Water Heaters

Like most home appliances, water heaters have become much more energy efficient in recent years. A decade ago 25 percent of our home energy dollars typically went to heating water; today the Department of Energy claims water heating accounts for about 18 percent of your utility bill.

Water heaters last 10 to 15 years on average. If yours is more than seven years old, replacing it with a more efficient model could save you money in the long run.

Types of water heaters

In California, these are the common types of water heaters:

  • Conventional storage water heaters, the most popular type, provide a storage tank of from 20 to 80 gallons of hot water, heated by several possible fuels - natural gas or propane, electricity, or even fuel oil.
  • Tankless or demand-type water heaters heat water directly as it is used without relying on a storage tank. They can be fueled by either electricity or gas.
  • Heat pump water heaters move heat from one place to another instead of generating heat directly for providing hot water, which makes them two to three times more energy efficient than conventional electric resistance water heaters. Using electricity for power, units can be either stand-alone water heating systems or combined into a system that heat water while heating and cooling the home.
  • Solar water heaters use the sun's heat to produce hot water.

Storage Tank Models

If you're replacing an existing water heater, check to see what type you have now. Most likely it is a storage tank model, but is it powered by natural gas, electric or even propane? Is there a natural gas outlet by the water heater, or only an electric outlet? Some homes are not equipped with natural gas, or don't have a gas outlet located by the water heater. Adding a gas line can be expensive, but if you have an electric water heater and a gas furnace or stove, you may be able save money in the long run if you extend the gas line to your water heater.

In most of California, natural gas is the most economical way to go. Heating water with electricity usually costs three times as much as heating it with gas. If you live in a rural area that has propane service instead of natural gas, propane is still usually less expensive than electricity.

Tankless or On-Demand Water Heaters

Whether they use electricity, natural gas or propane as a heat source, tankless water heaters may cut your home water-heating bill by 10 to 20 percent by eliminating standby losses - energy wasted by warmed water sitting around unused in a storage tank.

While units large enough to supply hot water for an entire house can be located centrally, tankless water heaters more commonly sit in a closet or under a sink where the hot water is used. They can be used to supplement a regular water heater in a distant location, or they can be used to provide all of a home's hot water needs. But tankless models aren't appropriate for all applications; sometimes they won't even save you that much energy or money. If you have a large family and do laundry and wash dishes at the same time as others shower, a tankless may not be able to meet your needs.

Electrically heated models provide less hot water than gas models.

The Advantages and Disadvantages of tankless water heaters

Here are some advantages to on-demand water heating:

  • Are compact in size and virtually eliminate standby losses.
  • Can be installed to provide warm water immediately where it's used, wasting less water. People don't need to let the water run as they wait for warm water to reach a remote faucet. A tankless water heater can provide unlimited hot water as long as it is operating within its capacity.
  • May last longer than tank-type heaters because they are less subject to corrosion. Expected life of tankless water heaters is 20 years, compared to 10 to 15 years for tank-type water heaters.
  • Range in price from $200 for a small under-sink unit up to $1000 for a gas-fired unit that delivers 5 gallons per minute. Typically, the more hot water the unit produces, the higher the cost. In most cases, electric tankless water heaters will cost more to operate than gas tankless water heaters.

Here are some drawbacks to on-demand water heating:

  • May not supply enough hot water for simultaneous uses such as showers and laundry.
  • May not heat water to a constant temperature at different flow rates unless the system has a feature called modulating temperature control. That means that water temperatures can fluctuate uncomfortably - particularly if the water pressure varies wildly in your own water system.
  • Draw more instantaneous power in electric-powered models than tank-type water heaters. If electric rates include a demand charge, operation may be expensive.
  • Require a relatively high draw of electricity in electric-powered units because water must be heated quickly to the desired temperature. Make sure your wiring is up to the demand.
  • Require a direct vent or conventional flue for gas-fueled models. If a gas-powered unit has a pilot light, it can waste a lot of energy.

Heat Pump Hot Water Systems

A relatively new technology, heat pump water heaters use electricity to move heat from one place to another. Because they don't generate heat directly, they can be two to three times more energy efficient than conventional electric resistance water heaters. To move the heat, heat pumps work like a refrigerator in reverse.

The Department of Energy says this about selecting a heat pump water heater: "Heat pump water heater systems typically have higher initial costs than conventional storage water heaters. However, they have lower operating costs, which can offset their higher purchase and installation prices."

Solar Hot Water Systems

The sun's heat has been used for decades to heat water for homes and businesses. At the turn of the 20th century, solar heated water systems were common in Southern California. Since 2010 all new homes built in Hawaii are required to have solar water heaters and countries such as Israel, Spain and Cyprus have passed similar laws. China leads the world in solar water heater installations, however, with nearly two-thirds of the world's total at the end of 2010. The Environmental and Energy Study Institute (EESI) estimates there are 1.5 million solar water heaters already in use in U.S. homes and businesses. (http://environment.about.com/od/renewableenergy/a/solar_water_hea.htm)

Solar water heaters can be either active or passive. Active systems, the most common design, rely on pumps to move water between the collector and the storage tank. Simpler passive systems use gravity and the tendency for hot fluids to rise to circulate the water.

