How to Choose the Right Water Heater for Your Home

Shopping for a new water heater isn’t exactly the thrilling retail therapy you dream about. There’s no “water heater aisle” at the mall, and your friends probably won’t be jealous when you brag about your latest purchase. 

But when that old clunker finally gives out—usually mid-shower, mid-winter—you suddenly become an expert in BTUs, tank sizes, and energy efficiency ratings overnight.

Should you go tank or tankless? Gas or electric? Do you need enough hot water for a football team like a family with teenagers might or just a couple of reasonable humans? And why do some models cost as much as a used car? 

Relax—we know it’s a lot! 

But the right water heater can save you money, keep your showers steamy, and make sure you never have to do the dreaded “cold rinse and scream” again. 

In this guide, Desert Diamond Air & Plumbing breaks down what you need to know about water heaters to help you navigate the various options and find the perfect fit for your Phoenix, AZ, home.

Factors to Consider When Choosing a Water Heater

Choosing the right water heater for your home is essential for ensuring comfort, efficiency, and cost savings. With several types of water heaters available, selecting the best option depends on factors such as:

• Household Size and Water Usage: The number of people in your home and your daily hot water consumption will determine the capacity required.
• Energy Efficiency: Opting for an energy-efficient model can reduce utility bills and lower environmental impact.
• Installation and Maintenance Costs: Some water heaters have higher upfront costs but lower long-term expenses.
• Available Fuel Type: Water heaters are typically powered by electricity or natural gas. Your home’s existing infrastructure will influence your choice here.
• Space Availability: Some models require more space, while others are compact and suitable for smaller storage areas.

Tax Credits and Other Incentives for Water Heater Replacements

The cost of a new water heater is often a driving factor in a purchasing decision, so you should also consider available tax credits and incentives for your water heater replacement. 

Heat pump water heaters can earn a tax credit of 30% of the project cost (up to $2,000), while natural gas water heaters can qualify for a tax credit of 30% of the project cost (up to $600).

Some Arizona energy providers offer rebates for upgrading to a more efficient water heater, like SRP’s $500 rebate for an ENERGY STAR® heat pump water heaters. Be sure to check with your provider to see if any rebates or other incentives are being offered.

Types of Water Heaters

There are several types of water heaters, each with its own benefits and drawbacks. Conventional tank water heaters are cost-effective but less efficient, while tankless models provide endless hot water with greater energy savings (though a higher upfront cost). Hybrid and condensing models offer additional benefits for energy-conscious homeowners.

Understanding these differences will help you make an informed decision.

1. Conventional Storage Tank Water Heaters

These are the most common type of water heaters, consisting of an insulated tank that stores and heats the water continuously until hot water until needed. 

Pros

• Lower upfront cost compared to other models.
• Reliable and widely available.
• Can supply hot water to multiple fixtures at once.

Cons

• Higher energy consumption due to standby heat loss.
• Limited hot water supply—once depleted, you must wait for it to reheat.
• Bulkier size, requiring dedicated space.

2. Tankless (On-Demand) Water Heaters

Tankless water heaters heat water only when needed, using a gas burner or electric element, eliminating the need for a storage tank.

Pros

• More energy-efficient since they don’t maintain a hot water supply constantly.
• Unlimited hot water supply, as long as demand doesn’t exceed the system’s capacity.
• Compact size saves space.
• Longer lifespan (typically 20+ years).

Cons

• Higher initial cost and installation expenses.
• May struggle to provide hot water to multiple fixtures simultaneously.
• May require a larger gas line or electrical upgrade for optimal performance.

3. Heat Pump (Hybrid) Water Heaters

Heat pump water heaters use electricity to transfer heat from the surrounding air to heat the water, making them highly energy-efficient.

Pros

• Significantly lower energy consumption than traditional electric water heaters.
• Lower long-term operating costs.
• Environmentally friendly option.

Cons

• Higher upfront cost.
• Requires sufficient space for air circulation.
• Less effective in colder climates.

4. Condensing Water Heaters

These are high-efficiency gas water heaters that use waste heat from the combustion process to preheat the incoming water.

Pros

• More efficient than traditional gas water heaters.
• Suitable for homes that use natural gas as a primary energy source.

Cons

• Higher upfront cost.
• May require modifications to existing venting systems.

Contact Desert Diamond Air & Plumbing for a Free Water Heater Consultation

When choosing your water heater, evaluate your daily water usage, space availability, and long-term financial goals. Investing in the right system can provide optimal comfort and efficiency while keeping your energy costs in check. 

If you are unsure which water heater is best for your home, consulting with a professional plumber may help you make a more informed decision. Our licensed plumbers have years of experience and are happy to answer any questions you may have about different water heater models and how well they may perform in your home. 

Call 602-362-4599 or request service online to schedule a free consultation with a professional from Desert Diamond Air.