Almost every type of water heater now offers improved efficiency—even that dinosaur, the storage-tank heater.

By Mary Ellen Polson

Panels for solar water heaters usually have a smaller footprint than those for overall heating.

Panels for solar water heaters usually have a smaller footprint than those for overall heating.


Conventional water heaters consume as much as 20 percent of your home’s energy budget. New federal energy mandates now require greater efficiency for nearly all residential heaters, regardless of fuel. While most tankless systems already exceed the new standards, others are catching up, especially condensing and hybrid water heaters.

The Accelera from Stiebel-Eltron heats water by drawing on air in a basement or garage.

The size of the house, the number of people in the household, the type of power available (gas or electric, for example), and climate considerations all have a bearing on heating options for hot water. That said, the most important factor in choosing a new heater is the first-hour rating (FHR) for storage-tank water heaters and the gallons-per-minute rating (GPM) for tankless water heaters.

In essence, these ratings tell you how quickly you’ll run out of hot water when multiple users are draining the taps.

A professional can help you estimate what FHR or GPM your household needs. For a storage unit, you’ll also need to know the recovery rate—how fast the heater can replenish water as it’s drawn from the tank. In most cases, this will depend on the burner size (in BTUs) and heat-transfer efficiency.

Another important consideration is the energy factor (EF), a measure of the amount of hot water produced per unit of fuel consumed over a typical day. While a high EF is desirable, it doesn’t necessarily mean that the option with the highest EF will be most cost efficient. That will depend on your climate and how and when you typically use hot water. 

The Westinghouse stainless steel electric hot water heater has an energy factor (EF) of .95.

STORAGE TANK The most familiar household water heater is a 50-gallon insulated tank that heats and stores water. (Larger and smaller size tanks are also available.) Newer models offer better tank insulation and higher ER ratings.

Pros They cost only a few hundred dollars each, and can be installed by a plumber in just a couple of hours. They’re most efficient when powered by natural or LP gas.

Cons Keeping water in the tank hot on standby means higher overall energy consumption and costs. It’s still possible to deplete all the hot water at one time, too, if too many people are drawing it down at the same time.

HEAT PUMP/HYBRID Heat pump and hybrid water heaters pull heat out of warm air in an uncooled space like a garage or attic to heat hot water.

Pros Ideal in temperate to warm climates, hybrids use about 60 percent less energy than standard electric water heaters. They’re slightly more expensive than standard tank heaters.

Cons Hybrids require up to 1,000 cubic feet of space to work properly.

Heatworks’ Model 1 is an electric, digital water heater that can be used to heat a small house.

Click here to read more.

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