The 9 Best Water Heaters for Performance and Energy Efficiency

Find out which features you'll want to look for in a new water heater and don’t miss our list of some of the best units you can buy.

Best Overall

The A.O. Smith Signature 50-Gallon Natural Gas Heater on a white background.

A.O. Smith Signature 50-Gallon Natural Gas Heater

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Best Bang For The Buck

The Rheem Performance Platinum 50-Gallon Water Heater on a white background.

Rheem Performance Platinum 50-Gallon Water Heater

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Best Tankless Electric

The Stiebel Eltron Tankless Electric Water Heater on a white background.

Stiebel Eltron Tankless Electric Water Heater

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It used to be that there weren’t many options when it came to purchasing a residential water heater. The only two choices were gas or electric. With the advent of new technologies, the hot water heater landscape has changed dramatically and for the better. There are more options now than ever before. In addition to gas and electric tank water heaters, today’s mainstream options also include tankless and hybrid water heaters.

All these options might make you feel like you’re in ‘deep water’ when it comes to choosing the best water heater. Having installed several hot water heaters in my own homes over the years, and being a professinal DIY home improvement writer, I’m quite familiar with the process of choosing and installing the right model. For this article, I also researched 20 different water heaters on the market today, of varying types and features, to find the very best water heaters with the standout specs and approving customer reviews.

  1. BEST OVERALL: A.O. Smith Signature 50-Gallon Natural Gas Heater
  2. BEST BANG FOR THE BUCK: Rheem Performance Platinum 50-Gallon Water Heater
  3. BEST TANKLESS ELECTRIC: Stiebel Eltron Tankless Electric Water Heater
  4. BEST TANKLESS GAS: Rinnai High-Efficiency Natural Gas Water Heater
  5. BEST ENERGY-EFFICIENT: Rheem Performance Platinum Hybrid Electric Heater
  6. BEST FOR LARGE FAMILY: A.O. Smith Signature Premier Electric Water Heater
  7. BEST FOR HARD WATER: EcoSmart ECO 11 Electric Tankless Water Heater
  8. BEST MINI: Bosch Electric Mini-Tank Water Heater
  9. BEST PORTABLE: Hike Crew Portable Propane Water Heater & Shower Pump
A person using the dial on the best water heater option to adjust the settings

How We Chose the Best Water Heaters 

The right water heater can make bubble baths, showers, and common kitchen and bathroom tasks easier and more frequent without using ample energy. Selections for the best water heaters depended upon the water capacity, power output, ease of installation, type, and added special features included by some brands.

The products featured in our list include storage tank, tankless, and hybrid options. Each type includes small or large hot water tanks, averaging at 40 to 50 gallons for households of three to five people. As for power output, most of these residential water heaters are energy efficient by offering a Uniform Energy Factor (UEF) of under 0.70. (For a more detailed discussion of UEF, read the section Efficiency Rating below our product reviews). Though water saving, all of these units have powerful British thermal units (BTUs) or wattages to heat ample amounts of water quickly. The storage tank options average at 40,000 BTUs, while the tankless and hybrid options run at 4,500 watts.

As for durability, self-cleaning and diffuser systems remove sediment buildup and tank liners to reduce the likelihood of leaks. Since water heaters typically come in large sizes, installation of some of these models may require professional help. But, some of the smaller units that are lightweight and compact may be easy to install without help.

Our Top Picks for the Best Water Heaters

Read on to review these recommendations for hot water heaters in several categories. This list includes some of the most efficient and technologically advanced units from reputable water heater manufacturers.

Best Overall

A.O. Smith Signature 50-Gallon Natural Gas Heater

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The A.O. Smith Signature heater features a 50-gallon tank heated by a powerful 40,000 BTU burner, enabling it to deliver up to 81 gallons of hot water in the first hour. This makes the water heater powerful enough to serve a household of three or four, and it’s also energy efficient.

Features include an electronic gas valve for precise thermostat control, an LED indicator that provides system information, and an integrated safety system that prevents accidental fires.

Product Specs

  • Type: Storage tank
  • Water capacity: 50 gallons
  • BTUs/power output: 40,000 BTUs


  • Large water tank and gallons per minute (GPM); suitable for homes with 3 or 4 people
  • Provides 81 gallons of water in the first hour; can be used right away
  • 0.62 UEF saves hundreds of dollars on energy costs
  • High-altitude certified for southern and western households on high footing


  • Not Energy Star certified; may not be as energy efficient as comparable models

Get the A.O. Smith 50-gallon natural gas water heater at Lowe’s.

