Don’t let a new water heater burn your budget – Bankrate.com

Willowpix/Getty ImagesNothing will wake you up faster than turning on the shower and discovering theres no hot water. It could be an indication that its time to replace your water heater.

The cost of a water heater depends on several factors, such as the type of tank and the labor to install the unit. Storage water tanks average between $650 and $850. Tankless water heaters, which do not store water but use special coils to heat water when you need it, cost between $160 and $1,500.

The nationwide average cost of a water heater is $1,005, including installation.

With such an array of options, shopping for a new water heater overwhelms some people. They have to pick a unit with the capacity to handle the volume of hot water used in the home and one that fits in the designated space in the house.

The obvious difference between traditional storage water heaters and tankless heaters is the size of the units. But the way they heat the water also differs.

Storage water heaters generally cost less and handle large volumes of water better than tankless water heaters, making them a popular choice for families. However, tankless water heaters tend to be more energy-efficient and have a longer life span.

It is possible for a homeowner to install a water heater on his own, but most people hire a professional and need to consider the installation cost when shopping for a system. Installation costs vary depending on the price of labor, the type of water heater, the condition of the existing plumbing, and the permits required.

On average, a 40-gallon water heater and installation will run you $950. The average cost of a tankless water heater and installation is $1,700.

The power source for water heaters can come from gas, electricity or solar energy. Gas water heaters are less energy-efficient than electric ones, but gas heats up water quicker and often costs less. Solar-powered water heaters use energy from the sun and can be up to 50 percent more efficient than gas and electric heaters. But they may not provide enough energy to heat the water on cloudy days, especially during peak use.

Homeowners wondering whether its time to replace the water heater can look for certain signs that indicate the unit is failing. These include leaks coming from the tank, water pooling on the floor around the unit, and rust-tainted water. Failing water heaters also make rumbling or banging sounds and stop heating as efficiently as they once did.

Even if the water heater doesnt show these signs, it may be time to replace the unit if its past its life expectancy. Storage water heaters last 10 years on average, and tankless systems last between 10 and 20 years.

Before shopping for a water heater, evaluate your water usage. This information will help you select a water heater that has the capacity you need, especially during peak morning and evening hours.

When selecting a water heater, its also important to consider the available space for the unit, as well as the existing plumbing hookups and power supply. Switching from a storage tank water heater to a tankless unit or replacing an electric system with a gas one may require additional work to make the area compatible with the new system.

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Don't let a new water heater burn your budget - Bankrate.com