A Complete Guide to Water Heater Types for Your Home

Liam Johnson

By Liam Johnson

29 Jan. 2026

8 min read

Types of Water Heaters
AI Generated Image: Intriera

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    ​A water heater is an essential part of any household. From morning showers to washing dishes and doing laundry, household chores depend on water heaters every day. There are several types of water heaters available, and each has its own pros and cons. Choosing the right water heater from the multiple options can be overwhelming.

    A thorough understanding of these types can help homeowners make better decisions when choosing water heaters.

    Why is It Important to Choose the Right Water Heater?

    Most homeowners do not give their water heater much thought until something goes wrong. This appliance determines whether hot water is available when needed and also influences utility bills. The right water heater helps in keeping energy usage under control and reduces costs.

    Several important factors must be considered while choosing the right water heater. Household size matters because the needs of a small household can be different from those of a larger one.   For example, larger families may need higher capacities, while smaller families may prioritize energy efficiency. In addition, the climate and the budget also play important roles.

    The selected water heater also influences maintenance costs and how well a home uses energy. Taking time to understand the available options also ensures that the choice aligns with both lifestyle and budget.

    Types of Water Heaters

    Tank Water Heater

    A Modern Gray Residential Water Heater Stands Against a Beige Wall in a Utility Room
    AI Generated Image: Intriera

    Tank water heaters come with a heating element and a storage tank that holds hot water until it's needed.  These are commonly used heaters; they are affordable. These conventional heaters feature a large insulated tank that can hold 30 to 80 gallons of water. The exact capacity depends on the tank's size.

    Most water heaters are powered by electricity or natural gas, but some models use liquid propane or oil instead. In this type of water heater, cold water flows into the tank and is heated to a preset temperature. Once the water reaches the preset temperature, the heating element stops working. The heater turns back on when the water cools, then needs to be reheated to the set temperature.

    Pros of Choosing Tank Water Heaters

    • A tank water heater has several advantages, including affordability.

    • It is available in many sizes to fit various household needs.

    • It can also run on multiple fuel sources, such as electricity, gas, and oil.

    Cons of Choosing Tank Water Heaters

    • It uses a lot of energy and takes up a significant amount of space.

    • Another drawback is that electric models can be useless during a power outage.

    Tankless Water Heaters

    Tankless Water Heaters
    Photo: @callcomfortunion

    They are also known as instantaneous or on-demand water heaters. Instead of using a storage tank, these heaters circulate water through a coil system that heats it as needed. These water heaters are measured by the gallons per minute they can deliver, and they have an average lifespan of 20 to 25 years.

    Pros of Choosing Tankless Water Heaters

    • These heaters require much less space than conventional heaters.

    • They heat water on demand, which means the hot water supply remains steady.

    • This setup also saves on energy bills.

    Cons of Choosing Tankless Water Heaters

    • The initial cost is higher.

    • Older homes may need upgraded electrical systems to handle the power requirements.

    • Bigger homes may require more than one unit to meet the needs.

    When choosing a tankless water heater, consider how much hot water the household typically uses. This helps determine the correct gallons per minute.

    Here are the average flow rates in gallons per minute:

    • Bathtub: 2.0 - 4.0

    • Shower: 1.5 - 3.0

    • Bathroom Faucet: 0.5

    • Kitchen Faucet: 1.0 - 1.5

    • Dishwasher: 1.0 - 3.0

    • Clothes Washer: 1.5 - 3.0

    Natural Draft Water Heaters

    Copper Piping Connects to the Top of the Heater, and a Flexible Corrugated Metal Exhaust Vent Extends Horizontally
    AI Generated Image: Intriera

    Natural draft water heaters are traditional units that vent into a chimney and use their own combustion mechanism. These are fuelled by natural gas, propane, or oil. They are sometimes called gravity-vented water heaters because they rely on gravity to remove exhaust gas from the home.

    Pros of Choosing Natural Water Heaters

    • One major advantage is that these water heaters do not use electricity, which means they will continue to provide hot water even if the power goes out.

    • This heating system is affordable and reliable.

    • These units can last between 8 and 12 years with proper maintenance and inspection.

    Cons of Choosing Natural Water Heaters

    • The downsides include the risk of back-drafting and poor energy efficiency.

    • Poor ventilation or a blockage in the vent can cause the exhaust to flow back down the pipes and into the home. This can lead to serious consequences like carbon monoxide poisoning.

    • The best way to avoid back-drafting is to have a professionally trained plumber install the natural draft water heater properly.

    Power Vented Water Heaters

    A White Cylindrical Hot Water Tank in a Cluttered Basement Setting
    AI Generated Image: Intriera

    Power-vented water heaters are similar to natural-draft models and can also be fueled by natural gas, propane, or oil. However, instead of venting into a chimney, they vent directly to the exterior of the home using a fan-assisted exhaust system that pushes the gas through a pipe. This design reduces the chance of back-drafting or carbon monoxide poisoning.

    These water heaters are also more energy efficient than natural draft heaters because they operate on minimal gas, which naturally lowers the operating costs. Another benefit is that they do not require a chimney, allowing them to be installed anywhere in the home.

    While installing, it should be done correctly; otherwise, there is a risk of a fire hazard or a carbon monoxide leak. To ensure a safe installation, it is better to seek professional help.​

    Point-of-Use Water Heater

    A Small, White and Blue Wall-mounted Electric Water Heater is Installed Directly Above the Countertop
    AI Generated Image: Intriera

    Point-of-use water heaters are designed to supply hot water to a single plumbing fixture, such as a shower or kitchen. Tanked versions of these heaters usually have a small storage tank that prepares a limited quantity of water.

    Tankless point-of-use heaters are also available and ideal for showers, as homeowners do not have to worry about hot water running out in the middle of a long shower. This is an affordable option that also does not take up too much space. They can simply be installed out of sight under a sink.

    Pros of Installing a Point-of-Use Water Heater

    • They save energy in the long run.

    • They do not require much space in the house.

    • They can be installed near water fixtures, hiding from sight.

    • They also heat water immediately.

    Cons of Installing a Point-of-Use Water Heater

    • They supply water to only one fixture, thereby limiting their functionality.

    • They are not ideal for large households.

    • It requires a professional to assist with the installation.

    Electric Water Heaters

    Electric Water Heaters
    Photo: @theconservativeplumber

    These are one of the preferred water heaters among homeowners because of their cost-effectiveness and simplicity. They rely on heating elements fully submerged in the water, which improves energy efficiency. They tend to be especially popular among smaller households that do not need a large amount of hot water at once.

    This option is often less expensive than other types. Its easy installation process reduces installation costs and makes it easier for plumbing professionals to complete their tasks. Electric water heaters can also be more compact because they do not require gas lines, making them easier to install in smaller spaces.

    They also produce no emissions during operation, so no venting is needed, and the entire system operates in an environmentally friendly manner. If natural gas and propane are unavailable in your region, electric water heaters will be the default choice. The wider availability of electricity often adds to its advantage.

    ​Conclusion

    When selecting a water heater, homeowners should consider what matters most to them. It always depends on homeowners' varied needs. Things like fuel availability and even family size should be considered. Altogether, understanding the different types of water heaters and how they work makes it easier to find the right type for any home.

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