Electric water heater buying guide
Choosing the right electric water heater starts with understanding the available options, installation requirements, and key features. From traditional storage tanks to high-efficiency hybrid models, today's electric water heaters offer solutions for a wide range of residential and commercial applications.
Use this guide to compare electric water heater types, understand code and electrical requirements, explore key components, and learn what features to consider before purchasing.
Types of electric water heaters
Electric water heaters come in several configurations, each designed for different applications, hot water demands, and efficiency goals.
FULLY ELECTRIC
Tank water heaters
Traditional tank water heaters store heated water in an insulated tank that's ready whenever hot water is needed. Available in a range of capacities, they're the most common choice for residential replacements and light commercial applications.
Best for:
Residential replacements
Predictable hot water demand
Lower upfront installation costs
Light commercial use
Tankless water heaters
Tankless electric water heaters heat water only when it's needed, eliminating standby energy loss while providing continuous hot water when sized properly.
Best for:
Space-saving installations
Homes with moderate hot water demand
Additions and accessory buildings
Point-of-use applications
Hybrid electric water heaters
Hybrid water heaters, also known as heat pump water heaters, use heat pump technology to capture heat from the surrounding air, reducing energy consumption compared to standard electric tank models.
Best for:
Energy-conscious homeowners
Utility rebate programs
Warm climates
High annual hot water usage
Learn more in our heat pump water heater guide.
Point-of-use electric water heaters
Point-of-use electric water heaters are compact, localized units installed directly next to specific fixtures. They deliver hot water instantly, eliminating the long pipe run from a central water heater and reducing water waste.
Best for:
Bathrooms
Break rooms
Garages
Remote sinks
Commercial handwashing stations
Electric water heater code requirements
No matter the location, the installation must follow local energy and building codes. This means making sure the equipment is efficient enough for the building and that everything is properly insulated to pass inspection.
Residential
Residential electric water heater installation usually requires multiple dedicated electrical circuits that can handle the power load and a standard safety valve. The valve needs a proper drain pipe attached to it so any runoff can safely empty out. You may also need to add an expansion tank to contain extra pressure, place a drain pan under the unit to protect the floors from leaks, or put on safety straps if the area is prone to earthquakes.
Commercial
Commercial water heater installations usually need a much heavier-duty electrical hookup and a system that can reheat water quickly to keep up with constant use. For these larger properties, you’ll often have to pipe multiple water heaters together to meet the demand. These setups also regularly use loops and pumps that keep hot water moving through the pipes constantly so it’s always hot the second a faucet opens.
Electric water heater power requirements
Proper electrical planning is essential before selecting an electric water heater.
Electrical service considerations
Tankless electric water heaters typically require multiple dedicated circuits. Verify that you have the right voltage and overall capacity to handle the extra load. You'll also need to double-check that the breaker sizes, wire sizing, and total required amperage all match up perfectly with the manufacturer's specs to keep everything running safely and efficiently.
Electric water heater wiring
Most residential tank water heaters operate on a dedicated 240V circuit, while larger tankless models may require multiple breakers depending on their capacity. Always follow manufacturer specifications and local electrical codes.
Sizing electric water heaters
Choosing the right size electric water heater helps ensure a reliable supply of hot water while maximizing energy efficiency. For tank water heaters, consider the household size and the unit's First Hour Rating (FHR), which estimates how much hot water the heater can deliver during peak demand. For tankless electric water heaters, sizing is based on the required flow rate (gallons per minute) and the temperature rise needed to deliver hot water to one or more fixtures at the same time. Selecting the right size helps prevent running out of hot water while avoiding unnecessary energy use.
Electric water heater installation and placement
Proper placement makes both installation and potential maintenance easier.
Spatial requirements
Allow ample overhead space and general clearance to service heating elements, thermostats, and the anode rod. For hybrid heat pump models, ensure there is adequate surrounding air volume — typically 700 to 1,000 cubic feet — and top clearance so the fan can pull enough heat from the air to operate efficiently.
Inlet and outlet connections
Verify the hot and cold plumbing layout and install a dedicated shutoff valve on the cold water inlet. You will also need to account for a thermal expansion tank to handle pressure changes, and properly route a temperature and pressure (T&P) relief valve discharge pipe to a safe drain or outdoors.
When replacing an electric water heater
Modern insulated tanks are often larger than older models, so verify that the physical dimensions fit the space you’re working with. Also, confirm that the existing breaker and wire gauge match the new unit's wattage, and check for updated local codes requiring permits, drain pans, or earthquake straps.
When installing in a new construction
Planning ahead allows you to centralize the water heater, minimizing long pipe runs to fixtures, which reduces hot water wait times. Ensure blueprints include a dedicated, accessible space with a nearby floor drain, a properly sized electrical panel, and a floor capable of supporting a fully loaded tank.
Electric water heater parts and accessories
Understanding the major components of an electric water heater can simplify maintenance, repairs, and replacements.
Anode rods
Anode rods help protect the tank from corrosion. On average, a traditional anode rod will last about 3 to 5 years, depending on water quality and usage. While hard water can be problematic, softened water carries an electrical current more easily, which causes the rod to sacrifice itself and wear down much faster. Because of that, it will need to be checked on more frequently to maintain it.
Anode rod options include:
Magnesium: Excellent corrosion protection
Aluminum: Better suited for hard water
Zinc: Helps reduce sulfur odors
Powered: Long-lasting, maintenance-friendly protection
Heating elements and thermostats
Heating elements warm the water, while thermostats regulate the temperature. Most standard electric water heaters use two elements — one at the top of the tank and one at the bottom — to manage the heating load.
Single vs. dual heating elements
Single-element units are typically found in small, point-of-use, or compact utility tanks, relying on one bottom element to heat the entire volume of water. Dual-element units are standard for full-sized homes, using two elements to heat the water more efficiently in zones, providing faster recovery times, and a more reliable hot water supply.
Simultaneous vs. non-simultaneous operation
In a standard residential non-simultaneous setup, the upper element fires first to quickly provide hot water to the top of the tank, then power switches to the lower element to heat the rest. This keeps the electrical draw low, usually requiring just a 30-amp circuit. Conversely, simultaneous setups run both elements at the same time to reheat water twice as fast for high-demand or commercial spaces, which doubles the electrical load and requires heavier wiring and a larger breaker.
Tank lining
Because water under pressure is incredibly abrasive and corrosive to bare steel, the interior of the tank must be completely sealed with a protective barrier to prevent leaks. The type of lining used directly impacts the water heater's lifespan, weight, maintenance requirements, and overall cost. Choosing the right material ensures the tank can withstand constant thermal expansion and contraction without cracking.
Common tank lining materials include:
Glass-lined steel
Porcelain enamel
Stainless steel
T&P relief valve
This essential safety device releases excess pressure and temperature to help protect the water heater.
Expansion tank
Expansion tanks absorb pressure caused by thermal expansion, helping protect the plumbing system.
Electrical junction box
The electrical junction box houses incoming electrical connections and should be properly grounded.
Discharge pipe
The discharge pipe safely directs water from the T&P relief valve to an approved drain location.
Drain pan
Drain pans help protect finished spaces from water damage and may be required by local code.
Whether you're replacing a residential water heater, upgrading to a high-efficiency hybrid model, or specifying equipment for a commercial project — Ferguson makes it easy. Shop from Ferguson’s wide water heater selection of electric tank water heaters, tankless electric water heaters, hybrid heat pump water heaters, and the replacement parts and accessories needed for installation and maintenance.