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Which Water Heater To Choose? 4 Scenarios To Guide Your Decision

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Unless you're an experienced home improvement buff, you may be completely stumped as to what kind of water heater you should buy for your residence, either as an initial installation in a custom home or as a replacement for a failed old unit. The fact that there are several categories to choose from -- including traditional storage water heaters, tankless water heaters, heat pump systems and even solar systems -- only makes the decision tougher. But you can shorten the list by figuring out which properties of a water heater matter most to you. Here are four scenarios that might help dictate your final choice.

1. You're Short on Space

How much room in your home can you actually spare for a water heater? The typical scenario has a storage water heater taking up an entire storage space -- space you might need or want for other purposes. Heat pumps require a significant amount of clearance, so they can pull heat out of the surrounding air. If you really want a water heater that makes the smallest possible footprint, consider a tankless water heater. These units can be about the size of a suitcase, because they simply don't require a bulky water storage receptacle. 

How much space a solar water heater takes up will depend on what configuration you select. While these systems typically contain heated water in bulky storage tanks, in some of them, the tank is positioned alongside the solar collectors up on the roof. This would obviously be the most space-efficient approach, provided that your roof can bear the extra weight. Otherwise, you'll have to find space for the storage tank somewhere in your home. To make matters worse, you may also need a secondary (traditional) storage water heater to take over when there's insufficient sun to power the solar heater.

2. Initial Money Is Tight

Many homeowners' water heater options are understandably limited to whatever they can afford to install. You'll find that storage water heaters cost considerably less to buy and install than fancier technologies -- in fact, you may be able to get one new for as little as $200 (not counting installation, which is a fairly straightforward affair). Solar water heaters are by far the most expensive installation option, ranging from $6,000 to $17,000 for a professional installation. In the middle of the field, tankless water heaters and heat pumps cost several hundred dollars more than storage water heaters, but they still weigh in at a mere fraction of the cost of a solar setup.

3. Energy Efficiency Takes Top Priority

The more energy efficient your water heater is, the more money you'll save over time. Traditional storage water heaters score the lowest in this department, since they're pretty much "always on" to provide hot water on a moment's notice. Tankless water heaters are a smart choice if you're looking to reduce your utility bills. These units can operate up to 30 percent more efficiently than storage water heaters, because they only heat water on demand instead of working overtime to keep an entire tankful of water at a certain temperature.

Heat pumps can deliver up to three times more energy efficiency than your standard storage water heater, provided that the climate in your area ranges  from 40 to 90 degrees Fahrenheit, the optimal conditions for this kind of heater's operation. For sheer energy efficiency, however, it's impossible to beat a solar water heater, since the energy you're using costs you nothing -- but only when your environment offers a reasonable amount of sunlight.

4. You Value Versatility

Versatility can mean different things to different homeowners. For instance, heat pumps can serve as standalone water heating units, or they can function as part of an integrated home heating and cooling system. On the other hand, a heat pump water heater will function less effectively once temperatures drop below 40 degrees Fahrenheit. A traditional storage water heater works equally well at all temperatures, so it might make a more versatile all-year option for certain climates.

Ultimately, there's no flat-out wrong choice when selecting a water heater, as long as you choose a good model from a reputable maker. But the more you think about your particular needs, the clearer your choice will become, especially after consulting your local contractor. Good luck!