Installing a new water heater is a big decision that affects your home’s comfort, efficiency, and utility costs. Whether your current unit is on its last leg or you’re looking to upgrade to something more energy-efficient, there’s a lot to consider before making the switch.
In this blog, we’ll explain everything you need to know before installing a new water heater so you can make the right water heater replacement choice with confidence.
Before selecting a new water heater, it’s important to know whether your current system actually needs replacing. Many homeowners wait until their water heater completely fails before taking action, but there are clear warning signs that signal it’s time for a water heater replacement.
Most traditional tank water heaters last around 8 to 12 years, while tankless models can last up to 20 years with proper maintenance. If your water heater is approaching or past its expected lifespan, it’s a good idea to start exploring replacement options.
As water heaters age, they lose efficiency. You might notice your utility bills creeping up or that it takes longer to get hot water after a shower or when running multiple appliances. These are signs that your system is working harder than it should, and a newer, more efficient model could save you money in the long run.
If you’ve had to call a plumber multiple times in the past year for leaks, thermostat issues, or heating problems, it may be more cost-effective to replace the unit rather than keep fixing it. Constant repairs add up quickly and still don’t guarantee long-term reliability.
Rust in your hot water or pooling water around the base of the unit are signs of internal tank corrosion or failure. Once a tank starts leaking, it’s beyond repair and needs immediate replacement to avoid water damage.
Recognizing these signs early allows you to make a smart, informed decision rather than rushing to replace a broken unit in an emergency. A planned replacement means you can choose the right system for your home without the stress of being without hot water.
Not all water heaters are created equal. Choosing the right type for your home depends on your household size, energy source, hot water usage habits, and long-term efficiency goals. Understanding the differences between the main types of water heaters helps you make a smart investment that fits your needs and budget.
Traditional tank water heaters store a set amount of hot water — usually 40 to 80 gallons — so it's ready when you need it. These systems are more affordable upfront and relatively simple to install, making them a popular choice for many households. However, once the hot water runs out, you’ll need to wait for the tank to refill and reheat.
Tankless water heaters, also known as on-demand systems, heat water only when you turn on the tap. Because they don’t store hot water, they’re much more energy-efficient and provide an endless supply. They also take up less space and tend to last longer than traditional tanks.
The tradeoff?
Higher initial installation costs and possible upgrades to your home’s gas or electrical system.
Choosing the right size and capacity for your water heater is one of the most important steps in ensuring comfort and efficiency. A water heater that’s too small will run out of hot water quickly, leaving you with cold showers and frustrated family members.
On the other hand, a unit that’s too large wastes energy by heating more water than you actually use. The goal is to find a system that meets your peak demand without overworking or overspending.
Tank water heaters store a set amount of hot water, so the size of the tank should match your household’s daily hot water usage. A general rule of thumb:
Also, consider your family’s lifestyle. If multiple people shower in the morning, or if you often run the dishwasher and washing machine at the same time, you’ll need a larger tank to handle the load.
Tankless systems don’t store hot water — they heat it as it flows through the unit. Because of this, sizing is based on flow rate, measured in gallons per minute (GPM), and the temperature rise needed (how much the water temperature must increase from cold to hot).
To find the right size, add up the GPM of all fixtures you might use at the same time:
For example, if you might run two showers and a washing machine at once, your system should handle at least 6–7 GPM. Then factor in your region’s incoming groundwater temperature. In colder areas, your system will need to work harder to heat water to your desired temperature.
While these guidelines are a good starting point, unique home layouts, appliance efficiency, and usage habits all play a role. Consulting a professional plumber ensures your new system is properly sized, whether you’re installing a tank or a tankless model. Proper sizing also protects your investment, reducing strain on your system and extending its lifespan.
Getting the right size water heater means consistent hot water, better performance, and long-term energy savings. Don’t guess—calculate your needs or get expert advice to make the best choice for your home.
When choosing a new water heater, it’s easy to focus on the upfront price, but long-term energy efficiency plays a major role in how much your system will cost you over time. An energy-efficient water heater reduces your monthly utility bills, lowers your overall environmental impact, and boosts your home's value.
One of the simplest ways to spot an energy-efficient water heater is to look for the ENERGY STAR® label. This certification is given to models that meet strict energy efficiency standards set by the U.S. Environmental Protection Agency.
ENERGY STAR water heaters use less energy to operate without sacrificing performance, making them a smart choice for both your wallet and the planet.
A less expensive water heater might seem like a deal, but it could end up costing you more in the long run if it’s not energy-efficient. Instead of looking only at the sticker price, consider the total cost of ownership, which includes:
For example, tankless water heaters have a higher upfront cost than traditional models but often save homeowners hundreds of dollars each year in utility bills and typically last longer. Over time, this can make them a more economical choice.
Many utility companies and local governments offer rebates or tax incentives for upgrading to energy-efficient water heaters. These incentives can significantly offset the initial cost, making high-efficiency models more accessible than you might expect.
Be sure to check with your local energy provider or speak with a plumbing professional to see what programs are available in your area.
Efficient water heaters tend to run more smoothly, with fewer on-and-off cycles, which reduces strain on internal components. This translates into fewer repairs, less maintenance, and a longer lifespan—all of which save you money over time.
By prioritizing energy efficiency, you’re making a smart, future-focused investment. You’ll enjoy lower bills, a more dependable hot water supply, and a system that supports your household needs without unnecessary waste. When comparing options, look beyond the price tag and factor in the long-term savings that energy-efficient models deliver.
When it’s time to upgrade your water heater, don’t leave the decision to guesswork. The right unit, properly sized and professionally installed, can save you money, improve energy efficiency, and give you consistent hot water for years to come.
At Neighborly Plumbing, we help you every step of the way — from selecting the best system for your home to expert installation that meets all safety and code requirements.
Whether you’re replacing an old tank or switching to a high-efficiency tankless model, our experienced team will make sure the job is done right. There will be no stress or surprises — only reliable service you can trust.
Ready for an upgrade? Contact Neighborly Plumbing today to schedule a consultation and let us help you choose the perfect water heater for your home.
