This is a consumer page on water heating. For more resources related to water heating, visit the water heating topic page.
After heating and cooling, water heating is typically the largest energy user in the home because it is necessary for so many domestic activities. Whether you’re replacing a worn-out, inadequate, or obsolete water heater or looking for the best model for a new house you’re building, it pays to choose carefully. Follow these steps to learn more; often you can substantially reduce your energy use simply through water conservation.
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More U.S. households use natural gas to heat water than any other fuel source, and about 40% use electricity. A small percentage use propane or heating oil. Typical water heaters in the U.S. are electric resistance or atmospheric natural gas tank water heaters. Electric water heaters typically have Energy Factors (efficiency ratings) of about 0.9, while gas ones will be rated about 0.6.
The energy factor is based on site energy use, which is the amount of energy your water heater uses. However, it takes about three times as much source energy (this includes the energy needed to generate and distribute a fuel) to deliver a unit of electricity to the site as gas, since only about 1/3 of the fuel energy that enters the power plant reaches the house. The rest is lost due to inefficiency at the power plant and the power lines. Therefore, an electric water heater that appears to be 50% “better” than a gas one (0.9 Energy Factor versus 0.6 Energy Factor) actually uses much more source energy than the average gas water heater.
There is a lot of good news, though. Manufacturers are bringing many kinds of advanced water heaters to the U.S. market, with much higher efficiency. The big news for electricity users is the Heat Pump Water Heater, which (like any other heat pump) takes energy from the air to heat water. At the same time, the heat pump water heater dehumidifies the air, saving the cost of buying and operating a separate dehumidifier. This is especially beneficial when the water heater is located in a basement and/or in a humid climate. Heat pump water heaters use one-third to one-half as much electricity as conventional electric water heaters.
For natural gas, many customers are choosing tankless or instantaneous water heaters. These are very compact, and generally wall-hung. Their rated efficiency is higher than that of tank units, and some units are Energy Star rated. However, the delivered efficiency gains may be somewhat more modest in typical home use (see table below). And, they can be very expensive to install in retrofit applications, requiring special ductwork and upsizing the gas lines. Condensing gas water heaters are a very promising new entry to the residential market. A condensing gas water heater works like a normal tank-type water heater, except that before the combustion gases are vented outside, the heat in those gases is captured and used to help heat the water in the tank.
In general, most choices available for natural gas are also sold for propane.
Oil users have fewer choices. If you currently have an oil-fired boiler, your best options are to purchase an indirect tank that connects to your boiler (best if your boiler is relatively new), or an integrated unit that provides space heat and hot water in one.
Conventional electric water heaters (other than heat pump water heaters) are not recommended. If you don't have access to natural gas, you may want to consider a heat pump water heater.
Sizing a Water Heater
The capacity of a water heater is an important consideration. The water heater should provide enough hot water at the busiest time of the day. For a storage water heater, this capacity is indicated by its "first hour rating," which accounts for the effects of tank size and the speed by which cold water is heated. First hour rating is included in product literature and on the EnergyGuide label alongside efficiency rating.
For tankless, solar and indirect water heaters, sizing requires a few other calculations that your installation contractor can help you with.
Think about replacement now. If you're like most people, you’re unlikely to go out looking for a water heater until your existing one fails, leaving little time to look for a modern, efficient water heater that better meets your needs. There are a lot of technologies available and the most efficient water heaters are also the hardest to find and the most expensive to purchase. So it pays to think about your options now:
Storage Water Heaters
These are by far the most common type of water heater in the U.S. today. Ranging in size from 20 to 80 gallons (or larger) and fueled by electricity, natural gas, propane, or oil, storage water heaters transfer heat from a burner or coil to water in an insulated tank. Because heat is lost through the flue (except in electric models) and through the walls of the storage tank, energy is consumed even when no hot water is being used.
