With winter in full swing, the last thing you want to have happen is for your water heater to stop working. Unfortunately, water heaters have a mind of their own and are not going to wait until it’s convenient for you before they decide to quit.

When selecting a new water heater, your best bet is to choose one that will not only provide enough hot water to meet your family’s needs but will do so in the most energy efficient way. Energy efficiency is not only a good thing for the environment, it also lowers your operating cost.

So, here are the important things you want to consider when shopping for a water heater:

Energy Source

The energy source you use for water heating can have a big effect on the operating costs. While there are 6-7 different choices, we’ll concentrate on the top two: electric and natural gas. If you don’t already have a natural gas line near the place where you want to locate your water heater, this decision may be made for you due to the extra cost of running a new natural gas line.

From a pure operating cost perspective, a good rule of thumb is that an electric water heater will cost roughly twice what a natural gas one will set you back.


The answer to the question of how long a water heater will last depends on several factors. The higher the quality, the higher the upfront cost. A big factor here is estimating how long you’ll continue to live in your current home.

Typically, the life expectancy of a conventional water heater will be in the 10-15 year range. As an alternative, tankless water heaters can easily last over 20 years.


Before you purchase a water heater, you need to get an estimate of operating costs for each alternative you’re evaluating. When replacing a water heater, you may find that you'll save money in the long run by switching to a different energy source. Contact your utility for current fuel/energy costs, keeping in mind the rule of thumb mentioned above.

The type of water heater you choose will affect your operating costs so you’ll need to factor that into the overall cost. One type of water heater may use a fuel type more efficiently than another type. For example, an electric heat pump water heater typically is more energy efficient than a conventional electric water heater. In some cases, an electric heat pump water heater might even have lower energy costs than natural gas due to higher efficiency operation. So be thorough with your calculations.

If you’re considering a tankless water heater, be aware of the fact this type will result in lower operating costs in the long run. Traditional water heaters keep the water at a pre-set temperature regardless of your water needs. This increases your utility bill over the ‘on-demand’ nature of a tankless one. Since tankless water heaters are higher priced than the traditional variety, a multi-year price comparison is necessary to get an accurate picture.


When it comes to water heaters, size matters a lot. Look at the size of your family and your hot water usage habits. Choosing a water heater that’s larger than what you need means a higher than necessary operating cost. Choosing one that’s too small will save you money but may result in cold showers. Needless to say a larger capacity means higher upfront and operating costs.

Contractor or Do-It-Yourself Installation

Many people choose to purchase their water heater from a big box store and install it themselves because of the apparent lower cost. This may be the best alternative for handymen who really know what they’re doing, as opposed to most weekend types who only think they know what they’re doing.

Other than the quality of the installation work, something to consider is that most homeowners know very little about maintaining their water heaters, which can significantly extend the life span of the equipment. When it comes to making needed repairs and ongoing maintenance, the use of a professional is often the lower cost alternative in the long run.

The Bottom Line

As you can see, selecting a new water heater is a little more difficult than most people think. There are many factors to consider and one must carefully weigh the pros and cons before making a decision you will live with for the next 10-20 years. Both the upfront costs and operating costs must be included in a multi-year calculation to see the true cost of ownership Rather than jumping to a conclusion that may lead to excessive costs and other headaches, perhaps you should consider getting an expert opinion from the folks at South West Plumbing.