Water heaters are the second highest source of energy usage in the home. Nearly 20% of the money you spend on your home energy needs goes to heating your hot water.
There are many ways to save when it comes to producing hot water for your daily routines. These range from small things like stopping leaks and drips and insulating water pipes to switching to high efficiency units when it’s time to replace an old inefficient or damaged system. ENERGY STAR® certified water heaters are an easy choice for energy savings, performance, and reliability and use less energy than standard models and will save you money on your utility bill.
Making sure you’re not wasting hot water is an easy, cost-effective way to save money and energy. A leak of one drip per second wastes 1,661 gallons of water and can cost up to $35 per year. Common methods include installing low-flow water fixtures, choosing a cold water setting when washing your clothing, and being mindful to turn off the hot water when you are not actively using it.
Insulating your hot water pipes reduces heat loss and can raise water temperature 2°F–4°F hotter than uninsulated pipes can deliver, allowing you to lower your water temperature setting (video link below). You also won't have to wait as long for hot water when you turn on a faucet or showerhead, which helps conserve water.
Types of Water Heaters
Different types of water heating systems operate off a variety of fuel sources including electricity, gas, propane, oil and solar. Combination or “combo” systems use a water heater to heat both the domestic hot water as well as provide the space heating for the house. Although the multiple options may appear confusing at first, they can generally be separated into two categories: storage and tankless.
- Storage heating systems have insulated water tanks which stratify hot water at the top and cold incoming water at the bottom. Your plumbing is set to draw off hot water (from the top), and the cold water is heated at the bottom. These can be either "direct-fired" or "indirect-fired."
- Tankless, “On-demand”, or “Instantaneous” systems are designed to heat water very quickly and distribute it directly through your pipes. These can be "no coil" or "coil" types.
Planning Ahead
An average water heater lasts about 10-15 years. Replacing your old water heater towards the end of its life means you can realize savings earlier while helping to avoid a costly clean-up if your old unit fails. Since no one system is just right for every setting, it's worth doing some research ahead of time so you can be prepared when replacement time comes. The energy factor (EF) indicates a water heater's overall energy efficiency based on the amount of hot water produced per unit of fuel consumed over a typical day.
This includes:
- Recovery efficiency – how efficiently the heat from the energy source is transferred to the water
- Standby losses – the percentage of heat loss per hour from the stored water compared to the heat content of the water (water heaters with storage tanks)
- Cycling losses – the loss of heat as the water circulates through a water heater tank, and/or inlet and outlet pipes.
The higher the energy factor, the more efficient the water heater. However, higher energy factor values don't always mean lower annual operating costs, especially when you compare fuel sources. Product literature from a manufacturer usually provides a water heater model's energy factor. Don't choose a water heater model based solely on its energy factor.
When selecting a water heater, you'll also want to consider:
- Initial cost, including purchase and installation
- Lifetime energy costs, which typically far exceed initial costs
- Warranty, which can be an indicator of product life
- Capacity, to ensure adequate hot water
- Space requirements
- Incentives, including rebates and tax credits
Find information about rebates and compare lifetime costs for water-heating systems with our online calculator.
Energy.gov offers an entire section on water heating including ways to save on your bill, DIY projects, and sizing a new water heater (see link below).
