Storage Heaters

Storage-type water heaters are still the standard. They are less expensive than tankless heaters, though the highest efficiency models can cost upward of $1,000. They are generally available in 20-80 gallon sizes and are fueled by electric, natural gas, propane or fuel oil. They work by heating a tank of water to a set temperature. When water is used, the tank replaces the water and heats it to the set temperature. Since the heater must maintain the tank water's temperature, standby energy loss occurs.


When to Consider: If you are replacing a tank unit in a household with many simultaneous hot water needs, or if you have a small up-front budget, consider getting a storage tank water heater.

  • Capacity: You need a heater that will provide enough hot water to get you through the day comfortably. Determine this by calculating your peak hour usage: how much hot water your household uses during the hour when the most water is used. The model's first hour rating (FHR), or how many gallons of hot water the heater can supply per hour starting with a tank of hot water, should be within a few gallons of your peak hour usage. The FHR is located on the EnergyGuide label, which is required on all tank heaters.
  • Energy: If saving energy is a priority, look for a water heater with a high energy factor (EF). The number is the decimal equivalent of a percent efficiency. If a unit is .90 EF, it is 90% efficient. The amount of insulation on a tank is also important. suggests looking for a thermal resistance rating (R-Value) between R-12 and R-25.
  • Cost: Storage heaters run $300-500, plus another $300 for installation. Avoid choosing a system based on cost and size. Lower costs up-front can be lost in energy and maintenance costs. Likewise, choosing a unit because it is big enough to cover more than your needs is a waste. If a heater exceeds your needs you will have paid more up-front and will have to pay more to keep all that extra water heated. Consumer Reports found that tanks offering the longest warranties had larger heating elements, thicker insulation and longer anodes (corrosion fighting metal rods). The estimated operating cost per year is located on the EnergyGuide label.