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Tankless water heaters do not have any storage capacity.  When someone turns on a hot water faucet or the dishwasher, cold water flows into the tankless unit, gets heated to a set temperature, then is piped to wherever it’s needed. These tankless units come in various sizes depending on the size of the household.
Pros: Tankless water heaters are more energy efficient than storage types, and you will not run out of hot water.
Cons: They are definitely more expensive than a conventional storage type. Installation can be more time-consuming adding up the initial costs. Also, depending on the size of your house and household, you may need more than one.

Hybrid heat pump water heaters take warmth from the ambient air and use it to heat water inside a storage tank. Hybrids feature supplemental electrical heating to handle periods of high demand.
Pros: Because heat pump type water heaters use air that’s already warm, they’re very energy efficient — up to three times more efficient than conventional storage type heaters. Energy Star-qualified heat pump water heaters can save an average household up to $300 per year in energy costs.
Cons: These types of water heaters have special requirements. They need lots of unobstructed space around them so they can work efficiently, and they can only be installed in climates where the yearly temperature range stays between 40 to 90 degrees. However, some models include switchable modes, meaning you can shift to a standard, all-electric heating mode if temps are too low

Solar water heaters feature a collector which is a flat box that’s typically installed on your roof. Tubes inside the box circulate cold water, and heat captured from sunlight warms the water as it circulates. The warmed water then returns to a storage tank. Thermostatic controls prevent water from flowing when outside temps are very low. The tank itself usually includes a conventional, supplemental heat source to keep up with demands. Where freezing temps are common, an indirect system is better. Instead of heating household water directly, the unit circulates an antifreeze solution. Sunlight heats the antifreeze as it moves through pipes inside the collector. Then the warmed solution moves through a heat exchanger — often a simple series of coils — inside a hot water storage tank. These solar water heaters qualify for a federal tax credit of up to 30 percent of the installation costs in 2016. To qualify, your hot water heating system must generate at least half its heat from the sun.
Pros: Sunshine is a free as well as a renewable resource. Tax credits cut down on installation costs.
Cons: Initial setup drive up costs, especially if running pipes from the collector to a storage tank is an issue. A backup heat source is usually needed to compensate for very cold or cloudy days.

Determining your water heater needs to be confusing. Your professional water heater installersat Aaron Swiftuse special formulas depending on the type of water heater, the size of your household, and an estimate of your daily usage.

The experts at Aaron Swift will be able to help you determine the capacity and size of water heater you will need. You can start by figuring out how much hot water your household uses at your busiest times. For storage-tank type water heaters, that figure is called “first-hour rating,” or FHR. For tankless heaters, it’s known as “flow rate.”