Natural Gas Water Heaters

Water heaters are the second biggest energy users in a typical home, next to the heating and cooling system. Natural gas water heaters cost less to operate than electric water heaters, on average, and can heat water twice as fast. In fact, consumers can enjoy two bathtubs full of water with natural gas for the same cost of a single tub full of water heated with electricity, on average.

Types of Natural Gas Water Heaters

Storage Water Heaters

The most popular type of water heater for residential use is the storage water heater, which combines a gas burner with an insulated tank to store hot water. A storage water heater works by taking cold water from the home s water supply and moving it to the bottom of the tank where it s heated by a gas burner controlled by a thermostat. Since hot water is lighter than cold water, the heated water rises to the top of the tank where a delivery pipe sends it where it is needed. When the hot water leaves the tank and colder water replaces it in the bottom of the tank, the burner automatically comes on again to heat the new water. The storage water heater contains a relief valve to protect against temperature or pressure that is too high for the tank.

Storage tanks are normally made of steel, with insulated interiors lined with glass or another material to prevent corrosion. Some tanks also contain an anode rod, composed of one or more metals, which attracts corrosion away from the rest of the tank s components.

Byproducts of combustion from the natural gas burner (mainly water vapor and carbon dioxide, the same elements we exhale when we breathe) are vented to the outdoors through a chimney, flue or sidewall vent. The burner is lit by a standing pilot light or by an electronic or spark ignition.

Combination Water/Space Heater

Combination water heating/space heating units are compact systems that require only one unit to heat both water and rooms. These units are ideal for townhouses, condominiums or other dwellings in which space is limited for a water heater and heating system.

The combo-heater system takes hot water from an attached residential gas water heater and circulates it through a closed system to a specially designed air handler. The air handler extracts heat from the water and uses it to warm air. While a fan or blower moves the warmed air through ductwork, the cooled water is returned to the water heater unit for re-heating. The water heater unit creates ample hot water for bathing, cooking, laundering and other uses. If air conditioning is required, the air handler in the combo-heating system is equipped with a cooling unit that operates from a standard air-conditioning compressor.

Tankless or Instantaneous Water Heaters

cabins or recreational vehicles. However, they may not be the best choice for a family that needs large quantities of hot water during a short time period (i.e., multiple morning showers).

Tankless water heaters can be wall mounted or freestanding and are usually located close to where the hot water is used. These compact units have a gas burner that ignites when a hot water faucet is turned on. The burner heats the water instantaneously as it is being used, and turns off when the faucet is turned off. These water heaters can provide from two to four gallons of hot water per minute and, because these units do not store water, there is no standby heat loss.

Hydronic or Boiler Systems

Homes that use hot water or steam from a gas boiler for space heating can also use a coil in the boiler to produce hot water for the home. The coils in this system are long pieces of copper tubing that absorb heat from the boiler water to heat the water inside the coil.

Indirect Water Heater

This system uses the same technology as a boiler system. The difference is that this system includes a separate storage tank to hold the heated water.


All natural gas water heaters must be vented to the outdoors to remove the byproducts of combustion. Atmospherically venting gas water heaters is the most common type of venting option used. Since flue gases from the water heater are warmer than the surrounding air, they will rise naturally through a vertical vent pipe or chimney to the outdoors. Installation and operating costs tend to be moderate because these units do not use fans or other mechanical boosters.

Direct vent or horizontally vented water heaters are designed for installation where vertical chimneys or flues are not available or would be more expensive to install. The vents go directly through an outside wall, and can also bring in combustion air to the gas burner. Most of these units require zero-clearance at the sides and rear, which allows them to be installed in a small area.

Power-vented natural gas water heaters use an electric fan or blower to push or pull combustion gases to the outdoors. This type of venting allows gas water heaters to be installed as far as 40 feet away from an outside wall and in homes without existing vertical vents.

Operating Costs

Many consumers believe mistakenly that the best buy for a new water heater is the one with the lowest purchase price. The cost of owning a home appliance has three components: the initial purchase price, repairs and maintenance, and operating costs.

Natural gas water heaters often cost less to operate than all-electric water heaters because natural gas costs less than electricity, on a national average. The yellow Energy Guide label on a new appliance provides the estimated annual cost to operate it.