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Tips for choosing a water heater, buying vs. renting, and maintenance
When it comes time to choose, maintain, or replace your water heater, a bit of know-how can be helpful. Whether you're upgrading your home's plumbing system or dealing with an unexpected breakdown, we've put together this water heater guide—covering types, costs, maintenance, and insurance—to help you make the choices that best fit your needs.
What types of water heaters can I choose from?
Many factors come into play when choosing a water heater, including efficiency, cost, and the unique demands of your home and household. To help you make an informed decision, here's a quick breakdown—including some of the main pros and cons—of the different types of water heaters commonly available on the market today.
Type |
How They Work |
Energy Source |
Pros† |
Cons† |
Reasons to consider this option§:
|
Standard (conventional) water heaters |
• Uses a tank to heat and store water • Continuously reheats stored water to maintain temperature |
Electric and natural gas options |
• Generally cheaper than other types of water heaters |
• Generally not as energy efficient as other water heater options • Need space for a tank |
• You have space for a tank • You want a budget-friendly option. |
Tankless (on-demand) water heaters |
• Heats water as it flows through the unit |
Electric and natural gas options |
• ENERGY STAR ® certified models use up to 30% less energy than a conventional water heater1 • Requires less space than a conventional water heater |
• Limited flow rate compared to a conventional water heater • Higher initial cost |
• You have a smaller household • You have limited space • You have a higher budget. |
Heat pump (hybrid) water heaters |
• Draws heat from surrounding air to heat water stored in a tank |
Electric |
• ENERGY STAR® certified models use up to 70% less energy than a conventional water heater2 • Ground-source heat pump models can provide cooling in summer months3 |
• Requires a large amount of space to draw heat from (minimum of 28.3 cubic metres)4 • Not as efficient in colder climates • Higher initial cost |
• You have enough space • You have a higher budget • You live in a milder climate |
Solar water heaters |
• Uses energy gathered by solar collectors to heat water stored in a tank |
Solar power |
• ENERGY STAR® certified models are up to 60% more energy efficient than conventional heaters5 • Reduces your carbon footprint by directly reducing greenhouse gas emissions6 • Longer life expectancy than other types of water heaters7 |
• Typically generates about 60% of a household's hot water needs, so a backup system is required8 • Works more efficiently in sunnier climates • Higher initial cost |
• You have a higher budget • You live in a sunnier climate • You don't mind installing a backup system |
Condensing storage tank water heater |
• Uses heat exchanger to draw heat from combusted exhaust gases and redirects this heat energy into water stored in a tank |
Natural gas |
• Improved efficiency over standard water heaters9 (ENERGY STAR® certified condensing gas-fired storage tank models use up to 14% less energy10) • Capable of heating large quantities of hot water11 |
• Higher initial cost • Natural gas source required • Need space for a tank |
• You want a higher efficiency version of the standard water heater • You have space for the storage tank • You have a higher budget • You have a larger household with a higher hot water demand |
†This list is not exhaustive and, depending on your individual circumstances, you may have additional pros and cons.
§This list is not exhaustive and, depending on your individual circumstances, there may be other factors you may want to consider when making your decision.
How to choose a water heater that fits your household needs
Let's take a closer look at some of the reasons you may want to select a specific type of water heater:
- Hot water demand. For example, a family of five would typically need more hot water than a single individual.
- Energy source. Will you be using electricity, natural gas, or solar energy?
- Upfront vs. long-term costs. In addition to the purchase price (or monthly rental cost) and the installation fee, factors such as energy efficiency could also affect your ongoing operating costs.
- Space requirements. For example, a tankless water heater might be a better option if you have limited space.
Energy efficiency and conservation
When you think about how much hot water your household uses on a daily basis, it's easy to see how your water heater could account for a large portion of your home energy use.
A more energy-efficient type of water heater, such as a tankless or heat pump water heater—as well as choosing a model with ENERGY STAR® certification—helps to reduce your energy use, leading to both cost savings and a lower carbon footprint.
How much does a water heater cost? Buying vs. financing vs. renting a water heater
Depending on the model you choose, a water heater can often be a significant investment. How you cover the cost—all at once, over time with monthly payments, or through ongoing rental fees—depends on whether you choose to buy, finance, or rent your water heater.
How buying a water heater works
When you buy a water heater, you're paying the full cost for the unit upfront. It's an option that generally offers the best long-term savings, since you won't have to pay any additional monthly fees.
