Getting the wrong heater can drastically increase your energy bill, so you really have to think about you decision in the long run. If you're looking to replace your current heater or want to buy one, there are a few things you need to ask yourself.

What type do you need?

First things first, you need to be aware of the different types of water heaters available.

• Storage heaters: There are convectional storage heaters that have a reservoir tank that temporarily stores water before releasing it to your taps. They are cheaper and one of the most popular options.
• Tankless: Tankless water heaters directly heat up the water without the need to store it. The good thing about them is that they heat up the water only when there's a need for it, and this saves energy. They thus have additional safety because the water is not always hot as in storage heaters. However, they are a lot more expensive as compared to storage heaters.
• Hybrid: Hybrid water heaters combine tankless and storage heater concepts. The technology in various models varies, but they generally have a storage tank that temporarily holds water. Hybrid systems normally use multiple heating passes by heating a number of pipes for faster heating. Other models can absorb heat from the air and transfer it to the water. They are very efficient and considerably lower your energy costs.

What fuel type would you use?

 The type of fuel you choose would be a definite determining factor on the operation costs and energy efficiency.

• Solar: Solar hot water heaters are taking up more of the market share each coming dawn. They are a particularly good option in areas where there's adequate sun. You could also choose to have a booster system that works with the solar heater such as gas or electric.
• Electricity: Electricity is a known fuel and it can be used in all types of tanks. The advantage here is that you'll have a reliable supply and higher heating efficiency, but they are normally less energy efficient as compared to solar heaters. However, you can use them as a booster system due to their reliability.
• Gas: Gas systems may be more efficient when it comes to small households as compared to electric heaters.  Gas is also cheaper as compared to electricity. However due to their higher efficiency, electric systems may have lower costs in larger households in the long run.