Bigger is not necessarily better when it comes to choosing the size of a water heater. If you install a tank that's too small, you'll run out of hot water before finishing the shower. And if you get a tank that's too big, you're wasting money on heating water they won't use.
The good news is that just by following a few guidelines, you can find the perfect size water heater:
Determine the home's FHR, or first hour rating. That's the measure of how much hot water the heater will deliver during a busy hour, such as first thing in the morning. The FHR is always on the heater's yellow EnergyGuide label, but if you want to double-check it yourself, use the following formula and a four-bedroom house as an example:
Step 1: Allot 12 gallons of hot water per person in the household.
Step 2: Figure the home's maximum occupancy as the number of bedrooms plus 1. In this case, we have 4 bedrooms, so we add 1 and get 5. Now multiply this amount times the 12-gallon allotment and you end up with an FHR of 60. That's the minimum FHR that this home should needs on its water heater.
Consider the energy factor, or EF. The higher the EF, the more efficient the tank is. In our example, you'd want to find the highest EF rating available for a tank with an FHR of 60.
Until the creation of the FHR by the National Appliance Energy Conservation Act, contractors had to use complicated tables and building codes or the minimum standards set by the Department of Housing and Urban Development. But now it's easy to determine exactly the best size to have enough hot water as cost-efficiently as possible.
A circulation pump will keep heated water at the ready.
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