Question:

I need to replace my water heater. What features should I look for in choosing one?

Answer:

There is a wide range of prices and features in water heaters. Simple 50-gallon electric water heaters range from $110 to $600. Heat pump water heaters will cost $700 to $1,500. Features that can affect cost and performance are described below.

Warranty

Regardless of the construction or features of a water heater, longer warranties drive up the price. Typically, electrical components are guaranteed for one or two years. Tank warranties range from 4 years to lifetime.

Tanks

There are currently four types of tanks on the market. Most common is steel with a "glass" enamel finish. Newer products include concrete tanks, fiberglass tanks, and steel with a plastic liner.   Fiberglass and concrete will not rust and are guaranteed not to leak for life. These are expensive tanks however. They are at the top on the price range.

Steel tanks are all the same. I question whether the plastic lined steel tanks are superior to the standard steel tank. Corrosion is typically found where the tank meets up with the fittings. The plastic liner does not prevent this. The best protection for a steel tank is a good anode rod. The anode rod prevents electrolysis from occurring. The anode rod will deteriorate over time. A steel tank will theoretically last forever if the anode rods are replaced before they completely deteriorate. Is replacing the anode rod a task you want to take on every 5 years or so?

Self Cleaning Features

Several manufacturers produce cold water inlet tubes that stir up the water. This is intended to keep sediment from settling in the tank. I don't have any independent confirmation that these things work, but it sounds like a good idea.

Electrical Components

Electrical thermostats and heaters: I do not have any information that suggests one manufacturer has higher quality electrical components than another. A longer warranty may be an indicator, and it may not. These components are inexpensive to purchase and easy to replace.

Energy Efficiency

For standard electric water heaters, the most typical upgrade is extra insulation. Standard tanks are insulated to R-16; better tanks have R-20 to R-25 insulation. Heat trap fittings on the cold water inlet and hot water outlet also reduce heat losses. Both of these upgrades are available on all but the least expensive models. Remember to compare the energy cost for different models using the yellow Energy Guide label. Also check the listing of the most efficient water heaters included below.

Heat pump water heaters can cut your electric water-heating bill in half. However, they are expensive and require additional maintenance. Examine this option in detail before you make a purchase.

Following are links to information about some of the features discussed above:

1. Concrete-lined water heaters
   
   
2. From the American Council for an Energy-Efficient Economy (ACEEE), Water Heating. The ACEEE also publishes the Consumer Guide to Home Energy Savings, which contains a list of the most energy efficient water heaters.
   
   
3. Heat Pump Water Heaters—Residential (pdf file), Washington State University Energy Program, 2003.
   
   
4. Residential Heat Pump Water Heaters (pdf file), U.S. Department of Energy Federal Energy Management Program, 1995.

My own observations on price:

1. All of the major manufactures have a very low-cost water heater they sell to discount hardware stores. This product will not be listed in manufacturer catalogues. It is a product developed especially for the discount retail market.
   Cost: $120 to $140.
   EF for a 50 gallon = .86
   Minimal warranty, 1 year parts, 5 years tank.
   2 inches foam insulation. It may or may not have heat trap nipples. It may only have a single heating element.
   
   
2. The next increment only provides a modest upgrade.
   Cost: $140 to $180.
   EF for a 50 gallon = .88
   Warranty, 2 years parts, 5 year tank
   2 inches foam insulation.
   Heat trap nipples.
   Two heating elements.
   
   
3. Upgrade with a few additional features.
   Cost $180 to $280
   May include some of the following features, but not all.
   Upgrade EF to .93, up to R-25 insulation.
   Turbulent cold water input
   Longer warranty, 2 year parts, 6 to 10 year tank
   Higher input heating elements
   Plastic liner for a steel tank
   
   
4. Upgrade with many features
   Cost $250 and up.
   2 year parts and 10 year tank
   Many the features listed under #3.
   
