How do I choose the right water heater size and fuel type for my home?

Short answer

Pick size based on your household’s peak hot-water demand and choose a fuel type that fits your home’s utilities, installation constraints, and operating costs. For storage tanks, match the First Hour Rating (FHR) to your peak demand. For tankless, match the unit’s gallons per minute (GPM) to your simultaneous fixtures at your local temperature rise. Fuel types: electric (simple, higher operating cost in many areas), natural gas/propane (fast recovery, venting and gas line sizing needed), heat pump/hybrid (very efficient, needs space and a drain), and tankless gas (endless hot water if sized and installed correctly).

How to size: tanks vs. tankless

• Storage tanks (FHR): Capacity (gallons) matters, but FHR is the more useful number. It tells you how much hot water the heater can deliver in the first hour of heavy use.
  • Typical starting points: 1–2 people: 30–40 gal; 3–4 people: 40–50 gal; 5+: 50–80 gal. Always confirm with FHR.
  • Gas tanks generally have higher FHR than same-size electric tanks because recovery is faster.
• Tankless (GPM): Size to the maximum number of fixtures you’ll run at once at your required temperature rise.

Quick calculation examples

Target outlet: 120°F
Inlet (groundwater) temp:
- Northern climates: ~40–50°F
- Southern climates: ~60–75°F
Temperature rise = 120 – inlet temp

Fixture flow rates (typical):
- Shower: 2.0 gpm (WaterSense); older heads 2.5 gpm
- Bathroom faucet: 0.5–1.0 gpm
- Kitchen faucet: 1.5–2.2 gpm
- Washer/Dishwasher: intermittent 1–2 gpm

Example (tankless): Two showers + sink in a 50°F inlet area
Temp rise = 120 – 50 = 70°F
Flow = 2.0 + 2.0 + 0.5 = 4.5 gpm
Look for a tankless that delivers ≥4.5 gpm at 70°F rise (likely 150–199k BTU condensing gas).

Example (tank FHR): Morning peak = two showers back-to-back + sink use ≈ 2 x 10 gal + 5 gal = ~25 gal in first 30–40 minutes; add buffer → FHR 60–70+ is a good fit.

Fuel type comparison

• Electric tank
  • Pros: Simple install, no venting, quiet. Often lowest equipment cost.
  • Cons: Slower recovery; higher operating cost where electricity is expensive. Needs 240V/30A circuit.
  • Efficiency: ~0.90 UEF.
• Natural gas tank (non-condensing or power-vent)
  • Pros: Fast recovery, good for larger families. Operating cost is often lower than electric.
  • Cons: Requires proper venting and combustion air; gas line sizing matters.
  • Efficiency: ~0.60–0.70 UEF (non-condensing), up to ~0.80+ for high-efficiency models.
• Propane tank
  • Similar to natural gas, but fuel cost varies by region. Tank rental/refill logistics apply.
• Heat pump (hybrid) electric tank
  • Pros: Very low operating cost; 2–3.5 UEF. May qualify for rebates/tax credits.
  • Cons: Needs ~700–1,000+ cubic feet of space, a condensate drain, and produces cool air/noise.
• Gas tankless (condensing preferred)
  • Pros: Continuous hot water; compact; high efficiency (up to ~0.95 UEF).
  • Cons: Requires large gas line (often 3/4"+), dedicated venting, condensate drain; careful sizing.
• Electric tankless
  • Pros: Compact; no venting.
  • Cons: Very high amperage (often 100–150A total); many homes need panel upgrades. Best for point-of-use.

Step-by-step selection

1. List simultaneous fixtures you typically run at peak. Reduce flows with WaterSense heads if needed.
2. Find your groundwater temperature (use local maps or measure at an unheated tap).
3. Calculate temperature rise and GPM (tankless) or estimate peak gallons in the first hour (tank/FHR).
4. Check home infrastructure:
   • Gas: line size, meter capacity, and venting path.
   • Electric: available breaker spaces and amperage; 240V circuit for tanks; significant capacity for whole-house electric tankless.
   • Space: clearance, drain pan, condensate path (for heat pump/tankless condensing).
5. Compare fuel operating costs, rebates, and upfront budget.
6. Match a model’s spec sheet to your numbers (FHR or GPM at stated temp rise; UEF; venting type).

Tools and materials for planning

• 5-gallon bucket + stopwatch (measure fixture flow rates)
• Thermometer (check inlet temperature)
• Tape measure and flashlight (verify space and clearances)
• Notepad or phone for photos/specs
• Basic calculator or online sizing calculator (ToolStash catalog has flow-rated fixture tools)

Safety and code considerations

• Gas appliances require correct venting, leak-free gas connections, and adequate combustion air. Install CO detectors near sleeping areas.
• Water heaters must have a functioning T&P relief valve piped to an approved drain. Many jurisdictions require an expansion tank on closed systems.
• Use a drain pan and consider a leak alarm. Strap tanks in seismic regions.
• Turn off power/gas and water before any inspection or work. Obtain permits where required.

Tips for best results

• Set temperature to 120°F for safety and efficiency. If you need higher storage temps (e.g., 140°F), add a mixing valve to extend usable capacity.
• Insulate the first 6–10 feet of hot and cold piping at the heater. Consider a recirculation system for long runs (with timer or smart control).
• In hard-water areas, install a scale filter or softener, especially for tankless units.
• Heat pump units work great in basements/garages in warm climates and can help dehumidify.

Common mistakes to avoid

• Sizing tankless by max GPM rating without checking the temp rise chart.
• Ignoring FHR on tank models and buying by gallons alone.
• Reusing improper venting (e.g., single-wall where not allowed, or wrong material for condensing).
• Undersized gas lines or inadequate electrical capacity.
• Skipping permits or local code requirements, including expansion tanks and drain pans.

Budget ballpark (installed, varies by region)

• Electric tank: $900–$1,800
• Gas tank: $1,200–$2,500
• Heat pump hybrid tank: $2,000–$4,500 (rebates can lower this)
• Gas tankless (condensing): $2,500–$5,500
• Electric tankless: $900–$2,000 + panel upgrade ($1,000–$3,000 if needed)

When to call a pro

• Any gas line work or venting changes.
• Electrical panel upgrades or new 240V circuits.
• Adding recirculation lines, condensate pumps, or relocating the heater.
• You’re unsure how to interpret FHR/GPM vs. temperature rise specs.

With the right calculations and an eye on your home’s utilities and space, you can confidently choose a water heater that meets your family’s needs and your budget while staying safe and code-compliant.