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This may seem like a no brainer question, but I wanted to know what are the signs of a hot water tank going bad? I have one in my home that is 20 years old, that runs on gas. I still get hot water, but every now and then in the morning the shower will only get lukewarm.

Now my hot water heater is located on the first floor, and almost ALWAYS I have to run my kitchen faucet on hot for about 3-4 minutes before it starts to get warm, however my dishwasher has scolding hot water (but my guess is, that it is the heating element inside the dishwasher heating up the water)?

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    The time to get hot water at a fixture will differ depending on how far away a fixture is to the hot water source. Yes, most dishwashers reheat the hot water to a hotter temperature. – pdd Apr 21 '17 at 18:29
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    @kozmo - thermostat or tank is most likely - see my answer - Check your gas Company - I know peoples gas has programs to replace - free installation and rebate on the heater etc.. your cost to replace might be under $200 maybe even free. – Ken Apr 21 '17 at 18:38
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    FYI, if it comes up, the "heat-pump" electric tank water heater (energy.gov/energysaver/heat-pump-water-heaters) is much more efficient than the electric resistance heater. The main drawbacks are compressor noise, space requirements, higher initial cost, and higher maintenance liability. See geappliances.com/ge/heat-pump-hot-water-heater.htm. – Jim Stewart Apr 21 '17 at 18:55
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    The electrical requirements of an electric water heater are 208/240 V and at least 30 A to 60 A. If you do not have an existing circuit of that power at the water heater location, that would be an additional expense. – Jim Stewart Apr 21 '17 at 19:04
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There are a few signs of a tank which is about to fail. Unfortunately, how long until failure is not so easy to determine.

Leaks

Leaks are perhaps the most obvious, although maybe not the easiest to spot since the water may be dried up. Check the seam of the side of the tank, as well as on the top and bottom. Look for rust, or actively dripping water. Check the pan under the tank, if installed, for signs of water, especially water that has dried.

Full of sediment

If you hear popping or gurgling when the heater is on, that could be a sign that the tank is filling up with (or already full of) sediment. If you don't get as much hot water as you used to, that can also be a sign.

Check the anode rod

Tanked water heaters come with 1 or more anode rods, which protect the heater by dissolving before the tank itself does. Because the metal tank is in contact with water, it begins to dissolve; the anode rod prevents that essentially by dissolving first. This is the cause of some of the sediment build up in the tank (the rest being from the minerals in the water, or from the pipes themselves). If you check your anode rod and it's completely dissolved, you'll need to replace the tank soon as it has already started to corrode; if it's not completely dissolved, you could replace the anode rod and extend the life of the tank.

The water isn't (as) hot anymore

If it's not heating the water (as well as it used to) anymore, you'll need a new water heater, or at least repairs to your existing one.

Water not always being as hot, or needing to run it longer before it runs hot, may not always indicate a failing heater, though. Those things may be affected by the ambient temperature, how well the pipes are insulated, how far from the heater the fixture is, debris in valves or fixtures, etc. If it is a constant problem, that's more likely to indicate a problem with the heater, but if it only happens sometimes, I'd try to rule out other correlations first.

It hasn't failed, but is an energy hog

It may be more energy efficient to replace the water heater even before it has failed, although that depends on the efficiency of your current heater, energy prices, etc. You'd want to run some calculations to see if this is a reasonable option.

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    An anode rod in a 20-year-old water heater is probably stuck in place. If you try to remove it, you might damage the heater. If this is a standard glass lined steel tank, it is due for replacement. It could fail catastrophically and cause a lot of damage and inconvenience. If it is a monel metal tank, it could go on and on. waterheaterrescue.com/FunStuff/historypages/monel-copper.html – Jim Stewart Apr 21 '17 at 18:31
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You state it is Luke Warm in the morning - you could have a failing thermostat. Since it is Gas you could have a gas leak. The unit is not using the gas being requested. Since it is a GAS unit, many Gas companies will allow you to get credits $$ or checks / rebates to replace the unit - some will install the unit for you for free. Check your Gas company for special offers that they have.

Given what you state that it is 20 years old, my thoughts are nothing else has changed with where the heater is in relation to your shower or kitchen faucet etc... your water pipes are probably not all of the sudden in an ice-bath.

That said I would simply replace the unit which will also replace the thermostat - and looking up the Gas Company Offers on the Internet - you might find your out of pocket expenses to be very minimal maybe $200 or even less. Perhaps if you let them know you were thinking to change it to Electric they will cut you a nice check to keep using their Gas by buying a Gas Replacement.

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