Conventional, storage tank water heaters store heated water in a tank, raising and maintaining the water temperature to the setting on the tank thermostat. Even if no hot water is used, the heater operates periodically to maintain the temperature. When cool water enters the tank as hot water is used, it needs to be heated too.

These water heaters have the lowest upfront costs. However, they use significantly more energy and therefore may not be cost-efficient over time.

Energy used to maintain a tank full of hot water at all times is called “standby loss,” and this accounts for up to 20 percent of a home’s annual water heating costs.

Lifespan and warranties are generally between 8 and 12 years- the shortest of any water heater type.

Lower upfront costs and ease of installation are the greatest advantages for these water heaters. Most homes already have this type of heater installed so replacement doesn’t usually require reconfiguration of existing plumbing.

With a storage tank water heater, you’ll run out of hot water if the tank is emptied and you’ll need to wait for it to heat up again. The tanks also need to be cleaned regularly to prolong its lifespan.

When a hot water tap is turned on, cold water travels through a pipe into the water heater, where a sensor turns the heat exchanger or heating coils on. Water then flows through the heating coils and is heated to the desired temperature. Once the faucet is closed, the sensor automatically shuts down the heating coils.

The initial costs for tankless water heaters are higher than for either conventional tank storage or heat pump water heaters. Tankless water heaters are, on average, about 20-30% more energy efficient than conventional storage tank models, but they’re still not as energy efficient as hybrid, heat pump water heaters.

Although the initial investment is high, tankless water heaters offset these costs with efficiency and a long lifespan. There may also be local rebates and federal tax credits available for tankless water heaters.

The lifespan of a tankless water heater is about 20 years, which exceeds their traditional counterparts significantly. Warranty coverage varies, but is generally about 10-15 years.

Tankless water heaters don’t waste water since water is heated almost immediately, and they don’t waste energy since they don’t have to keep a tank of water hot all the time. They’re also great space savers, which might allow you to fit in that extra bathroom in the basement you might be considering.

Best of all, you won’t run out of hot water in the middle of a shower. And you don’t have to worry about rust and scale buildup from a tank ending up in your water.

Initial costs are highest compared to other water heater options, and tankless units should be serviced once a year by a qualified technician.

Instead of creating heat directly, heat pump water heaters move heat from one place to another. This makes them significantly more energy efficient than conventional water heaters. They use the same technology as your refrigerator, just in reverse, to heat water instead of cool the fridge.

While a refrigerator pulls heat from inside a box and dumps it into the surrounding room, a heat pump water heater draws in heat from the surrounding air and feeds it, at a higher temperature, into a tank to heat water. During periods of high hot water demand, heat pump water heaters automatically switch to standard electric resistance heat (hence the name “hybrid” hot water heaters).

Heat pump water heaters let you choose how to heat your water with various operating modes, such as efficiency, auto/hybrid, and electric, to control your energy use.

In the right climate, these water heaters are incredible energy efficient, using up to 60% less electricity than traditional styles, and are therefore very cost-efficient over time. While the upfront cost of an EnergyStar certified heat pump water heater is higher than conventional water heaters, the savings in energy usage will pay back the difference over time. In the right environment, hybrid heat pump water heaters are the cheapest option over their lifespan when compared to any other water heater.

There are also rebates and tax credits available if you choose a heat pump water heater, adding significant savings to the upfront cost.

These water heaters generally have lifespans of 13-15 years and warranties of 6 to 8 years, built to outlast conventional water heaters.

In a warm and humid climate, these water heaters have the lowest cost of ownership over their lifespan and are incredibly energy efficient. They are a very cost-effective and environmentally conscious option.

Several models are also “smart” water heaters, and allow you to monitor your hot water use and adjust your settings accordingly.

You can purchase a stand-alone hybrid heat pump water heater as an integrated unit, or you can retrofit a heat pump to work with an existing, conventional storage tank water heater.

Heat pump water heaters require a sufficient amount of warm air circulation to operate properly. The cooler and dry climate in Colorado might not provide the best conditions to allow heat pump water heaters to run energy efficiently. Installing a heat pump water heater near the furnace could be a possible consideration. Also, keep in mind, they should be installed in a room with 1,000 square feet of space (12’x12′) or have adequate ventilation added, e.g. through ducts. These water heaters might be good in a basement, laundry, or utility room, but aren’t always ideal in a closet or crawlspace.

Heat pump water heaters use a 240-volt electrical outlet, and you might need an electrician to install an outlet in the location of your water heater if you currently have a conventional, gas water heater.

Just like conventional water heaters, the tank needs to be cleaned regularly to prolong its lifespan. And when the tank is empty, you run out of hot water. They also have a lower recovery rate, meaning it takes longer to heat a full tank of water than it would with a conventional storage tank heater.