For storage tank water heaters, it’s important to consider the FIRST HOUR RATING (FHR), which is the number of gallons a water heater can deliver in an hour starting with a full tank. You’ll find the FHR on the EnergyGuide label.
As the result of recently updated efficiency standards, water heaters under 55 gallons now have a 4 percent boost in efficiency, while water heaters 55 gallons or more have efficiency gains of 25 to 50 percent depending on the technology used—heat pump or condensing. (See the list of water heater types below.)
And don’t assume a new water heater will fit where your old one was. Because of increased insulation and other efficiency improvements, some newer models may be wider and/or taller than your old water heater.
Tankless water heaters don’t hold much water, so the number to look for is the gallons-per-minute rating (GPM). This is the number that tells you how much hot water the heater can deliver over a set period of time. The higher the GPM, the more hot water the unit can deliver. If you have a big family and multiple bathrooms, you’ll need a tankless water heater with a higher GPM. A typical shower, for example, uses up to 2.5 GPM