Technician fixing water heater

The 2022 Buyer’s Guide to Water Heaters

Buying a new water heater soon? Read our guide to buying a water heater (tank and tankless) to learn all about the types of home water heaters, unit efficiency, and how much water heaters cost in Canada.

If you’re having problems with your water heater — or even if it’s just getting old — it might be time to consider replacing it. But with so many options for type, heat source, size and features, it can be overwhelming to choose the right water heater for your needs. This guide provides you with the information you need to make the right decision and keep the hot water flowing.

Keep reading or use the following jump buttons to view a specific section.

Water Heater Basics

In this section, we’ll go over some of the key topics you might encounter while researching and buying a new water heater, including how they work and how to tell if it’s time to replace your current water heater.

How a Water Heater Works

At the highest level, water heaters use a fuel source — usually natural gas, propane or electricity — to produce heat that warms the water in your home.

For example, in a standard gas water heater with a storage tank, cold water enters the tank through the dip tube, which feeds the water into the bottom of the tank, where it’s warmed by a heating element. The hot water then rises to the top of the tank and is taken by the heat-out pipe and delivered to the pipes that deliver hot water to the faucets and appliances around your home. The heating elements are controlled by a thermostat that keeps the water in the tank at a relatively constant temperature so it’s always ready when you want it.

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Most water heaters contain the following parts:

  • Tank
  • Dip tube
  • Shut-off valve
  • Heat-out pipe
  • Thermostat
  • Heating mechanism
  • Drain valve
  • Pressure relief valve
  • Sacrificial anode rod

If any of these parts break or underperform, you may need to repair or replace your water heater.

See the section below for more information on the various types of water heaters, including how they work and the pros and cons of each.

When to Replace Your Water Heater

Start by checking your water heater’s warranty for some useful guidelines on how long you should expect it to last and when you should replace it. In general, you might want to start looking into a new model if:

  • Your water heater needs frequent repairs
  • Your energy bills are unusually high
  • The water coming out of the heater is dirty or smelly
  • Your water heater is making loud noises
  • The water coming from the water heater is not hot enough
  • The water coming from the water heater is too hot
  • The flow of hot water coming from the water heater is not strong enough

Later in this guide, we’ll provide more in-depth information on troubleshooting common problems and routine maintenance for your water heater.

Types of Water Heaters

Water heaters come in a range of types and sizes, each with different features and associated costs. Here’s a rundown on five of the most common types of water heaters.

Storage Tank Water Heater

The storage tank water heater is the most common type, and it’s probably what you picture when you think of a water heater. Depending on what’s available in your area, you can get one heated by natural gas, propane or electricity. You also have a wide range of capacity options, from 20 to 80 gallons (76 to 303 litres).

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How a Storage Tank Water Heater Works

Cold water is fed into the storage tank, where it’s heated by an electric element or gas-fired burner. From there, it’s either held in the tank until it’s needed or sent through your home’s water pipes to the point of use. A thermostat monitors the temperature of the water sitting in the tank and controls the heat source to keep the water heated to the set temperature and ready for use. To retain as much warmth as possible to prevent constant heating, most tanks are well-insulated. You can also add a tank blanket to increase the insulation factor even more.

There are two main types of tank water heaters, Power Vented (PV) and Conventional Vented (CV). They account for approximately 80% of the tanks in marketplace. The main difference between the two is that CVs vent the exhaust naturally up through the chimney, whereas PVs use a blower motor to vent the exhaust to the side of the house, usually in the alleyway between houses. CVs are commonplace in homes built before 2000 and PVs are standard for homes built after 2000.

Advantages of a Storage Tank Water Heater

  • Storage tank water heaters are usually less expensive than other types of water heaters.
  • They’re reliable, requiring little maintenance or upkeep.

Disadvantages of a Storage Tank Water Heater

  • No matter how well-insulated, the water in the tank eventually loses heat and must be reheated repeatedly, even if no one’s using it.
  • If your tank isn’t big enough for your needs, you might use hot water faster than it can be heated, leaving you with no hot water.
  • Tank water heater is bulky; it takes up space in the basement and requires 24 inches of clearance for the air intake.

