A hot water storage tank holds the water that the heat pump water heater heats up. The capacity of the tank is the amount of water it holds in gallons. Its rating is the amount of that water, in gallons, the heater can supply per hour. How much the heater can heat depends on the source of heat--burner or element--and the size of the burner or element. Properly sizing/choosing the correct hot water storage tank for your home depends on how many gallons of hot water you use.
Estimate your peak hour demand. The peak hour is the hour your household uses the most hot water. When totalling the peak hour demand, make sure you total the number of gallons of hot water used by all persons in your household in that hour.
The Encyclopedia of Alternative Energy and Sustainable Living provides a worksheet that gives the average number of gallons used per task such as shaving, hand dish washing, food preparation and automatic dishwasher use, among others (see References).
Multiply the average gallons of hot water per usage with how many times it's used. That results in the number of gallons used per hour. For example, a shower uses 20 gallons per hour. If there are three people who use the shower in 1 hour, you would multiply 20 (average gallons used) with three (number of times used) to get 60 gallons used per hour. Conduct this calculation for every hot water usage for that hour.
Add up the gallons used per hour to get your peak hour rating. For example, three showers (60 gallons), one shave (2 gallons), one shampoo (4 gallons) and one hand dish washing (4 gallons) during the peak hour adds up to a peak hour demand of 70 gallons.
Select the hot water storage tank size that is within 1 or 2 gallons of your peak hour demand. Using the example above, a 70-gallon peak hour demand for hot water would need a 68- to 72-gallon hot water storage tank to support it, coupled with a hot water heater that has a First Hour Rating (FHR) of 68 to 72 gallons.
If your budget allows, purchase the storage tank and heater with more capacity per gallon to ensure you do not run out of hot water during that peak hour.