Can Energy-Efficient Water Heaters Help You Save?

Polaris, one of the most energy-efficient water heaters (photo: amazon)

In today’s world, energy efficiency is a crucial consideration for both environmental and financial reasons. As one of the largest energy consumers in many homes, water heaters are an area where efficiency improvements can make a big impact.

In this context, let’s explore what energy-efficient water heaters are, how they work, Energy Star products and and why they’re worth considering.

Polaris energy efficient water heater
Polaris energy efficient water heater (photo:

Energy-Efficient Water Heaters: Things to Consider

What Are the Energy-Efficient Water Heaters?

Energy-efficient water heaters are high-efficiency systems that are designed to minimize heat loss and utilize over 80% of their energy for heating. They consume less energy to heat water compared to traditional models.

These innovative products utilize cutting-edge technology and are engineered to save energy, conserve resources, reduce costs, and decrease greenhouse gas emissions while providing better environmental protection compared to less-efficient models.

If you’re currently using natural gas for water heating, you’ll be pleased to know that many manufacturers offer models that comply with Energy Star requirements. Simply look for units with an energy factor of 0.9 and above – these are known as Energy Star water heaters. On the other hand, if you’re using electricity for heating, your only option is to purchase an electric heat pump, such as the Voltex from AO Smith.

If you’re considering buying a new unit or replacing an old one, it’s worth taking advantage of this improved technology. Energy efficient or high-efficiency water heaters are a cost-effective and reliable replacement option for your home.

Types and Brands

There are various types of energy-efficient water heaters available on the market, including tankless, heat pump, and solar water heaters.

Tankless water heaters heat water on demand, so they don’t require a storage tank. This means they don’t need to continuously heat water, resulting in less energy consumption.

Heat pump water heaters use electricity to move heat from the air or ground to heat the water. This technology is much more efficient than heating water directly with electricity or fuel.

Solar water heaters use the energy from the sun to heat water. These systems use solar collectors to absorb energy from the sun and transfer it to the water. They are a sustainable and energy efficient option but can be expensive to install.

Gas-fired water heaters with condensing technology are the most energy-efficient models available. These units can be purchased as either tank-type or tankless models.

Water tank heaters that are considered energy-efficient are designed to reduce the energy loss from their tanks by having a higher level of insulation around the tank, one-way valves where pipes connect to the tank (heat traps), or a special helical heat exchanger as found in Polaris. With an efficiency of 90% and higher, these models can substantially reduce the standby heat loss but are more expensive.

Condensing and “near-condensing” gas water heaters or boilers are much more energy-efficient than traditional models, with an efficiency of over 90%. While manufacturers of condensing heating units such as Vaillant, Baxi, and Viessmann are popular in Europe, they are relatively new products in North America. Tankless water heater manufacturers such as NoritzRinnai, and Takagi offer models with the tankless and condensing technology, while AO Smith and Polaris offer tank-type heaters.

If you are interested in gas-powered energy-efficient water heaters, consider purchasing a sealed combustion unit, also known as a direct vented or power vented unit. Sealed combustion units bring in outside fresh air directly to the water heater and vent exhaust gases outside, keeping combustion independent from the inside air. This is achieved through a special venting kit, which usually comes separately from the heater.

Note: “ENERGY STAR was developed by the US Environmental Protection Agency (EPA) and the US Department of Energy to reduce energy use and air pollution by labeling energy-efficient, cost-saving products used in homes and offices.” (source

High-Efficient Tank Type Heaters vs. Conventional

Gas-powered, energy-efficient water heaters in the tank-type group work similarly to standard models: a burner heats water in a glass-lined steel tank from the bottom up. However, high-efficiency (HE) water heaters have thicker tank insulation for better heat retention and reduced standby heat loss, which is wasted energy lost through the tank’s walls.

In addition, HE models are built with heat traps that allow water to flow into the tank but prevent hot water from leaving, and high-efficiency burners that transfer more heat to the water.

Manufacturers may also include a power vent to speed up the venting of combustion gases, along with a flue baffle and flue damper to control heat loss through the vent.

Unlike standard models, HE water heaters use electronic ignition instead of a pilot light that wastes gas when heating is not needed.

Energy Star-certified water heaters use a minimum of 5% less energy than standard models.

Buying Tips

If you have decided to buy an energy-efficient water heater, whether through an online store, retailers like Home Depot or Lowe’s, or contractors, look for the blue tag on the unit and the familiar ENERGY STAR logo (see the picture). Also, check for rebates and government tax credits.

If you have a favorite brand, such as Rinnai, Rheem, Noritz, Takagi, Bosch, AO Smith, etc., find out which qualified Energy Star water heaters are available on the market.

Do you prefer tankless heaters or tank type?

Decide on the size/capacity you need. Is your preference a 40 or 50-gallon tank-type or a 2-bathroom tankless heater?

If you plan to replace the old heating unit and were satisfied with the capacity, use the same tank size. If you don’t know the size, check the manual or find the sticker on the unit.

The first-hour rating is another critical factor when selecting the best energy-efficient water heater. It shows how much hot water the unit can deliver during a busy hour. It is essential to have enough hot water during peak hours, such as when children and teenagers are growing, or when you are adding a shower, dishwasher, or washing machine.

Another essential factor is the Energy Factor (EF) or Universal Energy Factor (UEF). It is recommended to buy a heater with the highest EF (UEF) if it is within your price range.

Requirements for Water Heaters to Qualify for Energy Star

To qualify for the Energy Star label, water heaters must meet certain requirements set by the U.S. Environmental Protection Agency (EPA). These requirements vary depending on the type of water heater.

Gas-powered storage tank-type water heater should have an energy factor (EF/UEF) of 0.67 or higher and a first-hour rating of at least 67 gallons per hour.

Gas tankless water heater requirement for EF (UEF) is 0.82 or higher and 2.5 GPM water flow or higher – 109 F temperature rise or higher.

Requirements for condensing gas storage heaters are; EF (UEF) 0.80 or higher and the first-hour rating 67 gallons per hour, minimum.

The heat pump water heater should have an EF (UEF) of 2 or higher and a first-hour rating of 50 GPH or higher.

Solar water heaters should have Net solar energy contribution equivalent to ≥ 7.0 GJ/year.

Important: To stay up-to-date on the latest requirements for energy-efficient water heaters, please refer to the Energy Star website. They provide detailed information on the criteria that water heaters must meet to earn the Energy Star label.

Also, keep in mind the following:

“If everyone in the US purchasing a standard gas water heater this year, choose a qualified Energy Star model instead, we would prevent one billion pounds of carbon dioxide from entering the atmosphere, the equivalent of creating 132,000 acres of forest .” (source


Are Energy-Efficient Water Heaters More Expensive Than Standard Models?

Yes, energy-efficient water heaters can be more expensive than standard models, but they can also save you money in the long run by using less energy and reducing your utility bills. Studies show that switching to an Energy Star water heater can save up to 25% on energy bills.

Are Tankless Water Heaters More Energy Efficient?

Generally speaking, tankless water heaters are more energy-efficient than traditional tank-style water heaters. This is because tankless water heaters only heat water as it is needed, which eliminates the standby heat loss that occurs with tank-style water heaters. Standby heat loss is the energy lost when hot water sits in a tank and cools down over time, requiring the water heater to work harder to keep the water at the desired temperature.

Are Tankless Water Heaters More Energy Efficient?

Yes, tax credits and rebates are available for purchasing an Energy Star water heater. Homeowners can take advantage of federal tax credits as well as rebates from many states and utility companies. To get specific information about available incentives, it is recommended to check with your local government and utility companies.

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