Tankless (On-Demand) Water Heater

A tankless water heater, as the name suggests, doesn’t store hot water in a tank. Instead, the water is heated only as it’s needed (that is, it’s heated on demand). Most are heated by natural gas or electricity, but you can also get propane-fueled models.

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How a Tankless Water Heater Works

As water is drawn for use, it passes through a series of coils that heat it up to the set temperature. That means only the water you need is ever heated. Although flow rate is limited by how fast the water can be heated, you can get tankless water heaters in a range of sizes to speed up the heating if your household uses a lot of hot water.

Advantages of a Tankless Water Heater

  • Tankless heaters are more efficient than storage tank water heaters.
  • You’ll never run out of hot water.
  • It is very space efficient and can be installed in very compact areas, even inside cabinets.

Disadvantages of a Tankless Water Heater

  • Tankless heaters are usually more expensive to rent or purchase than storage tank models.
  • They can provide only a limited flow rate of hot water.
  • If you need to use a lot of hot water at once (for example, to have a shower and run a load of laundry at the same time), you might need more than one water heater.
  • The ground water temperature affects how hot the water can get, so during the winter your water may not be as hot as you’d like it to be.
  • If you live in a hard water area, you may also require a water softener to extend the life of the unit.
  • You may want to conduct regular flushing or descaling of your tankless water heater every 5 years or so to prevent calcium build up.

Heat Pump (Hybrid) Water Heater

If you live somewhere that doesn’t get too cold, a heat pump water heater is a very energy-efficient option compared to conventional storage tank heaters. Or consider a hybrid model so you can take advantage of the low energy consumption when it’s warm but have an electric backup when you need it.

How a Heat Pump (Hybrid) Water Heater Works

A heat pump water heater transfers the warmth from the surrounding ambient air to the water inside a storage tank. Hybrid models also have internal heating elements that work the same way as a conventional electric water heater.

Advantages of a Heat Pump (Hybrid) Water Heater

  • Heat pump water heaters are extremely energy-efficient — up to three times as efficient as a conventional storage tank heater — and may help lower your energy consumption.
  • Hybrid models can handle periods of high demand.

Disadvantages of a Heat Pump (Hybrid) Water Heater

  • The upfront cost of purchasing a heat pump water heater is considerably higher than that of a conventional storage tank water heater.
  • They require a lot of space to work effectively — at least 2 metres floor to ceiling and around 30 cubic metres of uncooled space — as well as a nearby drain to discharge condensate.
  • The heat pump mode won’t work if the outside temperature drops below around 5˚ Celsius.

Solar Water Heater

Solar water heaters are a relatively new option, relying on the warmth of the sun to do most of the heating. In the right setting, they can drastically reduce the carbon emissions from your water heating and significantly reduce your energy consumption.

How a Solar Water Heater Works

The most basic version features a solar collector installed on your roof, with tubes to circulate water through it. The water is warmed by the sun as it circulates and then returned into a storage tank. Solar heating systems are generally equipped with thermostatic controls to keep the water from flowing when it’s cold out, and most have supplemental heat sources to help handle cold or cloudy periods.

In colder climates, indirect systems are more effective. Instead of heating the water directly, these systems send an antifreeze solution through the solar collector to be heated by the sun, then through a set of coils inside a water storage tank, where they transfer their heat into the water.

Advantages of a Solar Water Heater

  • In very sunny areas, your water heating costs can be significantly reduced.
  • Solar heating is an environmentally friendly option.

Disadvantages of a Solar Water Heater

  • The effectiveness of a solar system is highly weather- and climate-dependent. On cloudy days, you may have to rely entirely on a backup system.
  • Solar water heaters are much more expensive than most other options — even with the savings, the payback period can be 10 to 30 years.