Best Bang For The Buck

Rheem Performance Platinum 50-Gallon Water Heater

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From a respected water heater brand comes the Rheem Performance Platinum 50-gallon water heater. This tank water heater offers excellent all-around performance and efficiency. Its 50-gallon capacity provides plenty of water for a family of five without breaking the bank.

With its powerful 40,000 BTU gas burner, the Performance Platinum can deliver a staggering 77 gallons of hot water in the first hour. Despite this high output, it’s rated to set owners back less than $300 a year, on average, in energy costs.

Product Specs

  • Type: Storage tank
  • Water capacity: 50 gallons
  • BTUs/power output: 40,000 BTUs


  • 0.64 UEF; can save hundreds of dollars per year on energy costs
  • Provides 77 gallons of water in the first hour; great for most households
  • Push-button ignition system is convenient and easy to use
  • Suitable for large homes of up to 8,500 square feet


  • Plastic drain valve is less durable compared to metal options

Get the Rheem 50-gallon water heater at The Home Depot.

Best Tankless Electric

Stiebel Eltron Tankless Electric Water Heater

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Selected as the best of the electric tankless water heaters, users can say “never again” to cold showers with the Stiebel Eltron tankless electric water heater. In addition to supplying a steady flow of hot water, the Stiebel Eltron model includes several features that make it rank among the top tankless water heaters. When hot water demand begins to exceed capacity, the Stiebel Eltron automatically makes slight reductions to flow to ensure the warm water keeps on coming.

This unit will provide up to 4.68 GPM and can save homeowners money. The Tempra uses about 15 to 20 percent less energy than standard tank water heaters. Other attractive features include easy-to-use digital controls for output and water temperature. The unit is small, weighing in at just over 15 pounds, and takes up very little space with its 20-inch-long by 20-inch-wide profile.

Product Specs

  • Type: Electric tankless
  • Water capacity: Up to 4.68 GPM, depending on temperature
  • BTUs/power output: 18,000 watts


  • Self-adjusting water flow for excellent efficiency and savings on energy costs
  • Requires less energy than similar options; saves both water and electricity
  • Built-in digital control panel is easy to adjust and monitor while in use
  • Lightweight and compact design; easy to install in tight spaces


  • No installation kit or tools included; buyers may need professional help with installation

Get the Stiebel Eltron water heater at Amazon or The Home Depot.

Best Tankless Gas

Rinnai High Efficiency Natural Gas Tankless Water Hea

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Combine tankless water heater efficiency with gas power to slash energy use by up to 40 percent with the Rinnai high-efficiency tankless gas water heater. This high-efficiency unit pumps out up to 6.5 GPM of hot water with a powerful 150,000 BTUs.

Rinnai also minimizes the number of pipes needed for venting the gas burner with a concentric venting system, which allows intake and exhaust to run through the same vent. Another included feature is a temperature lock to prevent accidental thermostat changes. At a little over 1 foot wide and 2 feet tall, this tankless water heater doesn’t take up much room, making it ideal for smaller spaces.

Product Specs 

  • Type: Tankless
  • Water capacity: 6.5 GPM
  • BTUs/power output: 150,000 BTUs


  • Concentric venting system; allows the intake and exhaust to run through the same vent
  • Temperature lock prevents any unwanted changes to the heat of the water
  • Compact, lightweight construction can be installed in small utility rooms or basements


  • High UEF of 0.82; may cost more to run than comparable models
  • Not suitable for large households; tank size is suitable for 1 or 2 people

Get the Rinnai water heater at The Home Depot or Build With Ferguson

Best Energy-Efficient

Rheem Performance Platinum Hybrid Electric Heater

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Take energy efficiency to the next level with the Rheem Performance Platinum 50-gallon hybrid electric water heater. This Energy Star-certified unit will save nearly $500 per year in energy costs compared to standard tank electric hot water heaters. Couple that with a 10-year warranty, and this unit offers exceptional savings.

