How to Choose an Efficient Water Heater
1. Choose a model from the TopTen list
While savings can vary by fuel source and product configuration, TopTen water heaters save significant amounts of energy and money over their lifetimes, compared to minimum efficiency models. In their 13 year lifetimes, heat pump water heaters can save over $4,000, and condensing storage and tankless water heaters can save over $1,000.
2. Select the right type and right size water heater
All types of water heaters have their own strengths and weaknesses. When choosing a new water heater, you should select a model with strengths that match your needs. If considering a tankless unit, ensure that the unit features adequate minimum and maximum draw capacities. If, for example, you need to use multiple showers and run load of laundry simultaneously, you may find that a tankless unit struggles to keep up with demand in winter, particularly in the North (when entering water temperature is very low). Likewise, when choosing a tank type water heater, look for a unit with a storage volume that will satisfy, but not greatly exceed your hot water demands. An oversized unit will result in unnecessary standby losses, and an expensive, oversized water heater of any configuration will not result in the savings you seek.
For more guidance on selecting the right type of water heater for you, visit the Consumer Resources page at the American Council for an Energy Efficiency Economy’s Web site:
http://aceee.org/consumer/water-heating
3. A note about how we rate water heaters
Energy and economic savings estimates are based on federal performance rating methods, and these methods are much simpler than actual use patterns. In the real world, usage patterns vary greatly from day to day, month to month, and year to year, which means your actual use will likely differ from estimates derived from the federal test method. In particular, residential ratings assume an unrealistic hot water use pattern, exaggerated demand, and have test conditions, such as the entering and exiting water temperature, that are rather uncharacteristic of real-world use. As a result, comparing ratings - or estimated annual use - between different technologies is not likely to give reliable comparisons. However, the federal test method does allow for relative comparisons between like technologies.
4. Hot water system efficiency
A properly plumbed and insulated hot water distribution system, combined with efficient fixtures, will reduce water waste and utility bills. In fact, you may achieve greater energy savings by improving their distribution system than by upgrading to a higher efficiency water heater. Some measures can be installed in minutes and cost very little, while others may only make economic sense during major home renovations or new construction. If your shower uses over 2 gallons per minute or your faucet over 1 gallon per minute, consider upgrading to higher efficiency fixtures. Improved fixtures offer quick payback periods and can increase the first hour rating of your water heater.
Long piping runs, oversized pipes, and poor insulation increase water and energy waste because hot water loses heat on its way to the fixture and can cool quickly within pipes between draws. In the average size U.S. home, losses in the distribution system can exceed 35% of total water heating energy use, including losses from water cooling in the pipes between uses.[i] In large homes, or homes with insufficient pipe insulation, losses can be even higher.
Minimizing pipe length between the water heater and fixtures, and installing proper pipe insulation are two ways to reduce energy loss in the system. Pipe insulation helps to keep water warm between draws, reducing the time users wait at the fixture. It can also decrease losses as water travels through the pipe between the water heater and fixture. One rule of thumb is to select pipe insulation with the same wall thickness as the diameter of pipe you are insulating. If you’re planning some renovations at home, consider contacting a performance contractor who can advise if it makes sense to upgrade your plumbing system.
For more guidance on finding and selecting a professional contractor, visit the Consumer Resources page at the American Council for an Energy Efficiency Economy’s Web site: http://aceee.org/consumer/building-envelope
5. Demand Recirculation pumps
Users who experience long wait times for hot water in their bathrooms may achieve cost effective savings, while simultaneously reducing time spent waiting with the hand under the tap, by installing a demand-based intermittent recirculation pump. Recirculation pumps feature a small pump that draws hot water from the water heater to a desired point of use and returns the room temperature water to the water heater for reheating. Recirculation systems are typically installed at the bathroom located furthest from the water heater and can be triggered by either a button or a timer set to peak times of use such as the morning and evening. These systems can save large amounts of water and increase user comfort by supplying hot water faster. Continuous and timer-controlled recirculation pumps are not recommended: the value of the wasted energy can be many times that of the water saved.
6. Fuel switching
Unless your home is already plumbed with a gas line, it is rarely cost effective to switch from electric to natural gas water heating. Likewise, electricity rates are seldom low enough to justify switching to electric water heating if you are currently using gas. However, the economics of fuel switching depend on your local current and expected future utility rates. Check with your local utility to see if they offer incentives that might make switching fuels economically beneficial.
7. Solar Assisted Water Heaters
In sunny climates, solar water heating systems can reduce electric heating bills by 50% or more. However, performance can drop dramatically in winter months or cloudy climates. Limited testing has shown that savings can range from 28-82%, depending on the product, climate, and seasonal variances (Consumer Reports, October 2010). With startup costs in the range of $3000-7000, payback periods can stretch to 20 years or more. However, some utilities and local governments offer financial incentives to bring down costs, and systems installed in the Sun Belt may find the economics much more favorable.
ENERGY STAR certifies solar water heaters with solar fraction ratings of 0.5 or higher. The solar fraction is the percentage of the total water heating load provided by the solar water heater during the test procedure established by the Solar Energy Industries Association. A solar fraction of 0.5 or greater corresponds to meeting 50% or more of the total water heating demand. As previously mentioned, there is a high degree of variability in a system’s hot water generation in a given installation.
For more information about solar water heaters, visit the following Web sites:
- EPA ENERGY STAR
http://www.energystar.gov/index.cfm?fuseaction=find_a_product.showProductGroup&pgw_code=WSE
- Florida Solar Energy Center (FSEC)
http://www.fsec.ucf.edu/en/consumer/solar_hot_water/index.htm
- California Center for Sustainable Energy
- Solar Energy Industries Association
- 8. Heat Pumps in Cold Climates
Like solar water heaters, heat pumps can experience reduced performance when installed in colder climates. Cool air expelled by the heat pump can increase space heating loads if installed within the conditioned space, and installations in unconditioned spaces may cause the backup resistance heating element(s) to work excessively, reducing efficiency. To help ensure reliable performance in cold climates (parts of the country with over 4,000 heating degree days and annual average temperatures below 60 degrees), the Northwest Energy Efficiency Alliance (NEEA) is currently developing a manufacturer and consumer guidance document called the Northern Climate Heat Pump Water Heater Specification. The Specification includes a number of criteria, including compliance with ENERGY STAR criteria, freeze protection, appropriate ducting capability, effective condensate removal, noise limitations, and a number of safety and maintenance notifications. The current draft of the Specification is available on NEEA’s Web site at the following link:
http://neea.org/ourwork/documents/HPWHNorthernTierSpecFinal.pdf
[i] Sachs, H. et al. ACEEE Emerging Energy-Savings Technologies and Practices for the Buildings Sector as of 2011 (forthcoming)

