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Hot water is one of the highest energy expenses for households. Water heaters are the second-largest energy expense after heating and cooling. Choosing the most energy-efficient option for your home can help you save money. American households spend approximately $400 to $600 per year on water heating, making up 14%-18% of an average household's utility bill. Investing in an energy-efficient water heater can significantly reduce energy bills.

Are There Different Types of Water Heaters?

Various types of water heaters operate differently and offer pros and cons. Before replacing your old water heater, it's important to understand how water heaters operate, how they can benefit a home, and their potential downsides are.

Conventional

Conventional water heaters store hot water in storage tanks. A conventional heater's insulated tank keeps the water warm until someone in the house uses hot water. The tank's capacity determines the available amount of hot water a household can use at one time.

When the tank empties, it can resupply hot water only after it heats more water. Depending on how much water a household uses, family members may have to wait a certain amount of time for the tank to refill and heat more water before using hot water again.

A conventional water heater features a pressure control valve and a temperature control valve. The pressure control valve regulates pressure, lowering it if it exceeds 150 pounds per square inch (PSI). The temperature control valve releases heat and moderates temperature, preventing the heater from exceeding 120 degrees Fahrenheit. You can use electricity or gas to power a conventional water heater.

Conventional water heaters are the most common type found in households. They limit the amount of water a family can use, but they typically have the lowest up-front cost and are easy to install.

Tankless

A tankless water heater heats water on demand. It lacks a tank, and it's designed with modern technology that allows it to heat water while it flows through the system. When you turn on a hot water faucet or an appliance that uses hot water, the water instantly flows through heated coils. Within approximately 15 seconds, the water reaches its expected temperature and travels where you need it. Because they are not limited by storage tank capacity, tankless water heaters can supply almost endless amounts of hot water.

Tankless water heaters can be powered by gas or electricity. A tankless water heater typically has a higher initial cost than installing a conventional water heater, but tankless heaters can provide unlimited hot water. With a tankless water heater, you can use hot water to run the dishwasher, then take a hot shower afterward without waiting for a storage tank to replace the used hot water.

Tankless water heaters are also more efficient than conventional water heaters. They only heat water when it's needed, so the system doesn't waste energy heating stored water. However, tankless water heaters can become overwhelmed and shut down.

Heat Pump

A heat pump water heater is also known as a hybrid water heater. It heats water by pulling heat from the air or the ground. Since it doesn't generate heat directly, it conserves some energy. It only uses electricity to move heat, unlike other water heaters that use energy to generate heat.

Heat pump water heaters require more space than other water heater types and require vertical space while sitting on top of a water tank.

Condensing

Condensing water heaters heat water using unused gas fumes. A condensing water heater funnels natural gas exhaust fumes from a home's natural gas system. It then sends them through a coil at the bottom of a storage tank, heating the water inside. Condensing water heaters typically only come in larger models. This makes them a good choice for families that use large amounts of hot water.

This type of water heater is an excellent option for households that already use natural gas because it conserves energy by using leftover gas fumes. However, it may not be the best option for homes that do not use natural gas.

Solar

Solar-powered water heaters operate on energy drawn from sunlight, making them a very energy-efficient option. A solar-powered water heater uses a closed-loop system to transfer energy from solar panels to a heat-conductive material. The heat-conductive material then heats the water inside the system's tank.

A solar-powered water heater is a great choice for homes that already use solar panels, but it may require a backup energy source on cloudy days.

Which Water Heater Is Most Efficient?

The most efficient water heater for your home depends on how much water you need and expect to use. Electric tankless heaters are typically the most energy-efficient option, but your home may benefit more from a conventional water heater if your household uses large amounts of water. Additionally, you might save more energy with a gas-powered or solar-powered water heater if your home already has gas power or solar panels.

How Can I Rate Hot Water Heater Efficiency?

You can determine a water heater's energy efficiency using the energy factor (EF). The energy factor is based on the amount of hot water a water heater produces per fuel unit consumed in one day. It indicates how much hot water a system can provide using a certain amount of fuel. The energy factor considers the following details:

• Cycling heat losses: Cycling loss is the amount of heat a system loses while water circulates through a tank, inlet pipes and outlet pipes.
• Standby heat losses: Standby loss is how much heat water loses while it's in storage and not being used. This applies to water heaters with storage tanks.
• Recovery efficiency: Recovery efficiency refers to how efficiently a water heater's energy source transfers heat to water.