   
5. Exceptional Designs:
   Cost $400 to $650

Wholesale cost is likely to be only slightly less than the retail price for the basic models (listed as 1 and 2 above)—I would guess only a few percent. The difference between the wholesale and retail price is expected to increase as the cost of the water heater increases. This provides the retailer incentive to stock and sell the more expensive equipment.

Additional Observations On Durability & Warranties

The DOE Technical Support Document, "Energy Efficiency Standards for Consumer Products," lists the average life of a water heater:

Electric Storage	10.10 years
Gas Storage	13.86 years
Gas Instant	15 years
Oil	11 years

Providing routine maintenance can extend tank life. Cleaning out the sediment and replacing the anode rod when needed will prolong the life of the tank.

Tank failure occurs most rapidly where two dissimilar metals meet and electrolysis is quickened, for example, where a brass fitting is attached to a steel tank. There are a number of methods manufacturers employ to reduce this effect. Steel fittings are used with steel tanks. Plastic fittings or plastic coated fittings are used to eliminate or reduce this effect. The magnesium or aluminum anode rod prevents corrosion of the tank and fittings. It corrodes slowly to reduce the effect of electrolysis on other components. Boch and Vaughn have addressed the problem of tank corrosion by using tanks made of concrete. Marathon uses a plastic tank. These tanks will not corrode and should provide a much longer tank life. This feature comes at a very high cost.

Electrical components may fail at a faster rate than the tank itself. The warranty for electronic components is rarely more then 2 years while tank warranties can be 5 years to a " lifetime."

Manufacturers list a number of components that are advertised as items that extend the life of the equipment. I do not have independent confirmation that any of these items provide longer life.

• A second anode rod
• Plastic fittings
• Plastic liners for steel fittings
• Plastic linings for steel tank
• Turbulent cold water inlet tubes that reduce sediment build up
• Low density heating elements
• Plastic tanks
• Concrete tanks

Water heater life can be a local problem. The worst case I have encountered is Butte, Montana. The water there is high in sediment, and has a very low pH. Water heaters last only 3-5 years. Because of this I recommend that you do some independent research in your area. Ask a few local plumbers how long the tanks last and the typical causes for failure

There was a recall on a large number of water heaters built in the early- to mid-90s. This recall is focused on water heaters that used a particular type of plastic cold water inlet or "dip" tube. A number of manufacturers are affected. I do not expect this to be a problem in the future. The manufacturers affected have changed the materials they have selected for this part.

Factory warranties typically only cover the cost of parts or equipment. They do not cover the cost of labor. This is the installer's or consumer's responsibility.

Long warranties may or may not be associated with a change in the features of the equipment. In some cases the manufacturer will include some of the life-prolonging features on the long-warranty equipment. In other cases the manufacturer simply increases the price of the equipment to cover the extended liability.

Additional Resources:

1. Energy Efficient Water Heating: Purchasing a New Electric Water Heater (481K Adobe® Acrobat® .pdf), Western Area Power Administration Energy Services and Washington State University Extension Energy Program, Updated Spring 2004.
   
   
2. Wilson, Alex. "Consumer Guide to Home Energy Savings," c1998, p145-170.
   
   
3. Radford, Bruce W. "Water Heater War," Public Utilities Fortnightly, March 15, 1998, p6.
   
   
4. "CEC Focus Group Considers Systems Approach, Ratings for Residential Water Heating," Energy Design Update, April 1998, p10.
   
   
5. "Heating Performance Evaluation of a Gas Combo Heater in a Contemporary Research House," Gas Technology Institute.
   
   
6. "Utility Benefits," Marathon Water Heaters.
   
   
7. Hiller, C.C. "Water Heater First-Hour Rating vs. In-Field Performance," ASHRAE Trans. 1996, Vol. 102, Part 1, No. AT-96-18-4, 1054-1057.
   
   
8. Abrams, D. W. "Field Test Results From Residential Electric Resistance Water-Heating Systems," ASHRAE Trans., 1998, Vol. 104, Part 1B, No. SF-98-31-1, 1843-1851.