Condensing Water Heater

A condensing water heater is an option if you heat with gas and are looking for even greater energy efficiency.

How a Condensing Water Heater Works

A condensing water heater works similarly to a conventional gas-fired storage tank water heater, except it captures the exhaust gases that would typically exit the flue as waste heat. These gases are then circulated back through a coil in the base of the unit, where they transfer most of their heat into the water.

Advantages of a Condensing Water Heater

  • A condensing water heater wastes less energy by capturing and using exhaust gases.

Disadvantages of a Condensing Water Heater

  • Condensing water heaters can be used only where natural gas is available.
  • They may not be the best choice for smaller spaces, as they are only available in 55-gallon (208-litre) sizes and larger.
  • Condensing water heater is more expensive to rent or purchase than a traditional gas fired water heater.

Things to Consider When Choosing a Water Heater

In most cases, heat source and capacity will be the main factors that influence your choice of water heater, but venting type, efficiency and space are also key items to consider.

We encourage you to contact a water heating expert to help you assess these factors and determine what kind of water heater will be right for you. Be sure to cover the following topics.

Heat Source

The first thing you need to determine is what kind of heat source to use, which is often dependent on where you live. Electricity is generally available everywhere, but natural gas may not be available in your area. In some areas, you may be able to get propane or oil instead. Either way, it’s best to check what’s available before you decide on a water heater.

Heat SourceGas or PropaneElectricityHeat Pump or Hybrid
CostMore expensive to purchase than electric, but can cost less to operateLeast expensive option to purchaseMost expensive upfront, but can save on operating costs
Sizes30 to 100 gallons
(113 to 378 litres)
28 to 100+ gallons
(106 to 378+ litres)
50 to 80 gallons
(189 to 303 litres)
Other ConsiderationsUses a burner to heat waterNeeds space around it for air circulationNeeds to be ventedHighly efficient models availableUses energy from the air to heat waterLarger than most electric tanks and needs a lot of space around it to work effectivelyCan be added to existing water heaters

If you have the choice of heat sources, you may want to compare the annual operating costs for the models you’re considering. Check the EnerGuide label (if available) and your utility company’s rates to determine approximately how much energy a water heater uses and how much that will cost you per year. Balance those costs with the upfront purchase cost, as a more expensive model can often ultimately cost less over time thanks to lower operating costs.

Capacity

To determine how large a water heater you need, start by figuring out how much hot water you use. If you live by yourself and take quick showers, you can probably get away with a smaller tank. If you have four people showering every morning, you’ll need more capacity. The table below is a good starting point for the approximate tank size you’ll need based on the heat source and number of people in your household.

Capacity Needed
Household SizeElectricNatural Gas
1 or 2 people30 gallons
(113 litres)
30 gallons
(113 litres)
2 or 3 people40 gallons
(151 litres)
40 gallons
(151 litres)
3 or 4 people50 gallons
(189 litres)
40 gallons
(151 litres)
5 or more people80 gallons
(303 litres)
50 gallons
(189 litres)

Along with tank size, you’ll also want to consider the first-hour rate (the amount of hot water that can be delivered in an hour, starting from a full tank) as well as the recovery rate (how much water a heater can heat in an hour while refilling the tank). And if you’re thinking about a tankless water heater, the flow rate (usually measured in gallons per minute) will be your primary consideration.

Figuring out how all those factors interact with each other can be tricky, so it’s worth consulting an expert. They can do the math — factoring in the number of people, water heater type, estimated water use, flow rate and more — to recommend a water heater that will meet your needs. 

Venting

Water heaters that use natural gas, propane or oil need to be vented to prevent harmful gases from building up inside your home. If you’re switching to one of these heat sources from an electric model, don’t forget to consider the cost of adding venting in your price comparisons — which will vary depending on the space where you’re planning to put the water heater and the type of venting you choose.

