Water Heating

Water heating is the second-largest energy expense in your home. It typically accounts for about 13% of your energy usage.

There are four primary ways to cut your water heating bills:

  • Use less hot water
  • Turn down the thermostat on your water heater
  • Insulate your water heater and pipes
  • Buy a new, more efficient model

Reducing Water Heating Costs

You can take steps to use less hot water and improve the efficiency of your existing water heating system.

  • If your hot water tank is warm to the touch, consider insulating it to save 7%–16% annually in water heating costs. Follow manufacturer recommendations.
  • Consider insulating your hot water pipes. Doing so can reduce heat loss, allow you lower the temperature setting, and save an additional 3%–4% per year on water heating.
  • Set your water heater temperature to 120°F, a temperature considered safe for most of the population.
  • Install heat traps on the hot and cold pipes at the water heater to prevent heat loss. Most new water heaters have built-in heat traps.
  • Drain a quart of water from your water tank every 3 months to remove sediment that impedes heat transfer and lowers the efficiency of your heater. Follow the manufacturer’s directions.
  • Consider installing a drain-water waste heat recovery system. Drain-water, or greywater, heat recovery systems capture the energy from waste hot water— such as showers and dishwashers—to preheat cold water entering the water heater or going to other water fixtures. Energy savings vary depending on individual household usage.
  • Consider installing a residential circulation pump to save water.
  • Install aerating, low-flow faucets and showerheads.
  • If you find yourself waiting for the water in your shower to get hot, consider installing a showerhead that has a temperature-sensitive switch that turns off the water when hot. When you step into the shower, you flick a switch on the showerhead that restarts the hot water flow.
  • Repair leaky faucets promptly. A leaky faucet wastes gallons of water in a short period of time.

If you are in the market for a new dishwasher or clothes washer, consider buying an ENERGY STAR model to reduce hot water use. See the Appliances section for more information or visit energystar.gov.

Buying Water Heaters

While a new energy efficient water heater may cost more initially than repairing an old model or buying a new, less efficient model, the energy savings will continue during the lifetime of the appliance.

Most water heaters last 10–15 years, but start researching now if yours is more than seven years old.

Look for the ENERGY STAR® and EnergyGuide labels. You can find the ENERGY STAR label on the following types of water heaters: heat pump, high-efficiency gas storage, gas tankless, and solar. (Electric storage tank and electric tankless water heaters are not ENERGY STAR eligible because they are already highly efficient and have little room for improvement.)

Conventional Water Heaters

Conventional storage water heaters remain the most popular type of water heating system for the home. Fuel sources include natural gas, propane, fuel oil, and electricity.

Tankless Water Heaters

On-demand or tankless water heaters (gas) heat water directly without using a storage tank. Researchers have found energy savings can be up to 30% compared with a standard natural gas storage tank water heater. However, if you tend to use hot water in multiple locations in your home at the same time, you may find you need two or more tankless water heaters to keep up with demand. These systems require unique installation specifications; consult with a certified technician before purchasing.

Heat Pump Water Heaters

Heat pump water heaters can cut water heating costs by an average of 50% over standard electric water heaters in areas where temperatures remain in the 40° – 90°F range year-round. If located in your basement, they can also provide dehumidification in the summer. However, this technology can pose some installation challenges, so consult with an installer before purchasing. For more information see EnergySaver.gov.

Solar Water Heaters

Solar water heaters are a good option if you heat water with electricity, have high electric rates, and have an unshaded, south-facing location (such as a roof). In addition to the ENERGY STAR label, look for systems certified by the Solar Rating and Certification Corporation or the Florida Solar Energy Center.

Solar water heaters are eligible for a 30% federal tax credit through 2019. The tax credit decreases to 26% in 2020, 22% in 2021, and expires December 31, 2021.