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Best Water Heaters for Your Home

Water heaters are responsible for heating your water and supplying it to household fixtures and appliances, such as dishwashers, showers, and more. Every home uses their hot water supply differently, so it’s important to understand the different types of water heaters and their features, as well as installation or replacement costs, to help you buy the water heater best suited for your household needs.

8 Tips to Consider When Choosing the Best Water Heater for You

1 Types of Water Heaters: Know Your Fuel Source

There are three main water heater fuel sources:

Electric Water Heaters

Electric water heaters are convenient and easy to use, as they run purely on electricity with no gas or propane requirement. They’re smaller than traditional gas heaters and – as long as they’re always plugged in – will never run out of hot water.

Electric water heaters don’t require any venting either, so installing them is easier and usually more affordable than a gas heater installation. The long-term cost for usage of an electric water heater can be higher than that of a gas heater, depending on the price of your utilities.

Natural Gas Water Heaters

Gas powered water heaters heat water faster than electric ones, but because they require venting, they are harder and more expensive to install. While the installation may be more expensive, the long-term operational cost of running a gas water heater is usually lower than that of an electric one, and unlike electric water heaters, gas heaters don’t rely on electricity so you’ll continue to have hot water even if your power goes out.

Ventilation for these types of water heaters can be done in two ways, direct vent or power vent. Direct venting systems connect to an existing chimney or vertical exhaust pipe to vent gas outside. If the heater isn’t close to a chimney you’ll need a power vent, which uses an exhaust fan to blow the exhaust gases through an exhaust pipe. The power vent fan needs to be powered by an electrical outlet and are typically louder – similar to the sound of a hair dryer.

Propane Gas Water Heaters

The benefits of a propane water heater are similar to those of a natural gas one, including fast water heating and the ability to heat without power. One difference, however, is that propane burns cleaner, making it a more environmentally friendly option for heating your water.

All three of these options are great choices for any home but deciding which is the best water heater for you depends on your specific needs and budget. If you’re considering switching from one water heater type to another, remember that each requires specific hook-ups, plumbing, electrical connections and venting requirements.

2 Tank vs Tankless Water Heaters

A tankless water heater installed next to a washer and dryer.

Today, you have the option of choosing between a traditional hot water tank and a smaller, eco-friendly tankless water heater. Use our chart below to learn more about the pros and cons of both tank and tankless water heaters to make an informed decision:

A tank water heater sits in the corner of a room with totes stacked next to it.

Tank Water Heaters

How it functions

Tank water heaters are the most common type of water heaters. These units physically store gallons of hot water at a time.

Benefits of a Tank Water Heater

  • Economical, generally lower up-front unit cost compared to tankless water heaters
  • ENERGY STAR™ certified models available
  • Accommodates steady, high-use demands
  • Capacity ranges from 2-60 gallons
  • Efficiency varies between models and fuel sources
  • Select models work with the WINK app to provide you with convenient control of your water heater
A tankless water heater sits next to a washer and dryer in a laundry room.

Tankless Water Heaters

How it functions

Tankless water heaters heat your water on demand, but do not store water. The water passes through a series of coils in the unit. Because they don’t store water, they are an environmentally conscious option, and take up much less space.

Benefits of Tankless Water Heaters

  • Larger up-front investment compared to tank water heaters
  • Provides continuous hot water
  • Reduces energy consumption by as much as 30%
  • All Rheem gas tankless models are ENERGY STAR™ certified
  • Excellent choice for full-time applications, and also ideal for residences occupied part-time, such as cottages
  • Installed on walls, freeing up floor space
  • Environmentally conscious and saves energy costs

3 Consider How Much Hot Water Your Household Needs

It’s important to select a water heater that will provide enough hot water for your household’s needs. An undersized water heater will work harder than it needs to and, therefore, have a shorter lifespan. Choosing a water heater that caters to your full household capacity can ensure there’s enough hot water for several appliances to run at once. If you’re working from home regularly, you may find that your water usage has increased somewhat and you may want to consider switching to a larger-tank heater to accommodate your growing needs.