Venting comes in two types: power venting and conventional venting. Conventional venting sends exhaust gases out through a vertical pipe, relying solely on the physics of rising hot gas. It usually costs less than power venting, which uses an electric fan or blower to push out the exhaust gases. Power venting generally provides better ventilation and is recommended when there’s a higher risk of carbon monoxide poisoning. It’s also the only option if your space doesn’t allow for vertical venting — but you’ll need a backup power source to make sure it will keep running in case of a power outage.

In 2008, Ontario building code began requiring the use of PVC (white plastic) pipes for venting, whereas homes built before 2008 used ABS (black plastic) pipes. If you are exchanging a water heater installed prior to 2008, you will have to upgrade all the venting to PVC at an extra cost.

Efficiency

Another factor to consider is efficiency: a more efficient water heater uses less energy to heat the same amount of water, which reduces your carbon emissions and your energy bills. Efficiency-related regulations are constantly being updated, so replacing an old water heater with a newer one will most likely gain you some efficiency. But if you want to be sure you’re getting the most efficient water heater possible, look for one with the ENERGY STAR® symbol, which indicates that the product has been certified to meet a strict efficiency standard. Note that not all types of water heaters are eligible for ENERGY STAR certification.

Space

Be sure to measure the space where you plan to put a new water heater — even if you’re replacing one with the same capacity. Guidelines and regulations on tank insulation are updated periodically, so many newer tanks are wider than their older counterparts of the same capacity and won’t necessarily fit into the same spaces.

Many manufacturers offer options for size and shape to fit into troublesome spaces. For example, lowboys are shorter and wider than standard models of the same capacity, so they can fit into spaces with limited headroom like crawlspaces or under cabinets. Conversely, if you have a high ceiling but limited floorspace, a tall water heater can get you the capacity you need in a smaller footprint.

How Much Does a Water Heater Cost?

The cost for a water heater includes standard installation, a warranty and all required licenses for installation. While you can sometimes find a water heater for less, be aware that lower prices often come with compromises in components, workmanship, warranty coverage and post-installation support.

Many factors can influence the exact cost of a new water heater, including the following:

  • Water heater type: storage tank, tankless, heat pump or hybrid, solar, condensing
  • Environmental choices: energy efficiency, fuel type
  • Personal preferences: lifestyle, extended warranties
  • Technical requirements: size of your home, available space for the water heater, heat source
  • Code requirements: safety, licensing, building code requirements, heat source-specific code requirements

The following table breaks down the average costs for new water heaters in Ontario offered by Enercare.

Water Heater TypeAverage Cost (Including Installation)
Storage tank (electric)$600-$800
Storage tank (natural gas)$800-$2,000
Tankless (electric)N/A
Tankless (natural gas)$1,600-$4,000
Heat pump/hybridN/A
SolarN/A
Condensing$3,000-$5,000

Average Operating Costs

After your initial purchase, the cost to run your water heater will vary based on type, efficiency and heat source. The average US household spends $400 to $600 per year on heating water — about 18% of their total energy costs. In general, natural gas water heaters will cost less to run than electric ones, and solar heaters will cost even less. Read more about the different types of water heaters.

Government Rebates

Various government and utility provider incentives and rebates are available for upgrading the energy efficiency of your home. Ask us about the latest programs and how you may qualify.

Financing Options

Buying

Most providers offer a variety of ways to purchase your water heater, including a one-time payment, deferred payments or financing programs.

Renting

Renting your equipment is a great way to avoid the upfront purchase and installation costs. With the Enercare AdvantageTM Program, your affordable monthly payments also cover maintenance and repairs. Contact us to schedule a free in-home assessment.

Renting vs Buying a Water Heater

If you’re ready to rent a water heater, we can help. Fill out our sales form and we’ll be in touch soon. 

Installation

Conventional storage tank water heaters are usually fairly straightforward to install, especially if your new one is the same type as your old one. If you’re switching from electric to gas, there will be additional venting and piping required, which will add to the cost and complexity.

For other types of water heaters, the complexity of installation can vary significantly, which means the costs involved will vary accordingly. Contact us for a no-obligation quote.

