What Is an Energy Guide Label and How to Use It?

When shopping for a water heater in the U.S. or Canada, you’ll notice every unit—whether tank-type or tankless—comes with an Energy Guide label. This label serves as a powerful tool, offering key details like energy consumption, so you can easily compare the efficiency of similar models. By understanding this information, homeowners can make informed decisions, choosing water heaters that not only reduce utility bills but also minimize environmental impact.

In the U.S., the label is a distinctive black-and-yellow EnergyGuide, while in Canada, it’s a black-and-white EnerGuide. Although both countries use similar methods to rate energy efficiency, there are slight differences to note. Additionally, some appliances may feature these labels alongside the Energy Star logo, signaling even higher efficiency standards.

Ultimately, the Energy Guide label is an invaluable resource for homeowners. It provides clarity and confidence, ensuring you select the right water heater for your needs. Pro tip: Always check the label for type and size information to ensure you’re comparing similar models—this small step can make a big difference in your decision-making process.

Key Information U.S. Homeowners Can Find on the EnergyGuide Label

If you’re planning to buy or rent a water heater in the U.S., the EnergyGuide label is your go-to resource for essential details. Here’s what you’ll find on the label:

• Water heater type (tank or tankless)
• Model type and manufacturer
• Fuel type (natural gas, propane gas, or electricity)
• Capacity or GPM rating
• First-hour rating (FHR)
• Estimated yearly operating costs
• Range of energy consumption
• Estimated annual energy consumption
• Energy Star compliance

Storage Capacity or GPM Rating:
Tank-type water heaters store hot water, and their capacity is measured in gallons. On the other hand, tankless models use a gallons-per-minute (GPM) rating, which indicates the maximum water flow rate they can handle.

First Hour Rating (FHR) or Delivery (FHD):
The FHR metric tells you how much hot water the unit can deliver during the first hour of operation. It’s a crucial factor for understanding whether the heater can meet your household’s hot water demands.

Estimated Yearly Operating Costs:
This section shows the projected annual cost of running the water heater. It also includes a cost range for similar models, making it easier to compare operating expenses across different brands and models with comparable features.

Estimated Annual Energy Consumption:
This figure reflects the average amount of energy the water heater will use in a year. Keep in mind that this estimate depends on your local utility rates and usage patterns.

Energy Star Logo:
If the EnergyGuide label includes the Energy Star logo, it means the unit meets high-efficiency standards. Choosing an Energy Star-certified water heater can help you save energy, cut costs, and reduce your environmental footprint.

Important Note:
In the U.S., federal law mandates that manufacturers display the EnergyGuide label on all new water heaters and heat pumps. To make the most of this resource, focus on these three critical features (if applicable):

To get the full benefits, pay attention to these three of the most important features (if applicable):

• First-hour rate – FHR
• Range of the estimated energy consumption
• Estimated yearly operating costs

You can find more info on the official site here.

What Can Homeowners in Canada Find on the “EnerGuide” Label?

For Canadian buyers, the EnerGuide label provides essential details to help you choose the right water heater. Here’s what you’ll typically find on the label (if applicable):

• Model’s Capacity (very small, low, medium, or high) – for gas models only
• Uniform Energy Factor (UEF) – for gas models
• Standby Heat Loss – for electric models
• UEF Range (gas) or Standby Heat Loss Range (electric)
• Efficiency Indicator – Shows how your model compares to the least and most efficient options

Standby Heat Loss (Electric Models):
This measures the energy efficiency of electric water heaters, expressed in watts. It represents the heat lost when the unit is not actively heating water or when no hot water is being used. A lower standby heat loss number indicates higher efficiency. Models with better insulation (high R-value) around the tank typically have lower heat loss, making them more energy-efficient.

Uniform Energy Factor (UEF) (Gas Models):
For gas water heaters, efficiency is measured by the Uniform Energy Factor (UEF). A higher UEF number means greater efficiency. Water heaters with a UEF above 0.9 are considered ultra-efficient and are often referred to as condensing models. In contrast, less efficient models typically have a UEF around 0.6.

A Shift in Standards:
Starting in mid-June 2017, water heater manufacturers in Canada were required to adopt new government testing procedures and standards. This change replaced the old Energy Factor (EF) ratings with the Uniform Energy Factor (UEF). The UEF provides a more consistent and accurate way to measure energy efficiency, benefiting both consumers and manufacturers.

Important Note:
Unlike in the U.S., the use of the EnerGuide label is voluntary for water heater manufacturers in Canada. For the most up-to-date information, visit the official EnerGuide website.

How to Calculate the Energy Costs of Gas and Electric Water Heaters

Understanding the energy costs of your water heater can help you make informed decisions and save money. Here’s how to calculate the costs for both gas and electric models:

For gas water heaters, use the following formula:

Volume of used gas (in cubic feet) × Gas fuel costs = Energy costs

Example: 

If you use 50 cubic feet of gas and each cubic foot costs $0.07, your cost would be: 50 x 0.07 = $3.5

For electric water heaters, use this formula:

Kilowatt-hours (kWh) × Electricity costs = Energy costs

Example: 

If you use 50 kilowatt-hours of electricity and each kWh costs $0.05, your energy cost would be: 50 x 0.05 = $2.5

Conclusion

The energy guide label found on most home appliances, including water heaters, is a helpful guide that can help you make an energy-wise choice.

When buying a new water heater, you can use this valuable tool, compare the energy efficiency and cost savings, and get the most cost-effective model.

Keep in mind that actual savings depend on various factors, including location, climate, weather, energy rates, usage, equipment, and others.