Pros and Cons of Different Types of Water Heaters

Water heaters are hardworking appliances all of us count on for bathing, cooking, laundry, and other household activities. It’s also an appliance most of us rarely think about until something goes wrong. For some people, finding out they need a new water heater means taking whichever tank the local plumber has available but that’s not the best way to find the right water heater for your home. 

If you were satisfied with your old water heater’s performance, you may just decide to replace it with a similar model. Installation costs will likely be cheaper but there are other things to consider. 

The cost of heating water consumes about 18% of the average household energy budget, second only to heating and cooling costs. When it's time to replace your water heater, energy-saving options are readily available due to federal regulations that mandated more efficient gas and electric tank models. Water heater technology is continually changing and there are more options to choose from than ever before. 

Factors to Consider for a New Water Heater

If you’re in the market for a new hot water heater, the Department of Energy recommends that consumers consider several factors including fuel source, size, energy efficiency, and installation costs. Each type of water heater has a number of pros and cons to consider. 

Storage-Tank Water Heaters

Conventional storage-tank water heaters are the most common type of water heaters found in homes throughout the United States. Tank storage water heaters have a 30-50 gallon insulated water tank to store hot water until needed. 

Attached to the top of the storage tank is a pipe that helps deliver hot water throughout a home. Tank storage water heaters can be fueled by gas or electricity. Gas water heaters typically cost less to operate than their electric counterparts. 


  • Lower purchase price
  • Come in a variety of sizes
  • Efficient in all types of climates
  • A high flow rate means you can wash dishes, do laundry and run a bath all at the same time.
  • Since they’re very common, installation, repairs, and maintenance costs are relatively low.
  • When they are gas-powered, they continue to function during a power outage.


  • Higher utility costs
  • Storage tanks are bulky.
  • Leaks are common as units age.
  • Need ongoing maintenance

Tankless Water Heaters

Tankless water heaters, also known as on-demand water heaters, are powered by electricity or gas. Through the use of high-powered burners, water is heated quickly and delivered on-demand. If there are long runs from the water heater to kitchen and bath faucets, installing point-of-use tankless water heaters is an option. estimates that the average household can save at least $100 dollars a year with an Energy Star certified tankless water heater. Over time, a tankless water heater saves significant energy, but upfront costs are often considerably higher than traditional tank storage heaters. Rebates and tax credits can lower the cost of installing a tankless model.


  • Energy efficient
  • Long lifespan
  • Space-saving design
  • Eliminates the possibility of leaking or burst water tank
  • Both electric and gas models are available


  • More expensive than conventional tank models
  • Higher installation costs
  • May need multiple units to adequately supply a large household

Heat Pump Water Heaters

Most homeowners who have heat pumps use them to heat and cool their homes. But a heat pump can also be used to heat water -- either as a stand-alone hot water system or in combination with the heating and cooling system. 

Also known as hybrid water heaters, heat pump water heaters are designed to work without directly generating heat. By using the heat in the ground and surrounding air, very little fuel is used to heat the water resulting in significant energy savings. 


  • Energy efficient
  • Environmentally friendly
  • Low maintenance


  • Work best in climates where temperatures stay between 40-90 degrees
  • Expensive to purchase and install
  • Most require at least 1,000 cubic feet of space to operate safely and at optimal efficiency
water heaters

Solar Powered Water Heaters

Solar water heaters rely on the power of the sun to operate. They work by using roof-mounted panels that transfer energy from the sun through a closed-loop system that connects to the water tank, which then warms the water. 

Solar water heating systems almost always require a backup system for cloudy days and periods of increased demand. Rebates and tax incentives can reduce the cost of purchasing and installing a solar-powered water heater.


  • Energy efficient
  • Environmentally friendly
  • Low maintenance
  • Backup heaters ensure you won’t run out of hot water
  • Long lifespan


  • High upfront costs
  • Performance is dependent on climate

Condensing Water Heaters

This type of heater funnels heated exhaust from the natural gas system and uses it to heat the water, which is held in a tank much like a conventional tank system. If your home uses primarily natural gas as its energy source, these heaters may be a good option. 

High-efficiency condensing water heaters are designed to transfer and retain more heat into the water than a conventional gas water heater. This reduces the amount of wasted heat and reduces total energy use.


  • Energy-efficient for natural gas users
  • Reduced carbon footprint
  • Hot water on demand
  • Long lifespan


  • Expensive
  • Corrosion can be a problem
  • Not the best option for homes that don’t run on natural gas

Consult with a Professional When You Need a New Water Heater 

There have never been more types of water heaters for homeowners to consider. With hundreds of models to choose from, selecting the right one can be complicated. Consulting with an experienced plumber can help you determine the best option for your home and budget. 

Replacing a hot water heater can be an expensive project. A new unit along with proper installation can cost several thousand dollars, particularly if you switch to a different type of water heater. No matter what type of water heater you choose, it’s important to have a professional licensed plumber do the installation. 

Hot water heaters are complicated and can be dangerous, so DIY installation is never recommended. In addition, if a water heater is installed incorrectly, or fails to comply with local codes, your manufacturer’s warranty may be void. Some municipalities allow unlicensed individuals to install water heaters, but they still require permits and safety inspections.

If you need water heater services in the Los Gatos area, call Simply Green Plumbing, Sewer & Rooter at (408) 716-1686 or contact us online to schedule an appointment. We offer a full range of water heater services including installation and replacement, repairs, and routine maintenance. We can help you upgrade your home with a tankless water heater for better performance and energy cost savings.

Our technicians have over 30 years of plumbing experience. We understand that plumbing emergencies can happen at any time, that’s why we offer emergency plumbing services at no additional cost.

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