Water Heater Buying Guide

3 Things to Consider When Replacing your Water Heater

Water heaters are the quintessential behind-the-scenes appliance – likely never thought of until there is a problem. We take our water heaters for granted, which is why you should ensure you are making the best decision when the time for replacement comes. Water heaters account for approximately 20% of your household utility costs according to the Water Heater Guide by Natural Resources Canada*. Taking the time to learn about your hot water needs and purchasing the most efficient option that will cater to your family is very important.

1. Fuel Source

To choose a suitable water heater for your home, you need to be familiar with your current water heater and your needs. The biggest thing to be aware of is how your current water heater heats the incoming water. You will likely be restricted to the fuel source your current unit uses. In most cases changing fuel sources will be expensive. If you are renovating, or building a new home, you are able to choose whichever fuel source is available to you, so do your research into which is the most economical and efficient option in your area. 

The three most popular fuel sources for water heaters are electricity, natural gas, or propane. 

Electric Water Heaters:

  • Uses one or two heating elements that are replaceable 
  • Electrics are less expensive to purchase, but are more expensive to run as electricity is a more expensive fuel source
  • There are high-efficiency options available for electric installations
  • Electrics come in a variety of sizes to fit everyone’s needs

Natural Gas Water Heaters:

  • A gas burner is used to heat the water in the tank
  • Need to ensure air circulation for venting on some models
  • Storage of flammable substances needs to be elsewhere. Some units will have a detection for this, if they do, they will shut down when flammable vapours are sensed.
  • More energy efficient than electric counterparts, but also have a higher initial purchase price

Propane Water Heaters:

  • Propane water heaters are slightly more expensive than natural gas water heaters
  • Propane water heaters are more environmentally friendly than their natural gas counterparts, as propane gas burns cleaner
  • Propane water heaters are best for remote locations or vacation homes, like cottages, as natural gas is often not available.

2. Family Size & Fixtures


The biggest consideration when choosing a water heater is the hot water demand for your family. To determine the necessary capacity of a water heater, you need to look at your family and your hot water needs. You will want to choose your water heater size based on a few of factors: family size and number of fixtures you may use at any given time.

The table below gives a general idea of the size you should aim for based on the number of family members living in your home.

20-40G 40-50G 50-60G >60G*
1-2 people
2-4 people
3-5 people
5+ people

Table 1: Water heater tank size by family size
*add ~10G per additional person

This table is just an estimate. The specifications for a tank-type water heater you really should focus on are the first hour rating (FHR) and the recovery rate. 

The FHR is the amount of hot water a unit can provide in one hour starting with a full tank of heated hot water. Technically, this is the tanks real capacity, as most of the time, the FHR is higher than the tank capacity listed on the carton. 

The recovery rate of your water heater is the amount of water the water heater can provide in a given period of time. The recovery rate depends on the wattage of the heating elements (in an electric water heater), the incoming water temperature, and how hot you are heating the water. 


The specification for a tankless water heater depends on the gallons per minute (GPM) the unit can expel. On a tankless unit, this specifies the amount of water the unit can heat each minute. An average tankless unit in Canada will heat 3.5 GPM. The rate at which a tankless can heat your water depends on the incoming ground water temperature and the temperature you set your water heater at. The more your incoming ground water needs to be heated, the lower your maximum GPM will be. To learn more about tankless water heaters and how they work, see our post on tankless water heaters.

Take the time to investigate your peak hour of hot water usage and determine the best first hour rating for your hot water needs. If both your children shower after dinner, while you are running the dishwasher and doing a load of laundry, you want to ensure your water heater can keep up with that demand. Below is a list of the average hot water usages for the most popular hot water fixtures:

Average gallons of water used per use:

  • Shower: 10G
  • Hand washing: 2G
  • Food washing: 4G
  • Dishwasher: 6G
  • Washing machine: 7G

Try to avoid purchasing a unit that exceeds your daily needs – this will waste money twice. Once by the larger initial purchase price, and twice by the cost to heat the water, keep the unused water hot, which will result in higher energy costs. Ensure you check out the Energy Guide label on the unit, this will let you know what to expect in terms of efficiency and costs associated with running the unit. 

It is important to ensure that you select the correctly sized unit. Your water heater will be in your life for approximately 10 years, so you want to think ahead to what life may look like in that time-period: will your family be growing? Will your water usage go up? For instance, if you have young children now, but they will be teenagers within the next 10 years, your water consumption may rise.

3. Space required

Regardless of the reason for replacement – whether it is proactive, emergency, or an upgrade – you will want to ensure you measure or remeasure the space where your unit will live.

Because it is likely you haven’t replaced your water heater in a while, be sure to remeasure your space before you repurchase a similar unit. New technologies have emerged, and tanks generally have more girth to them to accommodate added insulation to improve efficiencies. 

Tankless water heaters are great because they are so compact but retrofitting them to fit your home can become quite expensive. If you need to install a water heater in a tight space, they are the way to go.

Ensure you have the proper power supply available (if applicable) and enough space for the heater to intake air (if applicable). 

If your space is very limited, and your water demand is low, a point of use unit may be for you. Point of use units are designed for under-the-counter use, cottages, mobile homes, or when space is limited. They come in plug-in units, as well as hard-wired units.

Point of Use

Designed for under-the-counter use or when space is very limited electric water heater can plug into any standard outlet and a glass-lined tank, a pre-installed temperature and pressure relief valve, adjustable thermostat, and an on/off switch with a power indicator light. 

Designed for cottages, offices, mobile homes, or other places where space is limited, hard-wired electric water heaters come equipped with a glass-lined tank, an anti-corrosion magnesium anode, adjustable automatic thermostats, and automatic safety shut-off switches to prevent overheating. These heaters are CSA approved, and can be installed under the counter.

If you need more help deciding what water heating unit would be best suited for you, visit our product selector tool for additional help deciding.

*NRCan Water Heater Guide

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