Water Heater Troubleshooting

Here are some tips on how to handle some of the most common water heater problems you might encounter. For more details on these and other issues, see 9 Common Water Heater Problems and How to Solve Them.

Pilot Doesn’t Light or Goes Out (Gas-Fired Water Heaters)

Start by making sure the valve on your gas supply line is fully open. Then try holding down the pilot knob for a minute to purge any air that might be in the line. If the pilot lights but won’t stay lit, make sure there’s nothing clogging the orifice that could prevent a full flame from forming.

Burner Goes Out (Gas-Fired Water Heaters)

Make sure your pilot light is on, turn the water heater’s thermostat up a bit (no higher than 50˚C) and then turn on a hot water faucet. If the burner doesn’t come on within a few minutes, leave the water running and adjust the thermostat down and up again until the burner ignites.

No Hot Water or You Run Out of Hot Water

If your water heater is fueled by natural gas, the two tips above about pilot lights and burners will usually solve the problem of no hot water. If your water heater is electric or power vented, make sure the breaker or fuse hasn’t tripped, and reset or replace it if it has. If it hasn’t, turn off the breaker and press the high-temperature cutoff reset switch. If the heater still doesn’t work, you might need to replace the heating element, which is usually a job best left to a professional.

If you’re running out of hot water and this is a new problem, first make sure it’s not a leak. Look for water around the base of your tank and address any leakage right away. If there are no leaks, try flushing your tank to get rid of any built-up sediment. If it’s very cold out, you can also try temporarily raising your water heater thermostat to compensate.

Water Leaks

If your tank or pipes are leaking, turn off the heater and the main water supply, and repair or replace the leaky parts as soon as possible.

Water Takes Too Long to Heat

This issue is most common when you haven’t used the water in a while, so cold water gets pulled into the tank and sent to your faucets before it’s had a chance to be heated properly. If your water consistently takes too long to heat, try turning up your water heater thermostat — just be sure not to turn it up too hot.

Water Is Too Hot

The most likely cause for this is that your water heater thermostat is set too high. Adjust it as required. If it’s still too hot, steam comes out of your faucets or you can hear boiling water inside your tank, reset your high-temperature cutoff switch. If that doesn’t work, turn off the water heater and call a water heater technician to replace the switch.

Low Water Pressure

Check to make sure all your valves are fully open. They should all be turned counterclockwise as far as they’ll go. If that doesn’t solve the issue, you may have a blockage somewhere and should call a plumber to replace the clogged pipes.

Dirty or Smelly Water

This is usually an indication that the anode rod inside your tank is failing, which can lead to corrosion and bacteria inside your tank. A water heater technician may be able to replace the rod, or it might be time to replace your water heater.

Tank Makes Noises

All water heaters make some noise, but very loud noises or unusual sounds may indicate a problem. A water heater technician can diagnose the problem for you and recommend a solution.

Routine Water Heater Maintenance

Regular maintenance is the best way to avoid problems and keep your water heater performing at its best. Keep your water heater and the area around it clean, and keep an eye out for any signs of corrosion or leakage.

Red-Tagged Equipment

In some cases, a technician might discover an issue with your gas-fired water heater that makes it unsafe to operate, and they may issue you a red tag. A Type A tag means your equipment poses an immediate danger, and your natural gas will be shut off to prevent carbon monoxide poisoning or other hazards. A Type B tag indicates an issue that is less urgent, but still needs to be addressed within 30 days.

If you get a red tag, give us a call. One of our licensed technicians will assess your equipment and advise you on next steps to ensure you stay safe and comfortable.

Have Any Questions?

We hope this water heater buyer’s guide helps you purchase a water heater that will fit your needs. If you have any other questions about water heating solutions, please don’t hesitate to contact our sales team.

Get a Free No-Obligation Price Quote on a New Water Heater

To book a free in-home assessment and price quote, get advice on a new water heater or have a technician look at your existing equipment, call our team at 1-855-642-8607 or fill out the form below.