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Rise | We've Done the Research

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electric hot water tank
Electric hot water storage tank. Photo by Wayne Groszko.

How Efficient Is a Water Heater?

Storage tank water heaters are easily the most common water heaters powered by electricity, gas, or oil. According to an ENERGY STAR market report, in 2009, storage tank waters accounted for 97 percent of the market. Though this number has most likely been dropping as homeowners begin to search for ways to increase their homes' energy efficiency, storage-style heaters continue to be the most common option for homes.

Older or less expensive models are less insulated and can consume a lot of energy. Even when hot water is not being used, the water heater must keep the water inside the tank hot. If you have one of these models, consider getting an insulation blanket for it. Also, investing in a water heater timer is another way to reduce energy consumption, especially if you spend extended periods away from your home when hot water is not needed.

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Another benefit of point-of-use tankless water heaters is that they allow you to only direct hot water to the areas where hot water is necessary, such as showers or sinks. Because most laundry detergents can wash clothes perfectly well in cold water, this option allows homeowners to avoid running a hot water line to their laundry room.

Homeowners can expect to save around $165 per year by updating to either a gas or electric tankless water heater, and it should last for approximately 20 years. For more information on these super-efficient water heating options, check out our  Rise tankless water heating guide, and for more guidance on how to calculate your payback period, check out our Tankless Water Heater Calculation Guide.

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For even more energy savings, consider combining a heat pump water heater with an air-to-air heat pump. This type of system can efficiently heat and cool your home while simultaneously providing hot water for your showers, sinks, and other water connections. Because residential rooftop solar panels can power heat pumps, homeowners can access an entirely net-zero heating, cooling, and hot water source.

Though heat pump water heaters might cost a bit more upfront, the ENERGY STAR program estimates that switching from a traditional electric water heater to a heat pump water heater could save up to $330 per year for a four-person household. This amounts to a two-year payback period and total savings of almost $3,500 over the unit's lifetime. Check out this complete Rise guide for more information on heat pump water heaters.

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Water Heater Cost Comparison

Here is a comparison of the operating cost of different kinds of water heaters. This example is for a household that consumes approximately 200 L/day (similar to a 3-person home). Of course, the actual costs and savings will vary depending on how much hot water your household consumes.

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Rise water heater cost comparison

Notes:

  • The Solar Energy Factor (SEF) is estimated to be two based on typical systems' performance in Nova Scotia, Canada. A solar water heater's performance depends on many other factors, such as the panels' location (i.e., Nova Scotia vs. California), the panels' orientation and shading, and consumption.
  • Tankless water heater installed cost sourced from Fixr.
  • Heat pump water heater payback range sourced from ENERGY STAR.
  • Individual solar system components may need to be replaced over time, like the pump or the backup heater.
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Selecting a water heater requires choosing a balance between affordability, space, and energy efficiency. Going from a storage tank or tankless model to a solar water heater can save a lot of energy. Still, the additional cost can be hard to justify. However, heat pump water heaters are becoming an affordable option that can save as much or more energy than a solar water heater.

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Tobias Roberts

Rise Writer

Expert. Practical. Sustainable.

Article by

Tobias Roberts

Tobias runs an agroecology farm and a natural building collective in the mountains of El Salvador. He specializes in earthen construction methods and uses permaculture design methods to integrate structures into the sustainability of the landscape.

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