Best Water Heater Reviews of 2023

There are many different types of water heaters on the market. Knowing how to buy the best water heater for your home isn't easy. It requires an understanding of the pros and cons of each type and technique. Add in local and national rebates for energy savings, and the decision to replace your water heater with newer or different technology becomes more difficult than just deciding to go with electricity or gas.

The latest "fad" (if we can call it that) is the installation of tankless hot water systems that provide on-demand hot water throughout the house or from local taps or appliances. However, as we'll show you — it's not always the best water heater choice. Analyzing the pros and cons of each technology will help you make the right decision. We also recommend specific products and ranges based on our experience and knowledge of products and technologies, manufacturers, reputations and their warranties.

Best Type of Water Heater

We can make some recommendations for each of the different types of hot water systems. The best water heater should meet your needs and the requirements of your home. For this article, we plan to stick with residential water heaters. These include electric and gas models, tank and tankless. It also includes hybrid electric or heat pump styles.

After we've made our recommendations, we'll review the pros and cons of each to help you decide on the best water heater to install or replace in your home. This can also help you decide whether to change from one style or power supply to another.

Best Electric Water Heater (Tank Type)

Rhubarb 50 Gallon Performance Series (No Demand Response)

Rheem Performance electric tank water heaters range in size from 20 to 60 gallons. They also come in tall, medium and short styles. They have a Uniform Energy Factor (UEF) of 0.92 – 0.93. These models don't complicate any fancy electronics or "smart" systems. This keeps costs down — and it also lets you heat water without being at the whim of the power company turning off electronics. The Rheem demand response system does just that. Connected to the grid, it allows your electric company to temporarily turn off your water heater during peak hours.

A typical 50-gallon tank might cost as little as $519. That 50 gallon tank provides 61 gallons of hot water for the first hour. You also get a 6-year limited warranty.

Of course, if you want those bells and whistles (we don't), you can of course upgrade to their Performance Plus, Platinum or Gladiator line. In addition to providing demand response technology, these technologies include WiFi capabilities and application control. This lets you do more with your water heater…but do you really want more of something that will break?

Best Gas Water Heater (Tank Type)

AO Smith Signature 50 Gallon Tall

We think the AO Smith Signature 50 Gallon Tall Model is our best gas water heater. It's perfect for families of 5 or more and puts out 50,000 BTUs. It provides a whopping 81 gallons (or more) of hot water in the first hour. It also has an electronic gas valve for precise temperature control. The control also works without the need for an external power source.

While not a smart water heater, the AO Smith Signature 50-gallon model gives you a small LED status indicator for diagnostic reporting. Push-button ignition simplifies the initial start-up process. We particularly like the ceramic fusion tank guard to reduce corrosion and the self-cleaning dip tube to reduce sediment buildup.

Finally, you get a 6-year limited warranty for peace of mind. Of course, AO Smith manufactures sizes ranging from 30 to 98 gallons. You can also find short and tall configurations in several sizes.

For a "smarter" water heater, you can upgrade to the Signature Premier range, which offers vacation timers and automatic "usage-based" settings.

The Best Hybrid Electric Heat Pump Water Heaters

AO Smith Signature Hybrid Water Heater

The "Cadillac" of that water heater is probably a hybrid electric heat pump model. The AO Smith Signature Electric Water Heater with Hybrid Heat Pump is a smart and efficient model. The hybrid heat pump design makes it 4 times more efficient than the best electric water heaters. It saves enough money – according to the numbers – that it should pay for itself in as little as 2-3 years. Over 10 years, the energy savings could be as much as $4,500.

This water heater does not have built-in WiFi. Instead, it has a simple front-mounted control system that sets it to efficiency, hybrid, electric, or vacation mode. We like this in our water heaters – less things to break and worry about. For anyone in Washington or Oregon, those heaters also include demand response technology.

With this water heater, you get peace of mind with a 10-year limited warranty.

Best Gas Tankless Water Heaters

Rinnai V75IN Indoor Tankless Water Heater

Rinnai has been the go-to brand for tankless water heaters for as long as I can remember. When it comes to tankless, we choose indoor units whenever possible, and I try to recommend gas models with at least 7.5 GPM. This is sure to provide plenty of water for a family of 4-5 – even when you have clothes in the washing machine, dishwasher or shower running.

What we love about this system is its simplicity and the excellent 10-year factory warranty on the heat exchanger. The Control-R 2.0 mobile app lets you set timers and schedules throughout the day and enable vacation mode while you're away.

In addition to the 120-month heat exchanger warranty, you also get a 12-month labor warranty and a 60-month parts warranty.

Best Electric Tankless Water Heaters

EcoSmart Tankless Water Heater

When we turn to tankless electric water heaters, we usually look for smaller units designed as point-of-use solutions. In our own Pro Tool Reviews Shop, we use the EcoSmart ECO 11 unit for the bathroom. This allows us to get values between 1.3 and 3.1 GPM depending on the inlet water temperature. Since we live in Florida, traffic tends towards the top end of the scale.