New energy-efficient gas-fired storage water heaters are a good, cost-effective replacement option for your current water heater if you have a gas line in your house. They have higher levels of insulation around the tank and one-way valves where pipes connect to the tank, substantially reducing standby heat loss. Keep an eye out for the price to come down for newer super-efficient "condensing" and "near-condensing" gas water heaters, which save much more energy compared to traditional models but are currently niche products. For safety as well as energy efficiency, fuel-burning water heaters should be installed with sealed combustion ("direct-vented" or "power-vented). Sealed combustion means that outside air is brought in directly to the water heater and exhaust gases are vented directly outside, keeping combustion totally separate from the house air.
Demand Water Heaters
Tankless water heaters do not store hot water, unlike conventional North American water heaters. In tankless (also known as "demand" or "instantaneous") water heaters, a gas burner or electric element heats water only when there is a demand for hot water. Hot water never runs out, but the flow rate (gallons of hot water per minute) is limited. Eliminating standby losses from the tank reduces energy waste. Before rushing out to buy a demand water heater, be aware that they are not appropriate for every situation. Here are some of the factors to consider:
If you choose a tankless unit, look for a gas-fired model with at least an Energy Factor (EF) of 0.8.
Heat Pump Water Heaters
If you currently have a standard electric resistance water heater, models that use a heat pump are more efficient because the electricity is used for moving heat from one place to another rather than for generating the heat directly. The heat source is outside air or air in the basement or room where the unit is located. Heat pump water heaters are not very common at this time, but their market share is growing. They are available with built-in water tanks called integral units, or as add-ons to existing hot water tanks. A heat pump water heater uses one-third to one-half as much electricity as a conventional electric resistance water heater. In warm climates they may do even better.
Indirect Water Heaters
If you use a boiler, ask your contractor about the feasibility of installing an indirect water heater. These use your boiler as the heat source by circulating hot water from the boiler through a heat exchanger in a well-insulated water heater tank. In the less common furnace-based systems, water in a heat exchanger coil circulates through the furnace to be heated, then through the water storage tank. An indirect water heater is one of the best options because it eliminates the tremendous flue losses associated with gas-fired storage water heaters but without the hassles and extra costs of tankless gas water heaters. When used with a modern, high-efficiency boiler, these energy savings hold true even in the summer when your boiler isn't needed for heat. These systems can be purchased in an integrated form, incorporating the boiler or furnace and water heater with controls, or as separate components. Gas, oil, and propane-fired systems are available.
The efficiency of a combination water and space heating system is indicated by its combined appliance efficiency rating (CAE). The higher the number, the more energy efficient. Combination appliance efficiency ratings vary from 0.59 to 0.90. Look for CAE of 0.85 or higher.
Integrated Water Heaters
These combined units feature a powerful water heater that provides space heating as a supplemental end-use. Heated water from the water heater tank passes through a heat exchanger in a central handler to heat air which is then blown into the home’s duct system. As with indirect water heaters, look for CAE of 0.85 or higher.
Solar Water Heaters
Technologies that use the sun to heat hot water have been around for decades. Solar water heaters can be a great investment because they offer a virtually cost-free and renewable energy source for one of your home’s top energy-users. But because the feasibility and benefits of a solar water heater will vary based on a number of variables, such as where you live, which way your roof is facing, and how many people live in your house, it takes some extra savvy to know what your costs and savings will be.
Solar water heaters are much less common than they were during the 1970s and early 1980s when they were supported by tax credits, but the units available today tend to be considerably less expensive and more reliable. Plus, federal and state tax incentives are available again. The initial cost of a solar water heater is still much higher than other competing technologies, but if you can make the upfront investment (which is easier with tax breaks and rebates), it can save 50–75% of your water heating energy over the long term. Areas that receive sun consistently for 3 or more seasons will not only save more energy, but consumers are likely to have more products to choose from at lower costs. Make sure you find a qualified installer who can properly design and size the back-up water heating system.
Even if you aren’t going to buy a new water heater, you can save a lot of energy and money with your existing system by following a few simple suggestions.
Page last updated December 2012