Short answer
Keep the same fuel unless you have a reason to switch, because changing fuel adds gas line or electrical work. Size by first hour rating, not gallons: it should at least match your busiest hour of hot water use. Then compare UEF (efficiency) and warranty years, and budget for an expansion tank, drain pan and permit where your code asks for them. Fixr puts an installed tank at $600 to $2,500 in 2026.
1. Fuel and venting: keep what you have
Your home already has a gas line and vent, or a 240 volt circuit. Matching it keeps the job simple. Fixr notes that switching fuel often brings in an electrician for added wiring or a specialist for a gas line, which adds cost. The trade-offs are in the gas vs electric guide.
- Gas (natural gas or propane): needs a vent. Atmospheric models vent up a flue by natural draft; power vent models use a fan and need an outlet. Fixr says adding a power vent and its electrical connection can add $300 to $1,000.
- Electric: no vent, but a dedicated 240 volt circuit for most full size tanks.
- Heat pump (hybrid electric): needs space and air around it, a condensate drain, and usually a 240 volt circuit. See the heat pump guide.
2. Size by first hour rating
The first hour rating (FHR) is how many gallons of hot water the heater can supply in an hour starting full. The Department of Energy says to choose a model whose FHR at least matches your peak hour demand, and lists it on the EnergyGuide label (DOE). Work yours out with the tank size calculator.
Tank sizes, installed cost and household size
| Tank size | Installed cost (Fixr 2026) | Household size Fixr pairs it with |
|---|---|---|
| 30 gallon | $550 to $2,100 | 1 to 2 people |
| 40 gallon | $550 to $2,300 | 1 to 4 people |
| 50 gallon | $700 to $2,500 | 3 to 5 people |
| 75 gallon | $1,100 to $3,400 | 4 to 6 people |
| 80 gallon | $1,200 to $3,600 | 6 or more people |
Household size is a rough guide. Two teenagers who shower back to back need more than four adults who shower at different times, which is why the FHR is the number to match.
3. Efficiency: compare UEF within a class
Spec sheets rate efficiency as a Uniform Energy Factor (UEF). Higher means less fuel per gallon heated. Compare it between heaters of the same fuel and similar size. ENERGY STAR says a certified heat pump water heater is typically at least 3 to 4 times more efficient than standard electric and gas models (ENERGY STAR).
4. Warranty and parts
- Tank warranty and parts warranty are separate numbers. Retail listings for the same tank size commonly come in 6, 9 or 10 year versions.
- Anode rod. The rod protects the steel tank and wears out first. Check it every few years: anode rod guide.
- Drain valve. Plastic drain valves are common; a full port brass valve makes flushing faster.
Tank types at a glance
-
01Most common gas
Gas tank, atmospheric vent
Best for: replacing a gas tank that vents into an existing flue or chimney
- Fuel
- Natural gas or propane
- Vent
- Natural draft flue
- Power
- None for most models
- Simplest gas swap when the flue is sound
- Fast reheat, so a smaller tank can reach a high first hour rating
- Propane models are a different version: buy the one for your gas
-
02No chimney
Gas tank, power vent
Best for: gas homes without a usable flue, venting out through a wall
- Fuel
- Natural gas or propane
- Vent
- Fan, side wall
- Power
- 120 volt outlet
- A fan pushes exhaust out through plastic or metal pipe
- Adding one where there was none costs more (Fixr: $300 to $1,000 for the vent and power)
- Stops working in a power cut
-
03No vent
Electric tank
Best for: homes with a 240 volt circuit and no gas
- Fuel
- Electric, two elements
- Vent
- None
- Power
- 240 volt circuit (most)
- Low upfront cost and simple install
- Slower reheat than gas, so compare first hour ratings
- Elements are cheap to replace
-
04Lowest running cost
Heat pump (hybrid) tank
Best for: electric homes with room around the heater and a drain for condensate
- Fuel
- Electric heat pump plus elements
- Space
- Needs air around it
- Power
- Usually 240 volt
- ENERGY STAR: a family of four could save nearly $550 a year against a standard electric tank
- Taller than a standard tank, with a fan unit on top
- Higher price; check local utility rebates
5. Budget for the whole job
Fixr breaks the extras out: labor of about $300 to $1,500, haul away of the old tank at $75 to $500 when it is not included, and permits of $25 to $1,500. Where your system is closed, add an expansion tank, and where a leak would damage the house, a drain pan. The full breakdown is in the replacement cost guide.
Questions people ask
Should I replace a tank with a tankless heater?
It can make sense if you need endless hot water or space, but Fixr notes tankless units often need gas or electrical upgrades and typically cost nearly twice as much as tank models to install. A like-for-like tank swap is the lowest upfront cost.
Is a bigger tank always better?
No. A tank that is too large keeps more water hot for nothing, and it may not fit the space or the drain pan. Size by the first hour rating your busiest hour needs.
What is the difference between a 6, 9 and 12 year water heater?
Makers often sell the same tank size in several warranty versions. Compare the tank warranty and the parts warranty on the listing; do not assume a longer warranty means a longer life in your water.
Do I need a permit to replace a water heater?
Often. Fixr says most local building departments require a permit to replace a water heater and all require one for a first time installation, with fees typically $25 to $1,500.
Can I install a water heater myself?
Where local rules allow it and you have the skills, yes, but gas, venting and 240 volt connections carry real risk. Many places require a licensed installer or a permit and inspection. When in doubt, hire a pro.
Sources
Last reviewed October 29, 2026. Models, codes and listings change; check your heater’s manual and your local code, and follow the maker’s instructions.