of natural gas. These parameters vary greatly among applications, so we recommend that you estimate the annual operating costs for a few heaters, using a range of load assumptions, and compare them with their first costs. Use our Gas-Fired Water Heater Screening Tool to estimate the simple payback period for gas water heaters based on their efficiency and purchase price.
Use our cost-effectiveness calculators. We offer several calculators to help you make the best decision when replacing or installing a new water heater. Our Gas-Fired Water Heater Screening Tool determines the energy consumption and payback period for standard and ultra-efficient commercial water heaters and compares them with consumption and payback for residential models. For a broad overview of expected annual costs for different water-heating technologies based on your water use, and to compare otherwise similar gas and electric water heaters, use our Water Heater Fuel Costs Calculator. If you already have a general idea about what technology and fuel sources you’re interested in, our Water Heater Economic Comparison Calculator provides a side-by-side economic analysis that compares up-front and annual costs, life cycle costs, and simple payback period. By necessity, these calculators make assumptions to simplify the calculations, so use them for initial screening only. For more accurate performance predictions, conduct a detailed analysis that includes such factors as actual usage patterns, hot water loads, and part-load performance of equipment.
Select a water heater that meets Energy Star specifications. Through the Energy Star program, the US Environmental Protection Agency and Department of Energy have developed a set of specifications for cost-effective, energy-efficient residential gas-fired tank water heaters. Manufacturers test their products against these guidelines, and Energy Star’s Water Heater, High Efficiency Gas Storage for Consumers page spells out the requirements and lists all qualifying products.
Consider the application. Condensing water heaters can provide high energy savings throughout their lifetimes, making them an appealing choice in some situations. Since the exhaust from a condensing water heater has been through a second heat exchanger, it’s low enough in temperature that the drain can be made of inexpensive PVC pipe. In new construction applications, where the drains can be designed specifically for the condensing water heater, an inexpensive PVC drain can contribute to a relatively low-cost installation. However, this technology may not necessarily be cost-effective in retrofit applications given the additional work that may be required to accommodate its exhaust requirements.
If safety is an overriding issue, select a sealed combustion heater. Every year, a few people are injured or killed when carbon monoxide and other products of combustion backdraft into occupied space. Certain water heaters use sealed-combustion technology so they cannot backdraft. Although backdrafting rarely occurs with professional installation—and problems can be minimized by making sure that systems are properly sized and vented, ducts are leak-proof, and carbon monoxide monitors are installed—the peace of mind offered by these kinds of heaters may be worth it for you. Additionally, if backdrafting is a concern, a professional can test building air pressures to determine whether corrections to the system are necessary.