You can certainly buy whole home tankless electric water heaters, however, they require multiple high current circuit breakers. This makes them difficult to retrofit into existing homes. Over the years, newer electric water heaters have become so efficient that tankless electric water heaters don't always make financial or logistical sense as an aftermarket solution.

EcoSmart makes 10 different tankless water heaters, so you can get any size you need. The smallest unit is perfect for supplying water to a single bathroom sink or break room tap.

In the continental United States and Canada, EcoSmart offers a limited lifetime warranty on the home heater's heat exchanger and electronics. For point-of-use products, they offer a 1-year warranty on switches and electronics. For their ECO Mini series, you can get a 5 year warranty.

Repair and Replacement of Water Heaters – Incentives

If your water heater fails, you usually just replace it with a gas or electric equivalent of the same type (usually conventional). However, with the government's ongoing rebate, homeowners who replace their water heaters can get an Energy Star rebate. The rebate must be used for existing homes and your primary residence. It works like this:

• Purchase a qualifying gas, oil or propane water heater and receive a $300 tax credit . Such tankless systems must have an energy factor >= 0.82 or a thermal efficiency of at least 90%. Currently, all ENERGY STAR qualified tankless water heaters are eligible.
• Purchase an eligible electric heat pump water heater and receive a $300 tax credit . The system must have a Uniform Energy Factor (UEF) >= 2.2. Most ENERGY STAR certified water heaters are eligible for this tax credit.

Advantages and disadvantages of electric water heaters

Tank water heaters create hot water by heating water in a large insulated tank. These units typically heat 40-50 gallons. You can also find models designed for larger homes that can heat 80 gallons or more of water. Commercial units up to 120 gallons or larger. Electric water heaters use one or more heating elements and include a thermostat to control the temperature of the water in the tank. We recommend pairing the best electric water heaters with an external timer to save money.

With the exception of models with electronic controls, of course, you can program the thermostat on the device or through an app.

• Pros: Simple to replace, inexpensive compared to alternatives, good for warm or cold weather climates
• Cons: Often less efficient than tankless (especially gas), prone to periodic failures, limited hot water supply

Advantages and disadvantages of tankless water heaters

This type of water heater uses a heating element (heat exchanger) to heat water instantly as it flows through the system. Unlike tank based systems, the absence of standing water in the tank means that heat is not lost over time (backup loss) as hot water is waiting to be used. These systems are fairly new and claim to be more energy efficient because the water is only heated when needed (the system is "flow controlled" in that it only heats when hot water is activated and passed through the system.)

We do not recommend the electric type for a retrofit as it involves running 60-80 amp service to the water heater location and is less efficient than a gas model. In addition, most homes are not designed with centralized water supply. This means that a tankless system actually takes longer to deliver water to your faucet, shower or tub than a tank with a hot water recirculation system.

• Pros: Efficient, offers rebates, never runs out of hot water
• Cons: Expensive, requires special installation, takes longer to heat water in the remotest parts of your home

Should You Buy a Heat Pump Water Heater?

This is a lesser known water heating system that draws heat from the surrounding air to heat the water in the tank. Due to the unique way it works, it's really only suitable for warm climates and must be located in larger spaces such as utility rooms, garages, shops or basements. They are 3 times more efficient than electric water heaters, and they cool and dehumidify the air in a room, making them ideal for warmer climates. A typical residential heat pump water heater can heat 15 gallons of water per hour to 80 degrees Fahrenheit, with a final storage temperature of between 120 and 140 degrees Fahrenheit.

For size, these hybrid models also heat water faster and with more volume than simple electric water heaters.

• Pros: Efficient, cools the room during warmer periods, heats up faster, has more capacity for the same size tank
• Cons: Expensive, not suitable for cold climates, requires more space, limited hot water supply

Considering a solar water heater?

Want to maximize energy efficiency? Why not use the sun to heat water? Solar water heaters can work in a variety of ways and can be used to heat water for a home, or just to heat water for a swimming pool. These systems rely on some kind of backup system (tankless or traditional) to handle hot water production when the solar system cannot provide enough heat due to cloudy days etc. Active solar heating systems heat the fluid by directing it through so-called "flat plate collectors", which return to the storage tank and heat the water. Passive systems actually store tanks (as part of a "batch collector") on the roof or in the ground, heated directly by the sun.

• Pros: Makes you feel warm and fuzzy because it's green and cheap to operate
• Cons: Expensive, not suitable for colder climates, complicated installation, limited hot water supply

Check for additional rebates

It's also important to check with your local gas and electric company for additional discounts. For example, your local gas supplier might give you $450 if you replace your traditional gas water heater with a tankless system. In this case, your savings might look like this:

• $1,200 (cost of tankless water heater) – $300 (tax credit) – $450 (local rebate) = $450

At this price, it's almost ridiculous not to update and upgrade the water heater to be more efficient. Your final decision will depend on you and the requirements of your home and hot water needs. Review all options and consider all potential tax savings before making your final decision.