Tank capacity and first-hour rating for your household.
Standard tank water heaters are cheaper upfront but less efficient. Tankless (on-demand) heaters are 24–34% more efficient for homes using under 41 gallons per day. Tankless units have a higher purchase price but lower operating cost over time.
First-hour rating (FHR) is the most important spec when shopping for a water heater — it measures how much hot water the unit delivers in the first hour of use. Match FHR to your peak morning demand.