Although the up-front cost is high, this Rheem water heater will earn back that difference in just a couple of years. This hybrid produces enough water to serve households of up to five people. It’s also a smart water heater, so owners can track usage and manage the water heater’s operation via a smartphone. The Rheem hybrid water heater has an integrated self-cleaning function that reduces sediment, extending the life of the water heater.

Product Specs

  • Type: Hybrid
  • Water capacity: 50 gallons
  • BTUs/power output: 4,500 watts


  • Large tank size; suitable for homes with up to 5 people
  • Smartphone monitoring included; can be checked and adjusted from anywhere
  • Self-cleaning function deters any sediment buildup for optimal longevity
  • Energy-efficient model; can help save monthly consumption and costs


  • Heavyweight design; may be difficult to install for first timers

Get the Rheem hybrid water heater atThe Home Depot.

Best For Large Family

A.O. Smith Signature Premier Electric Water Heater

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Bigger families need a reliable water heater for busy mornings. That’s why we recommend the A.O. Smith Signature Premier electric water heater. With its 50-gallon tank, this model is highly efficient and can help users save hundreds of dollars in energy costs every year.

Its innovative design absorbs any heat from the surrounding air and transfers it inside the water heater’s storage tank. As a result, it dehumidifies and cools ambient air in the process. Made with 4,500-watt copper water-heating elements, a protective anode rod, and a ceramic-fused tank shield, this model is easy to use with an electric interface for adjusting temperature, operating modes, and viewing diagnostics. All in all, this model is durable enough to provide a hot shower for every family member during the morning rush.

Product Specs 

  • Type: Electric
  • Water capacity: 50 gallons
  • BTUs/power output: 4,500 watts


  • Very energy efficient; can save hundreds of dollars per year in energy costs
  • Absorbs any heat from the surrounding air and transfers it inside the water heater; dehumidifies ambient air
  • 4,500-watt copper heating elements, protective anode rod, and a ceramic-fused tank shield
  • Electric interface is built-in for changing temperatures, operating modes, and viewing diagnostics


  • Default settings must be altered when first installed; runs as a hybrid unless changed

Get the A.O. Smith electric water heater at Lowe’s.

Best for Hard Water

EcoSmart ECO 11 Electric Tankless Water Heater

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Hard water has a nasty habit of eroding pipes and causing damage to a home’s internal water system over time. To avoid these problems, rely on the EcoSmart ECO 11 electric tankless water heater’s high-quality internal mechanisms. This model has a fast flow recovery rate so there is no waiting time between different peoples’ showers, and it continuously monitors water temperature and flow rate for 99 percent efficiency. This tank is also compact enough to fit in a utility room or basement without taking up a lot of space.

This 13-kilowatt/240-volt water heater provides a maximum flow rate of 3.1 GPM of continuous hot water, and the large backlit LCD display and control knobs allow owners to monitor or adjust the water temperature at any time. Plus, the power button can adjust the display to show temperatures in both Celsius and Fahrenheit.

Product Specs 

  • Type: Tankless
  • Water capacity: Up to 3.1 GPM
  • BTUs/power output: 13,000 watts


  • Energy efficient; fast flow recovery rate (only when water is needed)
  • Digital temperature display allows for monitoring temperature at all times
  • Compact enough to fit in a utility room or other space; does not require venting


  • Some users report difficulty while installing; some parts may be missing upon arrival

Get the EcoSmart water heater at Amazon, Ace Hardware, or The Home Depot.

Best Mini

Bosch Electric Mini-Tank Water Heater

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The compact size of the Bosch mini-tank water heater seamlessly fits into any setting, making it a versatile choice for many buyers. With a user-friendly front dial, temperature adjustment becomes effortless, ensuring personalized comfort. The simple LED indicator lets users know when the tank has reached the desired temperature.

Flexibility reigns as this unit can be effortlessly installed as a floor-standing model or mounted on the wall, courtesy of the included bracket. Catering to various needs, it’s perfect for kitchenettes, in-law suites, half bathrooms, or distant powder rooms that are far from the primary water heater. This Bosch mini-tank heater doesn’t just save space; it enhances comfort with its innovative features, making it a practical and adaptable solution for your hot water requirements.

Product Specs 

  • Type: Electric
  • Water capacity: 4 gallons
  • BTUs/power output: 1,440 watts


  • Flexible installation options; wall-mounted or floor standing
  • Simple controls on the front are easy to use and understand
  • Ideal for areas in the home that are far from the main water heater


  • Not suited as the main water heater in the home

Get the Bosch water heater at Amazon, Lowe’s, or The Home Depot.

