What Size Water Heater Do I Need? Tank vs Tankless Guide

Tank Water Heaters: Sizing by First Hour Rating

Tank water heaters are sized by gallons, but gallons alone don't tell you if the tank can keep up during peak usage. What matters is the First Hour Rating (FHR): how many gallons of hot water the tank delivers in the first hour of use, starting fully heated.

A 50-gallon tank might have an FHR of 60-80 gallons (it reheats incoming cold water as hot water leaves). A fast-recovery gas water heater has a higher FHR than a slow-recovery electric unit of the same size. Always compare FHR, not just tank gallons.

To find your needed FHR: estimate your peak hour usage. A shower uses 10-15 gallons. Running the dishwasher uses 6 gallons. A load of laundry uses 7 gallons (hot wash). Shaving uses 2 gallons. If your peak morning hour includes two showers (25 gallons), a dishwasher start (6 gallons), and shaving (2 gallons), you need an FHR of at least 33 gallons.

Tankless Water Heaters: Sizing by GPM and Temperature Rise

Tankless units heat water on demand. They're sized by flow rate (GPM, gallons per minute) and the temperature rise they can achieve at that flow rate.

A shower uses 2-2.5 GPM. A kitchen faucet uses 1.5 GPM. A dishwasher uses 1-1.5 GPM. Add up everything you want to run simultaneously for your peak GPM demand. Two showers running at once: 4-5 GPM.

Temperature rise is the difference between incoming cold water and your target output (usually 120F). In a warm climate (incoming water at 65F), the rise is 55 degrees. In a cold climate (incoming at 45F), the rise is 75 degrees. Higher temperature rise requires more BTU power or kW capacity, which means a larger (more expensive) unit or a lower achievable flow rate.

This is why tankless performance varies dramatically by climate. A unit that delivers 5 GPM in Texas might only deliver 3.5 GPM in Minnesota at the same output temperature.

Gas vs Electric vs Heat Pump

Gas (natural gas or propane) heats water fastest and has the lowest operating cost in most areas. Gas tanks recover quickly (high FHR). Gas tankless units achieve higher flow rates than electric. Downside: requires venting, which adds installation complexity.

Standard electric is the cheapest to buy and simplest to install (no venting, no gas line). It heats slower than gas, meaning lower FHR for tanks and lower GPM for tankless. Operating cost is higher than gas in most areas.

Heat pump water heaters are the most efficient option, using 60-70% less electricity than standard electric. They work by pulling heat from the surrounding air (like an air conditioner in reverse). They're more expensive upfront ($1,200-$2,500 vs $400-$800 for standard electric) but the federal tax credit (up to $2,000 through 2032) often covers most of the premium. They need 700+ cubic feet of space around them and they cool the room they're in, which is a bonus in a hot garage and a drawback in a heated basement in winter.

The Tank vs Tankless Decision

Tankless saves energy (24-34% less than tank) and lasts longer (20+ years vs 8-12 for tank). But it costs more upfront and may require gas line upsizing, new venting, or electrical upgrades. The breakeven point on energy savings is typically 5-8 years.

For most households replacing an existing tank with a same-fuel tank, a standard tank is the simpler and more cost-effective choice. For new construction, remodels, or situations where you're already doing plumbing work, tankless makes more financial sense because the installation premium is smaller when the walls are already open.

When to Replace

Tank water heaters last 8-12 years on average. Warning signs: rusty water from the hot side only, rumbling/popping noises (sediment buildup), visible rust on the tank exterior, water pooling around the base, and inconsistent hot water temperature. If your tank is over 10 years old and showing any of these signs, replace it proactively rather than waiting for a catastrophic leak that floods your basement.