Quick answer

Repair usually makes sense when the tank itself is sound and the problem is a part, such as a thermostat, heating element, igniter, gas valve or relief valve. Replacement usually makes sense when the tank is leaking, the unit is old and failing more often, or a repair would cost a large share of a new heater. If you replace it, it is worth looking at a more efficient model, and in California every water heater must be strapped against earthquakes.

Repair: a failed part on a tank that is not leaking.
Replace: water leaking from the tank itself, rust in the tank, or repeated breakdowns on an older unit.
Efficient options: ENERGY STAR says certified heat pump water heaters use less than half the energy of standard electric models.
California rule: new, replacement and existing residential water heaters must be braced, anchored or strapped.

Signs your water heater needs attention

Water pooling around the base of the tank
Not enough hot water, or water that takes much longer to heat up
Rusty or discolored hot water
Popping or rumbling sounds, often from sediment on the bottom of the tank
Rust or corrosion on the tank, fittings or vent
Water dripping from the temperature and pressure relief valve or its discharge pipe
For gas units, a pilot or burner that will not stay lit

Some of these are parts problems. Others point to a tank near the end of its life. The first step is finding out which.

Repair or replace?

When repair usually makes sense

The tank is not leaking and shows no internal rust.
The failure is a replaceable part: a heating element or thermostat on an electric heater, or a thermocouple, igniter or gas valve on a gas heater.
The unit has been reliable and is not near the end of its expected life.

When replacement usually makes sense

The tank is leaking. A leak from the tank body, not a fitting or valve, cannot be repaired.
Rusty hot water that is not coming from the pipes, which can mean the tank lining is failing.
Repeated breakdowns on an older unit.
A large repair bill. A common rule of thumb is that if a repair would cost about half the price of a new heater or more, replacement is usually the better value, especially on an older unit.

Age is a guide, not a deadline. The manufacture date is printed on the rating label or encoded in the serial number. Water quality, sediment and maintenance all affect how long a tank lasts. Hard water speeds up sediment buildup; our guide to water softeners covers that side.

If you replace it: efficient options

Heat pump water heaters. The U.S. Department of Energy says these move heat from the surrounding air into the water and can be two to three times more efficient than conventional electric resistance water heaters. ENERGY STAR says certified models use less than half the energy of standard electric water heaters. They need space around the unit for air flow and because they pull heat from the air they can cool the room they are in, so a garage or utility area often works well.

Tankless water heaters. These heat water as it flows instead of keeping a tank hot, which avoids standby heat loss. Each unit has a flow limit, so it has to be sized for how many fixtures run at once. Gas units may need a larger gas line and new venting. See tankless water heater installation.

High efficiency tank models. A like for like replacement with a newer, more efficient tank is often the simplest choice when space, venting or budget rule out other options.

Rebates and incentives for efficient water heaters change often. Check with your utility and current federal programs before you buy.

The California earthquake strapping rule

California Health and Safety Code section 19211 requires all new and replacement water heaters, and all existing residential water heaters, to be braced, anchored or strapped to resist falling or moving in an earthquake. It also requires the seller of a home with a water heater to certify in writing to the buyer that the water heater meets this rule. Any replacement should include proper strapping, and it is worth checking an existing heater before you list a home.

Replacing a water heater often requires a permit too; the installer should confirm what your city or the county requires. A professional installation covers the permit, strapping, venting, gas or electrical connections and the relief valve discharge line. See water heater installation.

Keeping a water heater working

Drain or flush sediment on the schedule in your owner's manual, especially if you have hard water.
Have the temperature and pressure relief valve checked. It is a safety device; a valve that drips or will not open needs attention.
Keep the area around the heater clear, especially for gas units that need combustion air.
Watch for small leaks at fittings and valves, and fix them before they cause damage.

Frequently asked questions

How do I know if my water heater can be repaired?

If the tank is not leaking and the problem is a part such as a thermostat, element, igniter or valve, it can usually be repaired. A leak from the tank body means replacement.

Do water heaters in California have to be strapped?

Yes. State law requires new, replacement and existing residential water heaters to be braced, anchored or strapped against earthquakes, and home sellers must certify compliance to the buyer in writing.

Is a heat pump water heater worth it?

It can be. DOE says heat pump water heaters can be two to three times more efficient than standard electric models. They need enough space and air around them, so the location matters.

How is pricing quoted for water heater replacement?

Flat rate, quoted on site before work begins.

Sources

U.S. Department of Energy, Heat Pump Water Heaters
ENERGY STAR, Electric Water Heaters Fact Sheet
California Health and Safety Code, Section 19211

Need help with a water heater?

Wade's Plumbing & Septic repairs and replaces water heaters across Santa Cruz County and nearby Santa Clara County communities. Quotes are free and pricing is flat rate, quoted on site before work begins. Request service or call during office hours, Monday to Friday, 9:00 AM to 5:00 PM.