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Compare Natural Gas Water Heaters

When comparing hot water heaters, there are few things you need to keep an eye out. First of all, you need to check two important rating before you make your purchase. One of them is the energy factor (EF) and the other one is first-hour recovery (for storage tank heaters) or the flow rate (for tankless). 
EF rating is the efficiency rating of your unit. Hence, understanding the EF rating is pretty easy - the higher the number, the more efficient the unit. Also, this helps interpreting the recovery time for the whole system. The higher the EF number, the more hot water you will receive in the first hour after you open the spigot. These changes when you are dealing with a tankless water heater. In the case of tankless water heater, you have to keep in mind that the lower groundwater temperature can cut the heater's flow rate by half. Therefore, when shopping for one, you have to make sure that the flow rate of the system is what you need based on the incoming winter water temperature.

The only thing similar between a conventional hot water heater and a condensing gas water heater is that they both have tanks, but that is the only similarity you shall find. The idea behind these units is that instead of sending hot exhaust gas out of the flue, it blows it through the coil which is located at the bottom of the tank. The water that flows in collects most of the heat energy and gets heated up. This is the reason why condensing gas water heaters are so efficient (about 96 percent thermal efficiency). Although these units are storage tank units and there will be some energy lost in the "stand by", the increased efficiency highly empowers it. At the moment condensing gas water heaters cost about $1200 on average.
Like conventional heaters, condensing gas heaters have a tank. But that's where the similarity ends. Instead of sending hot exhaust gases out the flue, which wastes energy, this heater blows them through a coil at the bottom of the tank. Incoming cold water flows around the coil and collects most of the heat. That's why condensing gas water heaters are so efficient (up to 96 percent thermal efficiency). Even though it's a storage tank design with “standby loss,” the increased efficiency more than offsets that loss. Condensing gas water heaters cost about $2,000 (from online sources like pexsupply.com—home centers don't sell this style right now). But by mid-2011, manufacturers will begin introducing lower-priced models (about $1,200) at home centers.
A condensing gas heater is the most energy-efficient, gas-fired tank-style water heater on the market.
“First-hour” recovery rate is incredible—you'll never run out of hot water.
It requires gas line and venting reconfiguration.
There's no “real-world” experience on tank life or repair costs.
Can you install it yourself?
If you know how to reconfigure gas pipe, install new venting and add a 110-volt receptacle, you can install this heater.
Is this system right for you?
If you're replacing an existing gas water heater and need lots of hot water for long or multiple showers and tub fills, and want a high flow rate in summer and winter, this may be the way to go. It requires the least amount of repiping and has a faster payback.

Conventional gas water heaters
Most of the storage-tank water heaters are basically steel cylinders that have a cold water inlet pipe, which brings the cold water in. The water then gets heated inside the tank and is then carried out through the hot water pipe. Another pipe that protrudes out of the tank has the temperature and pressure relied valve, which opens in case either of them exceed the preset level. On top of that, you will also find a drain valve that is located near the bottom of the tank, and a control unit which is located on the tank to control the temperature of the water. In gas models, there is an option for controlling the pilot light.
Gas is the fuel of choice if you already have natural-gas service or can run a gas line to your home economically. Gas models cost more than electrics. But on the basis of national-average fuel costs, a gas water heater will cost you about half as much to run as a comparable electric model. Thus, a gas heater might amortize the up-front difference in cost in as little as a year. While you'll also find oil-fired storage heaters, they're relatively expensive, because they include the tank and an oil burner. That's why homes with oil heat typically use an electric water heater.
-Lowest upfront cost.
-Easiest to install.
-No fans or pumps to burn out. Proven reliable over decades of use.
-Less efficient; more expensive to run.
Is it for you?
If you need an immediate replacement, you don't plan to stay in your home for years or you just don't use a lot of hot water, a conventional unit may be your most cost effective option.