Tank Water Heaters:

The best way to determine your household capacity is through the number of bathrooms and bedrooms in your home. Consult the table below to determine the size of your new hot water tank.

Number of Bathrooms

1-1.5

2-2.5

3-3.5

Number of Bedrooms

1

2

3

2

3

4

5

3

4

5

Minimum Tank Size (gallon)

20

30

40

50

50

50

60

50

60

60

Tankless Water Heaters:

For tankless water heaters, you can determine your household capacity by calculating how much water you need at any time. Use the chart below to calculate the gallons per minute (GPM) of hot water each of your fixtures and appliances need and add up these amounts to get a total GPM for your household. For example, if you typically have one shower running, plus a dishwasher, and a washing machine, you have a flow rate of 3.5 – 7.5 GPM.

Fixture/Appliance

Typical Water Flow

Bathroom Faucet

0.5-1.5 GPM

Kitchen Faucet

3.0-7.0 GPM

Shower

1.0-2.0 GPM

Dishwasher

1.0-2.5 GPM

Clothes Washer

1.5-3.0 GPM

Once you understand the demands and expectations you have for your tankless water heater, you’ll have a better idea of which one to choose.

4 Consider Your Unit’s Dimensions

Once you know the capacity for your water heater, remember to take the unit’s dimensions into consideration. Here are helpful tips when measuring your water heater:

  • The unit should have ½” clearance on the sides, 12” on the front, and 18” off the floor.
  • For closets and close quarters: if you are replacing an old unit, keep in mind that newer units may be larger, as more insulation is required to meet the latest strict federal energy standards.
  • When purchasing a tankless water heater: ensure the location you choose for installation meets the unit's ventilation requirements. Does it require an exterior wall near a gas supply line, water supply line and/or an electrical power source? Placing your tankless heater near the correct supply lines and power sources can be the easiest and most cost-effective way to run the venting.

5 Have Your Water Heater Installed by Professionals

We highly recommend having your water heater installed by a professional, as it can be a difficult and sometimes dangerous process, as the installation of a water heater deals with carbon monoxide, natural gas, and a pressure-controlled holding tank. Home Depot trained professionals are equipped with the necessary skills and knowledge, including codes and safety procedures, to get the job done safely and efficiently. The Home Depot Home Services professionals will remove your old unit and replace it with your new one within the same day.

6 New Water Heater Cost: Buying vs Renting

A Home Depot installer kneeling to inspect a hot water tank.

Should You Rent or Buy Your Water Heater?

Hot water tank prices can vary depending on whether you rent or own your water tank. The average cost of renting a water heater in Ontario is anywhere from $20 - $45 per month or higher depending on the size of the tank and the service provider.

If you’re still renting, compare your monthly water heater cost to the average water heater price when you purchase a tank outright. Water heater replacement costs may be more affordable than you think, even with installation.

Hot water tank prices will vary depending on the brand, model, installation type and warranty.

Up to $800^ savings when you purchase your tank instead of renting**

EXCLUSIVE to The Home Depot

RHEEM® Performance™ 40‑Gallon Electric Water Heater (1000792906)

Warranty: 6 Years

^40-Gallon Electric (1000792906) ($438) + estimated installation fees ($265) = $703. 10-year rental contract ($1,573.20, based on $13.11/month average rental charge) - $703 = savings ($870.20). Terms and conditions apply. See store associate or visit homedepot.ca for details.

Up to $1,200^ savings when you purchase your tank instead of renting**

EXCLUSIVE to The Home Depot

RHEEM® Performance Plus™ 40‑Gallon Gas Water Heater (1000792348)

Warranty: 6 Years

^^40-Gallon Gas (1000792348) ($558) + estimated installation fees ($215) = $773 10-year rental contract ($2,041.20, based on $17.01/month average rental charge) - $773 = savings ($1,268.20). Terms and conditions apply. See store associate or visit homedepot.ca for details.

