When selecting the best type and model of water heater for your home, you also need to consider the following:
Fuel type, availability and cost: the fuel type or energy source you use for water heating will not only affect the water heater's annual operation costs but also its size and energy efficiency.
Size: To provide your household with enough hot water and maximize efficiency, you need a properly sized water heater.
Energy efficiency: To maximize your energy and cost savings, you want to know how energy efficient a water heater is before you purchase it.
Costs: Before you purchase a water heater, it's also a good idea to estimate its annual operating costs and compare those costs with other less or more energy-efficient models.
It's a good idea to know the different types of water heaters available before you purchase one.
Source Material: US Dept. of Energy