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If you are in the market for a new water heater, you may want to consider a few things before the installation, especially if this is your first time. The installation process can be challenging if you do not understand the basics, which is why most consumers leave this type of job to the professionals.


First, you need to know the difference between a standard, or traditional, hot water heater and a tankless water heater. There are many varieties and if you make even the slightest mistake, it can be quite costly.


A traditional hot water heater for a standard home is typically around 40 to 50 gallons, although larger homes can require sizes up to 80 or even 120 gallons, like those with a Jacuzzi or garden tub. When you start shopping around, it is essential that you know the precise size for your home. A good rule of thumb is to review the specifications of your old hot water heater.


You should also be aware of the efficiency rating and the overall cost to operate. The efficiency rating tells you how well the hot water heater transfers heat using the source of energy to the water.


An electric tank has an efficiency range of approximately 85% to 95%, while a gas tank is a much lower, about 55% to 65%. Electric tanks transfer energy quicker due to the submersion of the heating elements. Gas tanks heat the water using a gas burner located below the tanks.


The operating costs for a traditional hot water heater vary, but if you review the manufacturer’s label on the surface, it will give you a good idea of what you can expect. On average, the operating cost for an electric hot water heater is approximately $350 to $400 per year; a gas hot water heater is much less costly. You can expect to pay about $100 to $150.


Tankless hot water heaters are much more cost effective because they only heat water when necessary, while a traditional hot water heater constantly heats the water and stores for use in the tank. The sizes are comparable, meaning both traditional and tankless hot water heaters are available in the same gallon sizes.


Tankless hot water heaters are more energy efficient than traditional gas hot water heaters, but similar to electric hot water heaters, operating at about 80% to 85% efficiency.  The cost per year to operate is anywhere from $150 to $350. The warranties for each type also vary, so it is essential that you review the guidelines.

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