Finding a new water heater can be a challenge, especially with all the models and manufacturers to choose from. About thirty years ago, many of the heating units being sold were electric, because electricity was cheap and gas was a bit more expensive in some areas. The theory was that electricity would only become cheaper with time.
This theory has fallen apart, both because of increased consumption of electricity and because the price of many commodities that fuel power plants--coal, oil, and uranium--are becoming more expensive as the global demand continues to rise. Man power plants built in the 1970s used petroleum products, and many are still in opperation. Natural gas has been the longstanding alternative; sometimes it is cheaper, and sometimes it is not. The price of coal has been mercifully steady, and will probably see a resurgence in popularity, regardless of what the environmentalists want. The long term trend for electricity should be more expensive in the next few years, but cheaper in the long run thanks to greener, sustainable technology.
Whatever the market for electricity, choosing the right electric water heater is the same as any appliance: Look at all the models, and choose the one that best suits your needs. A bigger heater consumes more energy and more money even if it outperforms electric water heaters of comparative size. The advantage, of course, is that you have a deeper well of warm water when you need it, but larger size means more surface area and more water to heat, so perhaps it may be more expensive. It is certainly more expensive up-front, since it is a bulkier unit, with greater manufacturing costs and heaftier shipping-and-handling.
One of the most interesting things about electric hot water heaters is that they do not always need a tank. There is such a thing as hot-water-on-demand, or an instant heating unit. This is built into a room, and heats the water in the pipe directly with an array of thermal-producing wires. They consume a considerable amount of electricity while in use, but consume little to nothing when hot water is not needed. The hot water also does not need to travel through pipes and loose thermal energy that way. There is no delay before you get hot water.