Water Heating Solutions
Here’s some information to help you decide which type of water heater is best for you. Below are five common types. Some are eligible for incentives, others are not.
Heat Pump Water Heater
Uses built-in heat pump to heat water.
Advantages
- Get a $1,000 INSTANT DISCOUNT at participating retailers
- Produces lots of hot water
- Can save more than $5,000 over the life of the unit compared to electric water heaters*
- Typically has a 10+ year warranty
- Helps dehumidify
Disadvantages
- Requires open room with 6’ or higher ceiling
- Requires condensate drain
- Reduced savings if in an intentionally heated space
- Air filter needs periodic rinsing
- As loud as a dehumidifier
*Compared to an electric resistance water heater as shown on Efficiency Maine’s Compare Water Heating Costs calculator as of 1/30/2025. Your results may differ.
Gas Water Heater
Uses propane or natural gas. Can have a tank or be tankless.
Advantages
- Low operating cost if using natural gas
- Endless hot water (tankless models)
Disadvantages
- High operating cost if using propane
- Requires exhaust venting
- May not work with low-flow fixtures (some tankless models)
Electric Water Heater
Uses electric resistance elements to heat water.
Advantages
- Low upfront cost
- Compact versions available
- No combustion
Disadvantages
- Most expensive way to heat water
- Typically short warranty
- Not ENERGY STAR®
Tankless Coil Water Heater
Built into a central heating boiler. It has no visible tank.
Advantages
- Lasts as long as the boiler
- Takes up no additional space
Disadvantages
- The least efficient water heating system
- Boiler must stay hot all year long
- Can cause boiler to “short cycle” which minimizes efficiency
- Not ENERGY STAR®
Solar Water Heater
Typically panels on roof plumbed to tank in basement with some backup.
Advantages
- Low operating cost
- Low environmental impact
- No combustion
Disadvantages
- High installation cost
- Backup required
- Solar exposure required
Click here for our Guide to Water Heating.