Best Portable

Hike Crew Portable Propane Water Heater u0026 Shower Pump

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The Hike Crew portable propane water heater seamlessly merges the comforts of home with the rugged essence of camping. It integrates a built-in pump that can be immersed in a water source and linked to a propane tank. This arrangement ensures a continuous water heating, catering to camp showers, dishwashing, and equipment rinsing needs.

At the water heater’s upper part, a convenient handle serves as a carrying system. Bundled with a handheld faucet and a shower head attachment, the portable water heater furnishes hot water on the go, effortlessly connecting to both AC and DC power sources. For safety, the compact unit incorporates an automatic shut-off feature. This function turns off the burner either at 125 degrees Fahrenheit or when the water supply is depleted. Operating at a rate of 1 GPM and producing 42,000 BTUs, this portable device excels as a mobile solution but might not be suitable for other applications.

Product Specs 

  • Type: Tankless propane
  • Water capacity: 1 GPM
  • BTUs/power output: 42,000 BTUs


  • Comes with a built-in pump and carrying handle
  • Hand faucet and shower head attachment included
  • Fuse protection is a handy safety shut-off feature


  • Suitable for small appliances and light-duty use only

Get the Hike Crew water heater at Amazon.

Jump to Our Top Picks

What to Consider When Choosing a Water Heater

While knowing the different types of hot water heaters and their advantages is important, it also helps to know the main factors or features to consider when determining the best hot water heater for your needs.

Types of Water Heaters

Shoppers have four hot water heater options to consider. These units range from old-school tank water heaters to the newer hybrid models. Each offers advantages to consider.

Storage Tank Water Heater

Storage tank-style water heaters are the most common type. They consist of an insulated tank with electric or natural gas power for heating. Gas units use a flame burner or electrically-powered heating elements or coils to warm the water to a temperature regulated by a thermostat. The water is kept at a preset temperature in the tank day and night, standing by until needed. Once the tank’s hot water supply runs out, family members must wait for the heater to reheat the tank, which can take up to an hour.

Tankless (On-Demand) Water Heater

Tankless hot water heaters work on an entirely different principle than the traditional storage tank water heater. Rather than continually heating water in a tank, tankless water heaters operate on demand. This means they don’t start heating water until someone needs it.

As with conventional hot water heaters, tankless water heaters use gas or electricity to heat water. When a hot water tap is opened, cold water enters the tankless heater via a pipe and then is heated quickly by a gas burner or electric coil. Unlike a tank water heater, a tankless water heater offers an endless supply of hot water.

Tankless hot water heaters do, however, have their limitations on speed and flow. Most can produce about 5 or 6 gallons of hot water per minute.

Heat Pump (Hybrid) Water Heater

Heat pump water heaters, also known as hybrid water heaters, work off the concept that it’s easier (and cheaper) to use existing heat than it is to create heat. Heat pump water heaters take the heat from the air and use it to warm water.

Like a refrigerator uses a compressor to expel hot air from its insulated interior, a heat pump water heater compresses the surrounding air, expelling the cool air and retaining the warm air to heat water. It’s called a hybrid because it uses electrical coils to heat the water when hot water consumption is high. Because it gathers heat from the air, a hybrid heat pump water heater works most efficiently in warm climates.

Gas vs. Electric

The big difference between gas and electric water heaters is cost. Expect to pay, on average, between $1,300 and $2,600, including installation fees, for a 40-gallon gas water heater versus $950 to $1,500 for the same-size electric water heater, as reported to Fixr, a network of contractors and home improvement professionals.

Although operating costs fluctuate with gas and electricity rates, gas is significantly cheaper than electric to run. Gas water heaters cost around $30 a month to operate while electric heaters will run about $42 a month, according to Fixr.

Venting Needs

Because electric water heaters don’t require vents, they can be installed in almost any location in the home. Gas hot water heaters produce carbon monoxide exhaust gases and moisture when they burn. They use a ventilation system that consists of pipes and ducts to remove these byproducts. Thus, gas heaters need venting and take up more space than electric water heaters, limiting their placement in a home.

