Replacing your Lake House hot water heater is not top of mind until there’s something amiss. The water isn’t warm, the water flow is slow, the color or smell of the water isn’t right, water is leaking out of the tank, or  more…. you’ve been there.

Recently we noticed that the pilot light of our 19-year-old 50-gallon propane gas hot water heater would randomly go out. We’d been able to relight the pilot light and the unit was still functioning but we knew that we were going to have to replace it soon. We preferred to do the replacement on our terms rather than have an emergency, so we began the quest to find a good replacement unit for our Lake House.

Our first step was to do some research. After almost 20 years, we knew that hot water heater technology had changed. We didn’t expect to see so many alternatives, however!  We soon learned that today’s hot water heaters are uniformly more energy efficient based on 2015 Department of Energy appliance standards outlined in an attached article to this blog (coming soon). We also discovered that some wholly new types of heaters are now available.

We wanted to understand what the best replacement unit might be for us considering the new technology options and our Lake House’s particular features and constraints. As a Lake House owner, we knew that our remotely located property has a few different features from urban locations. We suspected that these features including a septic system, propane gas service, and well water would require extra attention when making any material change to the house’s hot water heater.

Five Types of Water Heaters Options for Us (that might work for you, too)

The current generation of hot water heater systems heavily focus on efficiency. We didn’t expect to find five types of water heaters that might work at our Lake House! Here were the options we found:

1) traditional storage tank heater

2) tankless heater

3) condensing water heater

4) heat pump heater

5) solar powered heater

Due to cold climate considerations with our home’s location, we quickly eliminated the heat pump heater. The solar powered heater was also eliminated since on average Wisconsin has 11% fewer sunlight days!  (To learn more about heat pump and solar tank options see the article attached to this blog.) We narrowed our considerations to the three options.

Once our hot water tank styles were refined, we identified advantages and disadvantages of each option.  Here’s what we learned:

  • Traditional storage tank heaters (our tank style) are the most common type of hot water heater, and very likely the kind you have. They come in various gallon capacities and the hot water is stored in the tank. They are fueled by natural gas, propane gas or electricity.


  • This type of water heater costs less to purchase than either the tankless or condensing water heaters.
  • Installation costs are typically less especially if the old unit is being replaced by a new storage tank heater.
  • New storage tank heaters are more energy efficient than their predecessors.
  • A storage tank heater requires minimal maintenance for safe and dependable operation.


  • Storage heaters remain less energy efficient than both tankless heaters and condensing water heaters.
  • The physical size of a new storage tank water heater is slightly taller and bigger in diameter due to 2015 NAECA regulations which mandated the tanks to be better insulated. In some cases, these bigger tanks don’t fit where the old tank is currently located.
  • Tankless heaters Also known as on-demand heaters, are units that don’t store water but heat water ‘on demand’ when a hot water faucet opens in the house. The moment the system senses demand for hot water, the tankless heater starts to pull cold water into the unit. The water is rapidly heated to a pre-set temperature and the hot water is piped to wherever it’s needed. Tankless units are sized by water flow capacities since no water is stored.


  • These units are significantly more energy efficient than storage tank units because water is heated only when it’s needed.
  • The unit takes up much less space than storage tank heaters.
  • They are less expensive to purchase than the new condensing water heaters.


  • Tankless systems are more expensive to buy than traditional storage tank heaters.
  • Tankless system installation costs can be significantly higher if you’re changing from a storage tank water heater.
  • In cold well water conditions, a gas unit is necessary to heat the water fast enough for the system to meet the hot water demand.
  • If water pressure to the house varies significantly (common with well water), tankless systems may do an auto shutdown when the water pressure inadvertently drops.
  • Tankless systems are sensitive to hard water and water with iron and work best when a water softener is present. Hard water environments (lake wells for example) require the unit to undergo an annual maintenance flush for peak performance.
  • Condensing hot water heaters A condensing storage heater is similar to a conventional model with a few key differences. They’re available in both gas and electric models, they produce exhaust gases that are vented, and they store hot water in an insulated tank. The main difference in a condensing heater is that it recaptures and re-uses the flue gases to preheat the incoming cold water in to the tank. The unit also has internal heat coils in the tank to maximize heat transfer to the water. The unit creates condensate that is released into a house drain. The condensate is acidic and must be neutralized before discharged into your home’s drains and into the septic system if one is present. Crushed stone filter cartridges clean the condensate effluent, but they must be checked annually and refreshed or replaced.


  • These units are the most energy efficient hot water system based on re-using flue gases and the presence of internal coils to heat water faster and hold the heat longer.
  • The condensing heaters often will fit in the same space as a traditional gas water heater allowing for a more straightforward installation.


  • Condensing hot water heaters are the most expensive water heater with a price tag at least twice the cost of the traditional tank storage heater.
  • Additional installation costs are a consideration if the unit can’t use the existing flue or the unit requires the addition of a drain to release of the condensate. A water softener may also be required.
  • The acidic condensate can harm concrete, metal, and other surfaces. It can also kill the beneficial bacteria in the septic system if the effluent isn’t neutralized. It may also damage the septic tank itself.
  • Strict maintenance is necessary to ensure the condensate filtering is effective.

What We Did

After our review of the hot water heaters appropriate for our Lake House, we purchased another traditional 50-gallon tank storage hot water heater fueled by propane gas. While energy efficiency is important to us, other factors and concerns outweighed selecting the most energy efficiency option. Here’s how we got to our pick.

-A tankless hot water system was a problem for a couple of reasons. First, the incoming water from our well is cold (45 degrees F) requiring us to purchase a bigger, more expensive system to make enough warm water to meet our needs.  Plus, the water flow from the well varies in our home. The conversion costs were also prohibitive from our existing storage tank environment.

-The condensing hot water heater was rejected for 3 reasons. First the condensate issue couldn’t be ignored since we have a septic tank. Next, the basic cost of the unit was significantly higher than a traditional tank unit. Finally, we needed to add a floor drain by the heater to handle the condensate effluent which added significantly to our installation cost.

We’re happy with our decision and are enjoying dependable hot water from the new propane gas hot water heater. Hopefully, reading our experience will help you with your selection process of the best hot water heater for your Lake House.  Let us know about your experience!


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Want to Read More??

Department of Energy Standards and Explanations for Hot Water Heaters  Explanation of the 2015 energy efficiency changes and a review of the various types of hot water heaters. 2/2015

Detailed discussion of the different types of hot water heaters:  Very thorough article of all the types of hot water heater options and how they work in a fairly easy to read language with illustrations.

Sizing a new hot water heater  Good advice on how to decide how large your hot water heater should be based on your personal use patterns.  4/10/2018