A higher energy factor indicates that a water heater operates more efficiently than other models. However, a high energy factor doesn't always guarantee a lower annual operating cost. Your system's operating cost depends on your home's fuel source. Looking at your heating bill can indicate how much your fuel source will affect your system's efficiency. Water heaters with an Energy Star label are more efficient than other models. You can even earn government tax credits when you purchase a water heater with an Energy Star label.

How Can I Choose the Best Water Heater for My Home?

Before you invest in a new water heater, you should determine which type of water heater will offer the most savings while providing you with sufficient hot water. While living without a water heater is technically efficient, it is not comfortable or practical. Having a water heater that meets your needs while using the lowest amount of energy possible is the best way to conserve energy and save money.

Before installing a new water heater, consider how much hot water your household uses and how quickly you want it to warm up after each use. A tankless water heater is an excellent option for families that need continuous hot water.

You also need to make sure you choose the right size water heater. Using a water heater with a tank or system large enough to keep up with your water usage prevents it from overworking and using an excessive amount of energy to operate.

A tankless water heater can become overwhelmed if family members use more than two showers at a time or run multiple hot water appliances simultaneously. If your family plans to use a lot of water at one time, you may want to consider installing a large conventional water tank or two tankless systems.

It's also important to consider your budget. While a tankless water heater can potentially save you more money on your energy bills than a conventional system, it has a higher initial cost than a conventional water heater. It's also important to consider your home's current energy source. If you already have a gas or solar power source, you can most likely save the most money with a water heater that operates on the same energy source.

Can Regular Maintenance Improve Water Heater Efficiency?

Your water heater's efficiency also depends on how well you take care of it. Regular maintenance can improve your system's efficiency, prolonging its life span and saving you more money. If your water heater has a tank, you should clean it regularly to remove any minerals or sediment. Cleaning your water tank reduces corrosion and helps your system last longer.

Tankless water heaters also require regular cleaning. You should clean your tankless water heater's components at least once a year. No matter what type of water heater you choose for your home, you should also have it serviced at least once a year. A professional technician can check your system to ensure it's operating properly, make repairs if needed and let you know when it's time to upgrade your system.

4 Extra Tips for Improving Water Heater Efficiency

Installing a new water heater is the most effective way to increase hot water efficiency. However, you can take some other steps to conserve energy with your current system if you aren't ready to upgrade yet. Consider improving your current or new water heater's efficiency with the following tips:

1. Insulate Your Pipes

Water can lose a significant amount of heat as it sits in water heater storage tanks and flows through pipes. Insulating your water heater's tank and pipes helps the water retain heat and reduce the energy your system uses. You can use insulation blankets to conserve your water's heat and save energy.

2. Limit Your Hot Water Use

Limiting your hot water use is one of the most effective ways to increase energy efficiency. You can take shorter showers, reduce the water temperature during your showers, turn the water off periodically while you use soap or shampoo or take baths instead of showers. You can also set your dishwasher to the energy-efficient setting and wash your clothes in cold water. These small changes can add up and decrease energy costs over time.

3. Reduce Your Thermostat Temperature

Reducing your water heater's thermostat temperature can reduce your system's energy consumption. Most water heaters are preset to temperatures often too hot for human skin. Lowering your system's thermostat can help you save money on your energy bills and protect your skin from scalding water.

4. Install a Volt Timer

Electric water heaters with tanks use energy around the clock to keep the water in your tank warm. A volt timer can turn your water heater off overnight while your family sleeps. Installing a volt timer conserves energy while your water heater is not needed, reducing your energy bill.

Can Small Changes Make a Difference?

Small changes add up, and every decision you make regarding your water heater's efficiency can make an impact. If your water heater is old and ready for an upgrade, installing a new and more energy-efficient heater may be your first step toward saving energy.

An energy-efficient water heater can improve your home's energy efficiency even if your current heater is working properly. Upgrading your system can save you more money over time. However, you can also take small steps toward energy savings if you're not quite ready to upgrade yet. Start by tracking your expenses and changing your thermostat to see how much your energy bill decreases. You can then take more steps and decide where to invest for the most savings.

Improve Heating Efficiency With Ingram's Water & Air

Taking steps to improve hot water heater efficiency can help you save money on your energy bills. Upgrading your water heater is the most effective way to increase efficiency because you can take advantage of the latest technology with an energy-efficient system. Ingram's Water & Air offers a wide variety of energy-efficient water heaters to help you reduce your energy costs. Browse our selection of water heaters to find the right match for your home.