Sizing and Capacity

Hot water heaters come in capacities ranging from 20 to 100 gallons. The larger the capacity, the more hot water you can use before the supply runs out and the waiting game for more hot water begins. A 40- to 50-gallon tank is sufficient to handle a household of 4 people. Add 10 gallons of capacity for each additional person.

The higher the capacity, the larger the hot water heater. It’s essential to determine how much space is available in a basement or utility closet when selecting a new hot water heater. Gas and electric heaters come in tall models, which are 50 to 76 inches tall and 18 to 21 inches in diameter, and short models, which are between 30 and 49 inches tall and 20 to 26 inches in diameter. Also, note that gas hot water heaters take up more space because of the venting pipes and ducts they require.

If you’re tight on space, consider the much more compact tankless water heaters. Since tankless hot water heaters don’t have the water storage capacity of conventional tank heaters, they have their limitations. A typical tankless water heater provides hot water at a rate of 2 to 5 gallons per minute, which can limit the flow of hot water into the home, especially if multiple taps or appliances are using hot water at the same time.

Multiple tankless water heaters can work in tandem to improve the total hot water capacity a home needs. A separate tankless heater can serve specific appliances such as a washing machine.

Efficiency Rating

All water heaters are rated with a Uniform Energy Factor, which indicates how much of the energy used by the unit actually heats water. (UEF replaced efficiency ratings, or EF, in 2017.) A hot water heater with a UEF of 0.70 means that 70 percent of the energy consumed by the water heater goes toward heating water.

This rating isn’t a great indication of how much you can expect to spend on the unit, given the difference in gas and electricity rates. For example, a gas unit will have a much lower efficiency rating than an electric water heater, but because gas is significantly cheaper, running a gas tank heater will cost considerably less than running an electric water heater.

Tankless water heaters cost significantly less than storage tank heaters because they aren’t always running to keep a water supply warm. Depending on a home’s hot water usage, a tankless system can save as much as 40 percent off an energy bill. It’s often better to look at the estimated annual cost of operating the hot water heater to determine how it will affect the budget.

Brass vs. Plastic Drain Valves

Tank water heaters have a valve at the bottom of the tank used to drain the tank for maintenance. These valves work with a standard garden hose and are made of brass or PVC (Polyvinyl chloride). Since brass is far more durable than plastic, the better choice is a hot water heater that uses a brass drain valve.

Digital Displays

Like other major utility systems in a home, newer water heaters come with digital controls that allow owners to program the water heater to shut off at different times, such as when the family is away on vacation. While a digital display might add to the unit’s initial cost, it improves the efficiency of the hot water heater, ultimately saving money.


An old hot water heater is like a ticking time bomb. It sits for many years in your basement or utility closet, dutifully providing your family with hot water until, without warning, it stops working, creating an unexpected inconvenience and expense. Although a broken water heater might feel as shocking as an ice-cold shower, there are a few warning signs to watch for.

Q. How long does a hot water heater last?

On average, a gas, an electric, or a hybrid tank hot water heater will last between eight and 12 years. Tankless water heaters can last as many as 20 years.

Q. What are the signs your hot water heater is going out?

There are telltale signs of a failing water heater, including banging noises inside the tank, a decline in water temperature, rust-colored water, and water pooling around the tank’s base.

Q. Can you still shower if your water heater is leaking?

A leaking water heater will not prevent you from taking a warm shower. If the leak is bad enough that you need to shut off the water heater, you can still shower; you just won’t have any hot water.

Q. Can a leaking water heater explode?

Though a rare occurrence, a water heater can indeed explode and in spectacular fashion. This occurs with gas or electric water heaters that have clogged or malfunctioning pressure relief valves. If too much pressure builds, the water heater will explode, literally launching the unit like a rocket.

Q. How much does it cost to replace a hot water heater?

A water heater installation costs between about $846 and $1,702, which includes the price of the water heater plus labor, according to HomeAdvisor, a network of contractors and home improvement professionals. Tankless heaters, which are significantly more expensive than tank heaters, are on the high end of this range and may be expensive to replace.

Tony Carrick Avatar

Tony Carrick

Contributing Writer

Tony Carrick is a freelance writer who has contributed to since 2020. He writes how-to articles and product reviews in the areas of lawn and garden, home maintenance, home improvement, auto maintenance, housewares, and technology.