Experts say to consider the following when shopping for a water heater:
- Check for damage to the packaging. This may seem obvious, but Fine Homebuilding says water heaters are easily damaged in shipping, so it's unwise to accept a water heater whose packaging looks dented or broken. Owners recommend checking a water heater for dents after delivery but before installation. (This may seem obvious, but some owners who had professional installation complain that the installer showed them the dent only after the installation was complete.)
- Consider repair parts and service. Owners and contractors complain frequently about difficulty in obtaining parts, which can delay repairs. Check with your plumber to be sure you're getting a water heater that's easy and cost-effective to maintain and repair. A long warranty is no guarantee of good warranty fulfillment.
- Factor in the cost of installation. Storage-tank water heaters usually cost $200 to $400 to install, but switching fuel types can increase the cost. In a Consumer Reports survey, owners said they paid an average of $1,200 to have a tankless water heater installed due to additional plumbing and electrical modifications that were needed. Add-on heat pump water heaters and point-of-use water heaters that plug into a regular outlet can be do-it-yourself projects, as can some -- but not all -- solar water heaters.
- Consider rebates, low-interest loans, tax credits and other incentives. The federal income tax credit is only one of many incentives available for energy-efficient water heaters. Before deciding that an efficient water heater is unaffordable, check the incentives available in case they offset the higher cost.
- For a standard tank-type water heater, proper insulation reduces standby losses. If you are buying a gas-powered water heater, 2 inches of insulation is better than a single inch. Electric water heaters are more energy-efficient with 2.5 or 3 inches. The length of the warranty is often a clue to insulation thickness, but the manufacturer's specifications should also tell you.
- Labor costs aren't usually covered for more than a year. The warranties on some budget models may not cover labor costs even that long. At any rate, reviews say to be cautious about depending on a warranty, since most warranties aren't transferable to a new owner. Good customer service and quick repair parts are more important. Even if you have a long warranty, reviews say regular maintenance is important, especially if you have hard water.
- If you're replacing a tank water heater, the easiest replacement will be a similar tank water heater. Changing types can result in more expensive refit costs. Those costs may eventually be recouped by energy savings, but you'll need to do some math.
- Flow rate of hot water from a tankless system is greatly affected by the temperature of your groundwater. The warmer your groundwater, the better the flow rate. Homes in colder climates will need a larger system to get an adequate hot-water flow rate. The average groundwater temperature in the U.S. is about 50 degrees Fahrenheit. Most people like shower temperatures of between 105 degrees and 120 degrees, so your groundwater temperature would need to be raised by 60 degrees to 75 degrees.
- Installation of a tankless water-heater generally works better for new construction. Retrofitting may involve installing new gas pipes, new plumbing and other changes.