Energy Efficient Hot Water Heaters

Lowering Energy Costs

The trick for us is being able to take a frugal approach in knowing what to shop for.

You can overspend several hundreds of dollars each year if your hot water heater is inefficient. Of course we’re not going to go that route as you'll see below.

Energy Efficient Hot Water Heater Choices

You've probably come across the most commonly used type of water heater, which is the tank based unit.

Tank Water Heaters. What's nice about these units is you can keep a large amount of hot water on hand in the tank. The biggest drawback, is these types of units aren't as energy efficient as a tankless hot water heater.

Tankless Water Heaters. This will cost you more than a tank unit; usually at least a $1,100 or more to install. The good news is they are much more energy efficient than the tank version to the tune of 25% to 30%.

With the tankless, you will only use energy when you actually run the hot water. This reduces the amount of energy needed. The tank version, on the other hand, continually uses energy to keep the water in the tank hot and is less efficient as a result.

Finding A High Efficiency Hot Water Heater

This tells you how much hot water the unit will provide you within an hour of constant use.

Cost. When you're shopping for different models, you'll want to take a look at the energy efficiency rating sticker on the side of the unit. This will list the estimated annual cost of operation for the unit.

You should also determine the unit's break even cost; which is the amount of time it will take for the heater to pay for itself in efficiency cost savings. You can determine this figure by taking the cost of the unit divided by its annual savings.

Efficiency. After you've figured out what type of hot water heater will be best for your needs, you can now determine which water heater in that category is the most fuel efficient.

The EF (Energy Factor) rating gives you the best estimate of the unit's efficiency. The higher the EF, the more efficient the unit is. EF is a number with a decimal point, usually listed on a separate tag beside the EnergyGuide.

Efficient gas water heaters will have energy factors ranging from 0.5 to 0.7. Electric models range from 0.75 to 0.95.

Even though you can see that the electric units have a higher EF than gas units, it will cost you more to generate heat using electricity compared to gas.