If you are in the market for a new water heater, be aware that your options now reach far beyond replacing your current storage tank water heater with one just like it. Because heating water typically consumes from 10 to 15 percent of a home's total monthly energy budget, the best new water heaters focus on heating water efficiently.

There are three common types of water heaters used in homes: storage water heaters, tankless on-demand water heaters, and instant hot-water dispensers. Storage water heaters are the large, familiar white tanks that heat water with natural gas or electricity and hold that heated water until it's needed. Tankless on-demand water heaters are fairly new to the scene--and a very popular alternative because they save energy by heating water as it passes through, eliminating the need for storing water at a high temperature. The third category, instant hot-water dispensers are point-of-use water heaters typically used at the kitchen sink.

In this section, we will take a closer look at all three types. You'll find helpful information on buying a new water heater, DIY installation, and how to repair and care for a water heater.

For information on heating your water with the help of the sun, see Solar Water Heaters.