When asked, “What are my options for energy efficient water heating?” many people answer only in terms of the most efficient type of water heaters. In truth, however, there are many more efficient and effective options. There are also many creative ways to reduce the cost of heating water in your home. If you are willing to think creatively, you might discover options that will reduce your cost for hot water even more.
According to the San Diego Gas and Electric Company, “next to heating and cooling, water heating is the largest energy user in the home. Gas water heater costs account for about 16% of the average bill, while electric water heater costs are about 28% of the average bill.”
The most common response to the desire to heat water more efficiently is to buy a new and more efficient gas or electric water heater. By upgrading now to an EnergyStar certified water heater you can claim a Federal Income Tax credit of 30% of the cost of the new water heater, up to a total for all energy efficient upgrades of $1,500 per year.
There are five main options for water heaters, each using a different technology:
  1. High-Efficiency Gas Storage – This type of water heater is essentially the same as most gas powered water heaters that heat and store water in a tank. The high-efficiency models have better insulation and more efficient burners, as well as better heat traps. They are about 7.5% more efficient and will probably reduce the water heating cost for the average family (2.6 people) by about $30 per year. There are many models that meet the requirement of an energy factor greater than or equal to 0.62.
  1. Gas Condensing – This new technology promises to reduce your water heating cost by about 30% and perform better. For an average family (2.6 people), this system should save about $110 a year. These water heaters achieve better efficiency because instead of a straight flue running from the burner (at the bottom) to the top they use a larger flue that allows the burner to heat a larger surface area. This creates a greater distance for heat and combustion to move before exiting through the vent, causing more heat to be transferred to the water and less to escape. These units must achieve an energy factor of greater than or equal to 0.8.
  1. Whole-Home Gas Tankless – These systems work like other gas water heating systems except that they do not store heated water in a tank. Instead, water is heated only as it is needed and only as much water as is needed at the time is actually heated. Efficiencies are achieved by not maintaining a tank full of water at a pre-set temperature. These units must achieve an energy factor greater than or equal to 0.82 to qualify for the EnergyStar rating and for the tax credit. They can be expected to save the average family (2.6 people) about $115 per year.
  1. Solar – these systems generally consist of a unit that collects the water and heats it using the heat of the sun, either directly or indirectly. There are three types of collector units and four circulation system options. Your choices will be determined by your location and climate. These decisions are best made with the assistance of a solar water heating professional. Solar water heating systems installed for the needs of the home qualify for a Federal tax credit of 30% of the cost of purchase and installation by a certified installer, with no cap on the amount that can be claimed. A solar heating system should save the average family about $220 per year.
  1. Heat Pump – EnergyStar claims that new heat pump water heaters will reduce water heating costs by half. The efficiency is achieved by drawing heat from the air around the unit and transferring it to the water inside the tank. These units must achieve an energy factor greater than or equal to 2.0. All EnergyStar certified heat pump water heaters qualify for the tax credit of 30% of cost up to a total credit of $1,500 per year. These units will save the average family $290 per year.
Finally, for those interested in thinking creatively, there are some additional options to consider:
  • Instead of a whole-house tankless system, install smaller instant/tankless water heaters in the areas where water is needed, and in appropriate sizes for the needs of that area. For example, units might be installed in each bathroom, the kitchen, and the laundry room. The advantage of this approach is that no heat is lost as hot water moves through the pipes to various parts of the house.
  • If your bathrooms have whirlpool tubs, soaker tubs, or other spa-type tubs, choosing tubs equipped with or installing “in-line” water heaters will save both water and power. These systems work by re-heating the water that is in the tub. You then use far less power to re-heat warm water than to empty the tub and refill it with hot water, or to continue to add more hot water to maintain the desired temperature.

These options for energy efficient water heating should provide an approach that is best suited to your family’s lifestyle and needs.