You probably didn’t choose the water heater in your home. Rather, it was chosen by developers or builders who had no long-term interest in paying more for a high-efficiency, long-life unit. Initial cost was their concern. So if you ever have to replace a failed water heater, know that you’ll recover the extra cost for a more-efficient unit in three or four years – and then pocket all the savings on energy thereafter. And enjoy it for more than 20 years.

Storage tank water heaters (as compared to tankless models) are generally available in 40 to 80 gallon sizes. The smaller models usually are more efficient because they have less surface area through which heat can radiate out. Efficiency is expressed in terms of an Energy Factor (EF), usually shown in the product literature or on labels. The higher the EF, the more hot water is produced per unit of fuel used through a typical day.

The EF is affected by recovery efficiency (how efficiently heat is transferred to the water), by standby losses (the

percentage of heat loss per hour from stored water compared to the heat content of the water) and by cycling losses (the loss of heat as the water circulates through the tank).

Since January 2004, federal standards for electric tank heaters require an EF of 0.90 to 0.93 depending on the size of the tank. For gas-fueled tank water heaters, the standard requires an EF of 0.56 to 0.61 though heaters are now available with EFs up to 0.68.

Tankless (or “demand”) water heaters can be 8 to 50 % more efficient than current tank models depending on size, site location and water usage.

In addition to the EF, you’ll also want to consider the size, fuel type (especially cost), overall cost and first-hour rating (for tank models, the amount of hot water in gallons the heater can supply per hour starting with a tank full of hot water).