Storage Water Heaters | Department of Energy

Author: Sam

Jun. 09, 2025

Storage Water Heaters | Department of Energy

Conventional storage water heaters remain the most popular type of water heating system for the home. Here you'll find basic information about how storage water heaters work; what criteria to use when selecting the right model; and some installation, maintenance, and safety tips.

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How They Work

A single-family storage water heater offers a ready reservoir -- from 20 to 80 gallons -- of hot water. It operates by releasing hot water from the top of the tank when you turn on the hot water tap. To replace that hot water, cold water enters the bottom of the tank through the dip tube where it is heated, ensuring that the tank is always full.

Conventional storage water heater fuel sources include natural gas, propane, fuel oil, and electricity. Learn more about fuel types available when selecting a new water heater.

Since water is heated in the tank until the thermostat setpoint temperature is reached, energy can be wasted even when a hot water tap isn't running due to standby heat losses, which result from the tank losing heat to the surrounding environment. Only tankless water heaters -- such as demand-type water heaters and tankless coil water heaters -- avoid standby heat losses. Some storage water heater models have heavily insulated tank, which significantly reduce standby heat losses and lower annual operating costs. Look for models with tanks that have a thermal resistance (R-Value) of R-24 and above to avoid adding an insulation blanket (electric water heaters only).

Gas and oil water heaters also have venting-related energy losses. Two types of water heaters -- a fan-assisted gas water heater and an atmospheric sealed-combustion water heater -- reduce these losses. Visit the Energy Basics site to learn more about how conventional storage water heaters work.

For low energy bills the best choice to consider are heat pump water heaters and solar water heaters. These water heaters are usually more expensive but they have significantly lower annual operating costs that result in short payback periods.

Selecting a Storage Water Heater

The lowest-priced storage water heater may be the most expensive to operate and maintain over its lifetime. While an oversized unit may be alluring, it carries a higher purchase price and increased energy costs due to higher standby energy losses.

Before buying a new storage water heater, consider the following:

  • Size and first hour rating
  • Fuel type and availability
  • Energy efficiency and costs.

Installation and Maintenance

Proper installation and maintenance of your water heater can optimize its energy efficiency.

Proper installation depends on many factors. These factors include fuel type, climate, local building code requirements, and safety issues, especially concerning the combustion of gas- and oil-fired water heaters. Therefore, it's best to have a qualified plumbing and heating contractor install your storage water heater. Be sure to do the following when selecting a contractor:

  • Request cost estimates in writing
  • Ask for references
  • Check the company with your local Better Business Bureau
  • See if the company will obtain a local permit if necessary and understands local building codes, etc.

If you're determined to install it yourself, first consult the water heater's manufacturer. Manufacturers usually have the necessary installation and instruction manuals. Also, contact your city or town for information about obtaining a permit, if necessary, and about local water heater building codes.

Periodic water heater maintenance can significantly extend your water heater's life and minimize loss of efficiency. Read your owner's manual for specific maintenance recommendations.

Routine maintenance for storage water heaters, depending on what type/model you have, may include:

  • Flushing a quart of water from the storage tank every three months
  • Checking the temperature and pressure valve every six months
  • Inspecting the anode rod every three to four years.

Improving Energy Efficiency

Storage-Tank vs. Tankless Water Heaters: Pros, Cons, and How to ...

When it's time to choose a new water heater, you'll find several design options available. Each type comes with its own set of advantages and disadvantages. The best water heater for your home depends on your specific needs, space constraints, energy preferences, and budget. In this guide, we compare the two most popular designs - storage-tank and tankless water heaters - to help you make an informed decision.

Storage-Tank Water Heaters

Storage-tank water heaters are the most common type found in Chicago homes. These systems store hot water in a large tank and can operate on electricity, natural gas, propane, or fuel oil. Below, we break down the advantages and disadvantages of this conventional system.

For more information, please visit Hot Water Tank Storage.

Storage-tank water heaters work by heating and storing a set amount of water in a large reservoir. When hot water is needed, it’s drawn from the tank, which then refills and reheats to maintain a steady supply.

Energy Efficiency Considerations

These heaters generally have an Energy Factor (EF) rating of around 0.67, making them less efficient compared to newer systems. They can lose up to 15% of their energy due to heat loss from the tank.

Lifespan and Maintenance Requirements

Storage water heaters typically last between 10 to 15 years with proper maintenance. However, regular flushing of the tank is necessary to prevent sediment buildup, which can reduce efficiency and lifespan.

Installation Costs and Space Considerations

Storage-tank models are usually inexpensive to purchase and install compared to tankless systems. However, the new National Appliance Energy Conservation Act (NAECA) standards have increased tank sizes, meaning these systems now require more space.

Advantages of Storage-Tank Water Heaters

  • Available in a wide range of tank sizes, usually from 20 to 80 gallons.
  • Lower upfront costs for both purchase and installation.
  • Can operate on multiple fuel types (electricity, gas, propane, or fuel oil).

Disadvantages of Storage-Tank Water Heaters

  • Limited supply of hot water for extended use.
  • Energy loss due to radiant heat from the tank.
  • Require more space due to larger tanks mandated by energy standards.

Think a tank storage water heater is right for your home? Call ABC today at 888-868- for Chicago, 813-452-, or reach out online to schedule service!

Tankless Water Heaters

Tankless water heaters, also known as instantaneous or on-demand water heaters, do not have a storage tank. Instead, they heat water instantly as needed, using electric elements or gas burners.

Rather than storing water, tankless systems use high-powered burners to heat water as it flows through the unit. This results in an endless supply of hot water, making them ideal for homes with high demand.

Energy Efficiency and Flow Rate Limits

Tankless water heaters are generally 20% to 30% more efficient than storage-tank models. Their Energy Factor (EF) ratings typically average around 0.75. However, the hot water flow rate is limited by the size of the unit, so larger households may need more than one unit.

Long-Term Cost Savings

Though tankless systems tend to have higher upfront costs, they offer long-term savings on energy bills due to their efficiency. They also have a longer lifespan, lasting 20 years or more with proper care.

Installation Challenges and Space Requirements

Tankless water heaters are compact and can be mounted on walls, saving space. However, they can be more complicated to install, often requiring modifications to your home’s plumbing or electrical system.

Advantages of Tankless Water Heaters

  • Energy-efficient, reducing energy usage by up to 30%.
  • Endless hot water supply for as long as needed.
  • Compact design that saves space and can be wall-mounted.
  • Long-lasting, with a lifespan of 20+ years.

Disadvantages of Tankless Water Heaters

  • Higher upfront costs and potential for complex installation.
  • Limited hot water flow rate, especially if multiple fixtures are in use simultaneously.

Is a Tankless Water Heater Right for Your Home?

For advice on whether a tankless water heater fits your needs, call 888-868- to speak with our Chicago plumbers, or 813-452- if you’re located in Florida.

Water Heater Replacement, Repair & Maintenance Services in Chicago and Florida

Choosing the right water heater is a crucial decision that can impact your home's comfort and energy usage. Whether you're leaning toward the lower upfront costs of a storage-tank system or the energy savings of a tankless model, it’s important to weigh the pros and cons based on your specific situation.

If you need expert guidance on selecting, installing, or maintaining your water heater, our experienced plumbers are here to help. For service in Chicago, call 888-868-. For assistance in Florida, call 813-452-. We’re ready to provide the answers you need to enjoy reliable, energy-efficient hot water at home.

Also check the following blog post: What's the Purpose of a Water Heater Expansion Tank?

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