Before you buy a new water heater, see if you qualify for the Energy Savings Assistance Program. If you qualify, you may receive a new water heater and other energy-efficient appliances and services for free.
Learning how your home uses energy is the first step to saving. Start saving today by using our Home Energy Survey to understand your energy use.
Lower the thermostat on your water heater — 120° F is sufficient for most common uses. A 10° F reduction can save up to 5% on water heating costs.
Water heaters are the next largest energy consumer in the home after space heating and cooling. According to the American Council for an Energy Efficient Economy, heating water accounts for 19% of your home’s energy consumption, which is about $300 per year. They also last a long time before needing to be replaced. This means that if you are in the market for a new water heater, your choice can greatly influence your cumulative energy costs over the next 10 to 15 years. If you're not replacing your water heater, there are several measures you can take to improve the efficiency of your current system.
While the majority of homes use natural gas to heat their water, 40% use electricity, and a small percentage use alternative fuels such as propane, heating oil, and solar. The efficiency of water heaters is measured by the Energy Factor (EF), which is a ratio of the energy output of the water heater to the total energy going into the water heater. The higher the EF, the more efficiently the water heater performs.
You may not be able to decide the fuel type of your water heater, especially if you moved into a home with an existing working water heater or if you live in a condo or apartment. If you can choose, avoid electric heaters, as these can cost twice as much to heat your water than natural gas heaters. While electric heaters are more efficient (EF 0.9) than gas water heaters (EF 0.6), this is a misleading comparison. It takes 3 units of fuel to produce 1 unit of electricity, plus there are losses along the way in delivering the electricity to your home. This makes using electricity more costly and fuel intensive than heating with natural gas. If you don't have the option to switch to a gas water heater, a heat pump water heater is an efficient electric option.
No matter what technology you choose, you should consider purchasing the most efficient option in your budget. Additionally, you can make small lifestyle changes and improvements to your existing heater that can drastically reduce your utility bills.
Storage Tank. This is the most common type of water heater in U.S. homes. High efficiency gas storage tanks differ from conventional storage tanks in that they have more insulation, heat traps, enhanced burners, and sometimes a power vent to improve gas combustion. The most advanced models have an EF of 0.70, saving 7.5% of water heating energy over conventional storage tanks.
Tankless or Demand. Unlike storage tank heaters, tankless heaters don't maintain a constant supply of hot water and therefore take up much less space. When you turn on the hot water tap, sensors trigger the gas burner to activate a heat exchanger. The water enters the heat exchanger and flows to the tap once it has reached the preset temperature. New tankless water heaters have an EF as high as 0.98. While they are more efficient and ideal for homes with low water use (up to 34% over traditional storage tanks, and up to 14% for high water use homes), a study by the National Resource Efficiency Lab found that you can save up to 50% of water heating energy by placing smaller demand heaters at each water outlet, such as showers, the dishwasher, and clothes washer.
Gas Condensing. This is one of the newest technologies available. They look and function similarly to high efficiency storage tanks, but with the added benefit of capturing the combustion gases to help heat the water rather than directly venting them out. While gas condensing water heaters are currently more expensive, you can save $100 per year off your utility bills, and even more for larger families.
Heat Pump. If electric water heating can’t be avoided, consider heat pump water heating. Energy is extracted from the air to heat a pressurized refrigerant, which is then passed through condenser coils running through the water tank, heating the water. This runs much like a refrigerator running in reverse. While the pump extracts energy from the air, it also dehumidifies the space, which can help maintain better air quality for humid climates or moist basements.
There are also indirect options if your home has a boiler, which can integrate water heating with space heating, and solar water heaters. A properly installed solar thermal system can save 50-75% of water heating energy. Although numerous tax incentives and rebates decrease the initial and installation costs, solar is still much more expensive and may not be the most cost-effective option for your home.
Most major appliances, electronics, and lighting must meet specific energy standards outlined by the U.S. Department of Energy. The appliances are tested, with their energy use and efficiency displayed on the yellow EnergyGuide labels that you see on models in stores. Although there are some differences between specific appliances, generally the label compares the estimated annual operating cost against similar models and states how much energy the appliance is expected to use annually. The EnergyGuide label will also display the ENERGY STAR® logo, if the particular model qualifies. For more details see, Learn How to Use the Energy Guide Label, 2011.
ENERGY STAR® is a joint program of the U.S. Environmental Protection Agency and the U.S. Department of Energy. The program sets minimum efficiency standards for appliances and building products in order to recognize and label the top performing models on the market. The standards are more rigorous than federal standards, and depend on product category. A list of qualified products can be found online at www.energystar.gov.
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