Water heaters account for up to 25 percent of the utility bills in most homes, according to the U.S. Department of Energy. They are second only to heating and cooling as a major cost. While the newest generation of energy-efficient water heaters can make a big dent in these bills, it can get complicated to sort through manufacturers' competing claims. There are so many models that, not surprisingly, we found that many water-heater reviews, as well as surveys of builders and contractors, tend to rank brands rather than specific models.
Overall, we found the best water-heater reviews at ConsumerReports.org and Fine Homebuilding magazine. Both publications offer a thoughtful analysis of all types of water heaters, including solar, tankless and the newest technologies: gas condensing and hybrid electric water heaters. The surveys of builders and contractors at Builder Online, J. D. Power and Associates as well as the editors at Contractor magazine and the Journal of Light Construction also review newer brands. We also encountered many insightful water-heater reviews from plumbing contractors and homeowners at major retail sites such as Amazon.com.
Buying a new water heater doesn't have to be a nightmare. Experts say the most important thing is to figure what you want and need in a unit before you start shopping. For instance, if your priority is reducing your carbon footprint and cutting future utility bills, you can choose among more energy-efficient types than ever. Solar water heaters are still the ultimate in energy saving. These units offer the best tax rebates and incentives -- including a 30 percent federal tax credit on the installed cost (with no cap on the total cost).
Hybrid hot water heaters, another avenue, use heat-pump technology to boost energy efficiency. They are the only type of electric water heater that earns Energy Star certification. This means the installed price can be offset by a 30 percent federal tax credit ($1,500 cap) as well as state "cash for appliances" rebates under the federal stimulus recovery program. Other state and local rebates and incentives also often apply.
Contrary to popular belief, gas water heaters cost even less to run than hybrid water heaters. The newest, most efficient models use condensing technology to boost thermal efficiency. (Thermal efficiency is a measure of the amount of fuel actually converted to hot water rather than wasted.) Condensing technology can be used to boost the efficiency of tankless water heaters, and it can also boost the efficiency of gas storage-tank water heaters (which cost much less to install in an existing home).
Fuel preferences aside, the editors at ConsumerReports.org also suggest looking for water heaters with a 12-year warranty. Water-heater installation prices can vary in different parts of the country, so experts suggest checking with a trusted local plumber prior to any purchases. Once you've narrowed your choice to a few models, be sure to check dimensions to be sure the water heater will fit in your space and that your current plumbing and wiring will be compatible. If you have to install a bigger gas line, bigger water lines or new vents, installation costs will climb.