Up to $1,800^ savings when you purchase your tank instead of renting**

EXCLUSIVE to The Home Depot

RHEEM® Performance™ Power Vent 50‑Gallon Gas Water Heater (1000792787)

Warranty: 6 Years

^^^Power Vent 50-Gallon (1000792787) ($858) + estimated installation fees ($500) = $1,358. 10-year rental contract ($3,169.20 based on $26.41/month average rental charge) - $1,358 = savings ($1,811.20). Terms and conditions apply. See store associate or visit homedepot.ca for details.

Hot Water Tank Prices

Water tanks range in cost from approximately $1,147 to $3,022, with an average cost of $1,692, before taxes. This price includes installation, which is bundled with your purchase.

Water Heater Brand

Water Heater Size

Fuel Type

Average Water Heater Cost

Average water heater installation cost

Total average (without warranty)

10 year parts & labour

10 year labour only

Rheem

40 Gallon Water Heater

Electric

$582

$565

$1,147

$160

$140

Rheem

60 Gallon Water Heater

Electric

$682

$565

$1,247

$160

$140

Rheem

40 Gallon Water Heater

Gas

$862

$565

$1,427

$160

$140

Rheem

50 Gallon Water Heater

Gas

$1,012

$565

$1,577

$160

$140

Rheem

60 Gallon Water Heater

Gas

$1,166

$565

$1,731

$160

$140

Rheem

40 Gallon Water Heater

Hybrid

$2,457

$565

$3,022

$160

$140

*Product costs are calculated based on an average of our regular retail prices in Ontario as of November 30, 2021, exclude applicable taxes, and are subject to change without notice. Installation type and fees are based on Ontario market averages that are current as of November 30, 2021 and are subject to change. Costs shown are for illustrative purposes only and may not apply to all situations. Rental charge information based on Ontario market rates and subject to change. Product warranties vary by product. Terms and conditions apply. See product & service representative for more details.

Our Home Services professionals are authorized and insured.

If you call us before noon, we’ll install your hot water tank unit the same day. Results guaranteed.

Or call 1-800-HOMEDEPOT to speak with a Home Services representative.

7 Choose Your Performance & Warranty

  • 12-year tank, parts and 1-year in-home warranty
  • Superior hot water delivery
  • Enhanced diagnostic capability over Performance Plus
  • Prolonged tank life
  • Our most energy efficient models
  • 9-year tank, parts and 1-year in-home warranty
  • Improved hot water delivery vs. Performance models
  • Passive diagnostic control for fast troubleshooting
  • Greater energy savings
  • 6-year tank, parts and 1-year in-home warranty
  • Basic hot water needs at a nominal price

8 Water Heater Maintenance

Periodical maintenance of your tank or tankless water heater will not only keep the unit running longer and more efficiently, but it may also help lower your costs down the road. Here are 5 helpful tips for maintaining your water heater:

  • Test your Temperature and Pressure relief valve once a year:

Open it up for a couple of seconds and let some water flow out, and then close it. If the relief valve continues to let water out, consult a licensed contractor.

  • Insulate your pipes:

Purchase self-stick 3/8-inch thick foam pipe insulation, and ensure it matches your pipe’s diameter. Slide the foam over the hot-and-cold water pipes as far as you can reach. Insulating the cold water pipe prevents condensation in the summer.

  • Insulate your heater:

Use a hot water tank insulating blanket, such as an R-4.5 foil-covered bubble wrap, which will help maintain heat and save you energy.

  • Set your water heater temperature:

Setting your thermostat at 110°-120°F on a daily basis will supply you with ample hot water for regular usage, while saving you energy.

  • Flush your water heater at least once a year to remove sediment.

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