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Energy 101 Heating & Cooling Water Heaters

Water Heaters

Water heaters are another sizable investment that can have a large impact on your utility bills. Conventional models on the market today are barely more efficient than models sold over 20 years ago.  As with furnaces, choosing a water heater involves the selection of a fuel source, which depends on cost and availability in your area. Each type of water heater also uses its particular fuel source with varying efficiency, meaning that a lower-efficiency heater utilizing a less expensive fuel may cost more than a high-efficiency heater that runs on a more expensive fuel.

Regardless of your type of water heater, if your tank is warm to the touch, you should insulate it with a water heater blanket. Insulating the tank is simple and inexpensive; you can make your own blanket or buy a pre-cut jacket.

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Product Types


How It Works

Conventional storage water heaters are the most popular type, offering a ready reservoir of 20-80 gallons of hot water (depending on the size of the tank). The basic operation is characterized by the release of hot water from the tank when a hot water tap is turned on in the house. As this water is released, the tank refills with cold water. A constantly-running natural gas, propane, fuel oil, or electric source reheats the water up to the set temperature.

Water is constantly heated in this type of tank, and therefore requires energy even when hot water is not being used in the house. The energy loss that occurs merely from maintaining the tank’s set temperature is called the “standby heat loss”. Thermal resistance to heat loss is measured by R-values; R-12 to R-25 is ideal.

Gas and oil water heaters also lose energy through venting; fan-assisted gas water heaters and atmospheric sealed-combustion water heaters both minimize these losses, as does the installation of heat traps.

Click here to learn more about the different types of water heaters available to homeowners

Low Cost Savings Tips:

  • The less hot water you use, the more you save. Take shorter showers, wash clothing in warm or cold water instead of hot, and scrape dishes instead of rinsing them before loading the dishwasher.
  • Turn down the thermostat on your current water heater. The factory settings are usually much higher than the 120°F most households require.
  • Insulate your heater with a water-heater blanket.
  • Insulate your hot water pipes
  • Have heat traps installed with your new storage water heater to prevent convective heat losses through the inlet and outlet pipes.
  • Install a timer on your electric water heater to turn it off at night and/or during your utility’s peak demand times.
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  • The average household spends $400–$600 per year on hot water heating. This substantial cost is second only to heating and cooling.
  • For each 10ºF reduction in water temperature, you can save between 3%–5% in energy costs.
  • A water heater lasts 10-15 years, though 27 million U.S. households have units that are over 20 years old.
  • It’s much more difficult to make an informed, cost-effective decision regarding replacing your water heater when your heater has already failed and is threatening your home. A failed water heater can cause substantial home damage while also forcing a homeowner to make a hasty decision on a long-term, important investment.
  • Some utilities will offer rebates for installing a water heater blanket.