How to Calculate the Best Size for a Water Heater

According to the U.S. Department of Energy, water heaters are responsible for 12 percent of the average home's energy bill. Choosing the best size for a water heater is important because you want to have enough hot water for all of your needs. The capacity of a water heater is measured by its first hour rating (FHR), which is found on the Energy Star tag. Once you have determined the size water heater you need, you can increase your savings by finding an Energy Star rated water heater, which will save you money over the life of the heater.

Determine the number of people that will be living in the house.

Add one to the number of people living in the home.

Multiply the number found in step two by 12. For example, if you had five people in the home, you would add one to get six, and then multiply by 12 to get 72. This is the minimum FHR that your water heater should have, according to the National Appliance Energy Conservation Act.


  • You can save more money on your energy bill by setting the heater to 120 degrees, which is warm enough for just about any use, rather than 140 degrees, which is the standard setting for most heaters. The U.S. Department of Energy recommends insulating the first six feet of pipes extending from the water heater to reduce energy usage. You can also insulate the water heater itself, but do not cover the thermostat.


  • You do not want a hot water heater that is too large because it will increase your monthly utility bills (heating more water than you need).

About the Author

Mark Kennan is a writer based in the Kansas City area, specializing in personal finance and business topics. He has been writing since 2009 and has been published by "Quicken," "TurboTax," and "The Motley Fool."