Many swimming pools also employ simple solar heaters. The pool's filter pumps water through a solar collector, usually made of black plastic or rubber mats or tubes, before returning it to the pool where the hot water is stored.

Smart Buying

Once you decide what type of water heater you want and the fuel you will use, you need to determine the size you need. The Department of Energy website provides detailed instructions for properly sizing tankless or solar water heaters.

For the more commonly used storage water heater - including a heat pump water heater with a tank - check the heater's "first hour rating." This is the number of gallons of hot water the tank can supply in an hour, starting with a full, hot tank. This should match how much hot water your family uses at the busiest hour of the day.

Install too small a water heater and you'll continually run short of hot water. Oversize it and you'll waste valuable energy dollars.

This chart can help you roughly estimate how much hot water your family uses during its busiest hour - the "first hour rating."

Your house has:
How many bathrooms? 1 to 1.5 2 to 2.5 3 to 3.5
How many bedrooms? 1 - 2 - 3 2 - 3 - 4 - 5 3 - 4 - 5
You need a First Hour Rating of: 43 - 60 - 60 60 - 70 - 72 - 90 72 - 82 - 90

The Department of Energy site also offers formulas to more precisely estimate your first hour rating.

Use the EnergyGuide

The Federal Trade Commission requires EnergyGuide labels on all new conventional storage water heaters (but not on heat pump water heaters.) It compares the average yearly operating costs of different water heaters, using the same criteria for all models tested. It lets you see which one would probably cost you less to run.

EnergyGuide labels feature the first hour rating as "Capacity" on the upper left corner of the yellow label. On this sample label, the first hour rating is 68 - the number of gallons of hot water it should be able to supply to your family in an hour.

Note the first hour rating, and don't just rely on the physical size of the storage tank. Gas water heaters work quicker than electric ones, so they produce more hot water in an hour. A gas water heater that holds 40-gallons may turn out as much hot water in an hour as a 65-gallon electric one!

The big number - $272 - in the center of the EnergyGuide is the estimated cost of energy needed to operate this water heater for one year. On the bar immediately below this yearly cost, the label even displays the range of yearly costs of comparable-sized water heaters, from the least expensive to most expensive. That's why an EnergyGuide label is such a valuable tool - it makes comparison shopping easy

If you decide to increase the size of your water heater, make sure you have room in your home for a bigger model. Water heaters are sometimes crammed into tight spaces - check the manufacturer's specifications on any model you buy to make sure it will fit.

Understanding The Energy Factor Label

Another label on new water heaters lists the "Energy Factor." The best indicator of the water heater's efficiency, it provides a number with a decimal point, usually listed on a separate tag beside the EnergyGuide.

The higher the "Energy Factor" number, the more efficient the water heater. In California, electric resistance water heaters have a minimum Energy Factor of 0.97; gas-fired storage, 0.67; oil-fired storage, 0.59; gas-fired instantaneous, 0.62; and electric instantaneous, 0.93.

Those Energy Factor numbers show that electric models are more efficient, primarily because gas water heaters lose some of their energy up the exhaust vent. However, new gas water heaters boast more efficient combustion than older ones, meaning that less heat escapes up the flue, and less gas is needed to heat the water. Gas efficiency has improved.

Since electricity usually costs three times more than gas, in most of California it's still cheaper to use natural gas, if you have a choice.

"Energy Factors" vary because different water heaters are made to be more energy efficient. Today's models are better insulated than the ones manufactured years ago. As a result, most cost about 18 percent less to run than older models. The savings are due to reduced heat loss, thanks to the added insulation.

Whichever type of water heater you buy - either gas or electric - look for a unit with a higher energy factor. It may cost more initially, but the savings and your energy bills may more than make up for the higher sticker price. The Department of Energy offers formulas you can use to more closely estimate your operating costs and savings.

Smart Use

Conserving your use of hot water and cutting water waste will reduce your energy bills. Consider these tips.

  • Check your faucets for leaks. They waste both water and energy!
  • Conserve hot water by installing water-saving showerheads. A new showerhead can save as much as $10 a year in water and energy.
  • Insulate expose hot water pipes to reduce heat loss.
  • Install an R-12 insulation blanket around your water heater, unless the manufacturer does not recommend it. Modern water heaters are generally very well insulated, and adding additional insulation will only save a small amount of energy.
  • Reduce your water heater's temperature to 120 degrees Fahrenheit. That will produce plenty of hot water and still save energy. For homes with a dishwasher, a setting of 140 degrees is required to clean properly, but most of the new dishwashers have a built-in water temperature booster.
  • Clean as much as possible with cold water to save the energy used to heat water.
  • Use cold water to operate your garbage disposal. Cold water use saves energy and is the recommendation of most disposal manufacturers.
  • Use a sink stopper or dishpan when washing dishes by hand, so water - hot or cold - doesn't rush down the drain. Remember, too, that running hot water needlessly wastes both water and energy.