Choosing a water heater, Part II: tankless, electric, gas or hybrid?

In our last article you learned the crucial rating system for first-hour rate (FHR) and the Federal Energy-Factor number (EF). If you're buying a whole new water heater unit for a new home or business, or if you're open to revamping your entire fueling system to save a few extra pennies in the long run, you have a few options of water heaters now. Let's get down to the nitty-gritty…

There are several categories of water heaters used today, and they are as follows:

  • Solar-powered
  • Storage tank
  • Electric heat pump, or hybrid
  • Gas-condensing
  • Tankless, or on-demand
  • Point-of-use

Storage tank heaters are the standard, and the water heater style that most consumers are most familiar with. They usually operate on natural gas or electricity, and last for about 10-13 years. Some measure up to Energy Star standards.

The solar water heaters are the most energy-efficient option on the market today. Cost effectiveness depends on fuel costs just as much as weather, and living in a northern climate, like Wisconsin, can yield lengthy periods of time without sun.

Tankless water heaters save money in that they don't heat the water until it's needed, so there's no storage tank where the water is kept warm at all times.

Electric heat pump water heaters, also known as hybrid water heaters, are the most energy-efficient electric water heater on the market. It's basically adding a heat pump to a regular tank-style electric water heater to heat the water, and that's just how it can be done to a standard tank-style water heater that a homeowner already has. Heat pumps are available to consumers and can be added on to make their water heater a hybrid.

Gas condensing water heaters are the most efficient type of gas water heater when building a condenser into a gas storage tank model or tankless model. Installing this style of water heater can cut your cost of heating by 30%, and provides nonstop hot water at 3-5 gallons per minute.

Instantaneous water heaters, or point-of-use water heaters, are small water heaters, available in both tank and tankless styles that provide instant hot water to a specific sink or shower. They are often used in conjunction with larger water heaters, perhaps older models that tend to run out of hot water sooner than desired.

Tax credits are another important thing to keep in mind when choosing a water heater. Solar water heaters give you the opportunity of a Federal tax credit of up to 30 percent of the cost and installation, applying to both new homes and replacements within older homes. Gas condensing water heaters are also available for a tax credit at 30%. Tankless heaters, on the other hand, are eligible for the same tax credit if it's a replacement within an existing home versus a new construction, which is the same practice for the hybrid heater.


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