Water Heaters (Part 6 Home Energy)

Apart from heating and A/C, a water heater is typically the next biggest draw appliance in a modern home. When thinking about the efficiency of a water heater, the first thing to look at is the temperature. 120 degrees usually works well. Make sure your water is not hotter than that. You can check the water heater, as some do have settings, but you may have to put a thermometer under hot water to find out. Constantly keeping a tank at too high a temperature is extremely expensive.

The second thing to be concerned about are the water pipes. Are they insulated? If not, insulate starting from the tank, 6’ on the cold side, and as much of the warm side as you can reach. This will help you reduce standby loss, and it is super easy and cheap also. In some situations water heater tank wrap can also be installed, but be careful because in some water heaters, a wrap will void the warranty. Make sure to check the manual to find out if a wrap is appropriate. Most new water heaters are already insulated.

Should you consider replacement? If you have an electric water heater, it is strongly recommended to consider the new air source heat pump water heaters. They use less than half the electricity of a traditional electric water heater. Solar hot water is another nice option, especially those that are concerned about steady supplies of traditional energy in the future. On-demand tankless systems work well if you use natural gas for your water heating, especially if you are moving from an inefficient tank model (non-condensing unit, atmospherically vented). However, with natural gas so cheap, the ROI is not great, and if you have a heavy hot-water need, you may need more than one.


Air Source Heat Pump Water Heater


Pipe Insulation


ROI pipe insulation- AVG 27%

(Big ROI because improvement is so cheap)

ROI new air source heat pump water heater- AVG 23%

ROI Solar hot water- 7%-15%

(Varies based on fuel, can be higher with rebates)

ROI tankless Gas- 4%-7%

(Varies based on type replacing, fuel prices)

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