Once you've purchased the water heater, you own it outright. This also means you're responsible for any maintenance and repair costs, so make sure you purchase from a reputable company—and don’t forget to inquire about a longer term warranty for parts and labour.
How financing a water heater works
Financing your water heater lets you spread out the total cost of the unit in a series of monthly payments (which will usually include interest). This means you can own your water heater without having to make a large upfront payment.
But be sure to check your interest costs and read your financing agreement's fine print. For example, many financing agreements require a lien on your home, which could affect your credit. And, like buying a water heater outright, you'll be responsible for maintenance and repair costs.
How renting a water heater works
Renting a water heater usually works out to be the most expensive option overall, but your monthly payment will typically be smaller than if you go the financing route.
A rental could be a good option if, for example, you don't want the hassles of ownership, such as maintaining or repairing the unit. And it may be an ideal choice if you know you won't be staying in your home long-term, or you're uncertain how long you'll be staying.
Can proper maintenance reduce the risk of a leak?
Yes! Regular maintenance helps your water heater run more efficiently and lowers the chances of leaks that could lead to water damage. It also helps prevent premature wear: While every water heater will eventually need to be replaced, regular upkeep can help you get the most out of your unit during its expected lifespan.‡
What are some routine maintenance tips for my water heater?
Not sure what type of routine maintenance your water heater requires? The following maintenance tasks can help keep your water heater working properly and reliably:
- Flush the tank. Draining and flushing your water heater tank annually helps to make your water cleaner. It removes the sediment buildup that can lead to corrosion, which helps prolong the life of both your water heater and also your plumbing.
- Monitor for rust or moisture. Check the tank, its connections, and around its base. Rust or moisture in these areas could be early indicators of leaks.
- Hire a pro for regular inspections. Get an expert to regularly inspect and test the anode rod (if your water heater has one) and the pressure relief valve (also known as a T&P valve) to ensure they're working properly and to repair or replace these components if necessary.
- Insulate water pipes. Insulating the first two to three meters of the hot and cold water pipes connected to your water heater helps improve efficiency by reducing heat loss.
What should I set the water temperature to?
Make sure the temperature on your water heater is set to 60°C (140°F), to help prevent bacterial growth. And, to help prevent scalding, you should also have anti-scalding mixing valves installed, either on your water heater or on your plumbing fixtures, and set the temperature on these mixing valves to 49°C (120°F).7
Does my home insurance cover water heater issues such as leaks or damage to property?
Your coverage will depend on your home insurance policy. For example, if you have home insurance with TD Insurance, you may be covered for sudden and accidental water damage caused by water heater leaks.‡
Want more information about how water damage coverage works and optional coverages you could purchase? Read our guide to water damage insurance.
When do I need to replace my water heater?
Unfortunately, water heaters don't last forever. But how do you know when a replacement is needed? It typically depends on a number of factors, such as the manufacturer's suggested lifespan, the unit's performance, and its age.
It's advisable to consider replacing your water heater if you notice signs like reduced efficiency or if it’s starting to need frequent repairs. Proactively upgrading your water heater before these signs of aging turn into a breakdown or leaks could save you from costly repairs and potential water damage.
And to help ensure you have the coverage you need for an older water heater, check with your insurer to see if they have any replacement requirements for older units.
While installing a new water heater won't have a direct impact on your home insurance premium, it could help reduce the risk of leaks — making it less likely you'll have to deal with water damage as a result of a leaking water heater.
A reliable water heater means more than just hot showers — it plays a big role in keeping your home comfortable and energy efficient.
1https://natural-resources.canada.ca/energy-efficiency/products/water-heaters/tankless/14541
2https://natural-resources.canada.ca/energy-efficiency/energy-star/heat-pump-water-heaters
3https://natural-resources.canada.ca/sites/nrcan/files/oee/files/pdf/equipment/WaterHeaterGuide_e.pdf (page 14)
4https://www.energy.gov/energysaver/heat-pump-water-heaters
5https://natural-resources.canada.ca/energy-efficiency/energy-star/solar-water-heaters
7https://www.canada.ca/en/public-health/services/water-temperature-burns-scalds.html
9https://natural-resources.canada.ca/sites/nrcan/files/oee/files/pdf/equipment/WaterHeaterGuide_e.pdf (page 23)
10https://natural-resources.canada.ca/energy-efficiency/energy-star/storage-tank-water-heaters
11https://natural-resources.canada.ca/sites/nrcan/files/oee/files/pdf/equipment/WaterHeaterGuide_e.pdf (page 23)
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