There are numerous water heater types on the market, each fulfilling a particular niche or need. However, these types aren’t created equally. When you’re wondering how to choose the best unit for your family size and available utilities, look to this water heater buying guide for dependable advice or use it as a jumping-off point when asking a consultant for help purchasing a unit.

Storage Tank Water Heaters

Storage tanks are the standard type most people know. Water sits in an insulated tank and stays hot until you use it. They come in electric, gas, and propane versions.



Choose a tank if you want hot water ready immediately, have space for installation, need to supply multiple fixtures at once, experience periodic power outages lasting more than a few hours, or prefer familiar technology with lower upfront costs. Tanks work for most homes because they're reliable and affordable to maintain.

Tankless, On-Demand Water Heaters

Tankless models have no storage. Water heats as it passes through the unit's heat exchanger, which means they only work when you turn on a fixture, like a sink faucet or shower.

Choose tankless if you want lower energy bills, space is tight, you need back-to-back showers without waiting, you don't experience prolonged power outages, or you don't mind higher upfront costs. Just know that tankless units can't supply unlimited hot water to multiple locations at once. They have flow limits, typically 2-8 gallons per minute. If you regularly run showers, dishwasher, and washing machine simultaneously, a single tankless unit might not keep up.

Natural Gas Tankless Water Heaters

If your home currently uses natural gas, then replacing your old gas tank water heater with a natural gas tankless water heater might be your best choice for comfort and value. These units are about the size of a small suitcase, and you can install them inside or outside your home. Long-lasting and super efficient. Keep in mind that a plumbing professional should always complete the installation of natural gas tankless water heaters.

Propane Tankless Water Heaters

Like the natural gas models, liquid propane tankless water heaters can take advantage of existing gas lines for a compact hot-water solution. Propane gas provides a bigger boost in British Thermal Units (BTUs) per dollar than electricity can, so propane tankless water heaters can double the output of hot water when compared to an electric model. Most models can support two to three appliances simultaneously, so your dishwasher, washing machine and shower can all have enough hot water to function. These units typically require professional installation due to safety issues.

Tip: Check out our Tankless Water Heater Buying Guide for tips on how to find the right tankless hot water heater.

Water Heaters for Mobile Homes

Mobile homes need HUD-approved units designed for these applications. Gas models require the right fuel type (propane or natural gas) and access configuration (inside or outside). Measure carefully because mobile home doors are smaller than standard residential doors. Again, we recommend consulting a plumbing professional for installation.

Commercial Water Heaters

Restaurants, hotels, and laundromats need commercial units with bigger tanks (250+ gallons), heavy-duty parts, and the ability to handle constant use. Most run on gas for faster recovery. These aren't for homes—they're built for business demands.

First Hour Rating

This number matters more than tank size. First hour rating (FHR) shows how much hot water you get during peak use. A 50-gallon tank might deliver 70 gallons in the first hour because it keeps heating while you use water. Find the FHR on the EnergyGuide label and match it to your busiest hour..

Sizing Tankless

Tankless sizing works differently. You need to add up the flow rates of everything you'll run at once. A shower uses about 2.5 gallons per minute, a dishwasher uses 1.5 gallons per minute—that's 4 gallons per minute total needed.



Cold climates need bigger units because incoming water is colder. Heating 40°F water to 120°F takes more energy than heating 70°F water to 120°F. A unit that works fine in Florida might struggle in Minnesota.