February 15, 2022

Most Energy Efficient Water Heater

Most Energy Efficient Water Heater

What Are Water Heaters?

While it is not something most of us will think about every day, it is crucial and something most of us can’t live without. We are talking about access to hot water directly from the taps. So, what is the most energy efficient water heater you should get?

If you have a water heater that is more than ten years old, there is a good chance that you need replacements. To make the best selection for your needs, you will need to consider the size of the water heater and the type of fuel it uses. In this article, we will discuss the efficiency of water heaters and what this means to a consumer like you.

The first thing we will have to do is cover some of the basics of water heaters, which will allow you to make the best decision for your needs.

Related: The hidden costs of hard water in Calgary

Water Heaters: What is the Efficiency Rating? 

When you examine possible water heaters options for your home, you will see a sticker or label on the side that says “Energy Guide.” This sticker will give you the average annual costs for operating this unit compared to other options on the market.

If you are shopping for a new water heater online, you may find several options and make comparisons easily. Your research will give you a clearer idea of what type of water heater you will need for your home. If you find a water heater at the lower side of the scale, you may want to consider choosing a more energy-efficient option. Although it will be more expensive up front, it will get back your investment over time with lower energy bills.

Most Energy Efficient Water Heater: Old vs. New

A traditional water heater manufactured over 15 years ago will not use the same energy-efficient technology found in newer versions. A tank-style water heater will have a service life of between 10 and 15 years. You can expect that the unit’s efficiency will drop over this time. As the water heater’s efficiency lowers, your heating costs will rise. It would just be cheaper to buy a new water heater at some point.

One of the things that can significantly deteriorate the efficacy of your water heater is the presence of sediment building up in your water heater. Hard water is highly mineralized water. It can contain large quantities of calcium, iron, magnesium and other minerals. This sediment tends to collect at the bottom of your tank and can eventually reduce the efficiency of your water heater over time. In the same way, the deposit in your water heater can become lodged in your water heater’s mechanics, which will reduce functionality as well.

You may also be facing efficiency problems because the tank water heater is not providing enough water for the entire family. For example, a 40-gallon tank is not ideal for a family of six people, and the inefficiency reflects in the energy bill. If your tank is not big enough to support the needs of the people it serves, it is cost-effective to change it out for a new option.

Environmental Impact of Water Heaters 

The modern consumer is constantly concerned about the environment and consumer spending on the ecosystem. There are two important considerations here — greenhouse emissions and industrial waste.

The first thing to consider is that the traditional type of water heater will not last as long as a modern option. Most system will end up in the landfill within about a decade or maybe two. You can avoid increasing the waste that ends up in the landfill by opting for a modern variety that will last longer and be more efficient.

But then there are the CO2 emissions to consider. As you may imagine, the solar-powered type of water heater will produce the least amount of greenhouse gasses. But, these types of water heaters will often need an electrical backup. It is necessary for those cold and rainy days when you need a hot shower. However, there’s not enough solar energy to heat the water well.

For the average homeowner, the best support for a solar water heater is the tankless water heater (gas or electric) that can provide heated water at the point of access.

Gas Water Heater vs. Electric Water Heater 

When choosing between these different types of water heaters, the first consideration is the source of fuel you will need. Most water heaters operating in residential locations use natural gas, propane gas or electricity, provided in cost, not efficiency.

Natural gas is the cheapest option, followed by propane and finally electricity. The design of a gas heater in conjunction with the laws of thermodynamics makes the average gas water heater a much cheaper option than the electric option.

Here is what you should consider:

  • The average electric water heater consumes about $500 a year heating water for an average-sized home
  • A gas water heater spends about $250 a year heating water for the same
  • home.

So, if there is a critical takeaway from all of this, a gas water heater will be much more efficient than an electric option. If you already have a gas water heater system, you should probably stick to that. But there are some other options that you can consider, and we will get into that a little further in the reading.

Three Main Types of Water Heaters 

Understanding Different Types of Water Heaters - Robillard ...

For simplification, there are three categories of water heaters that you should consider.

Standard Gas Tank

Most modern water heaters have an Efficiency Factor of .58 to .60. This tank uses roughly 58% to 60% of the energy to heat the water. Some manufacturers will reach an EF of about .62, which can save you about $8 in a year.

Energy Star Gas Tank

Energy star water heaters have an EF of .67, and you can find other manufacturers that offer as high as .70EF. As you may imagine, these energy-star-rated water heaters consist of special insulation, pilot lights, electrical igniters and damper control. The higher efficiency ratings will work to reduce your energy expenses and result in savings of between $25 and $30 each year.


It is also called “on-demand” water heaters, these options have perfected the art of gas heating. While these have been on the markets in Asia and Europe for many years, they are relatively new in the United States. These impressive water heaters have unique advantages, including space-saving, energy efficiency, and longer life spans — the tankless water heater will last almost twice as long as a regular tank water heater.

Assuming your hot water consumption will continue as it is now, you have three options to consider:

Non-condensing tankless

The first generation uses a heat exchanger to heat water on demand. Most of these will achieve an EF of 82 – 85 or an average annual saving of between $75 and $80. Some downsides include a hot exhaust and lower efficiency in shorter water usage, like washing hands.

Condensing tankless

The second-generation water heater uses a second heat exchanger to take heat from the exhaust and heat the water. The additional heat exchanger results in a higher EF of 92 – 94, eventually resulting in annual savings of between $90 and $100. The benefit is that the exhaust is much cooler than with first-generation options. The biggest downside is a higher initial cost and lower efficiency.

Condensing hybrid tankless

The third-generation water heater is commonly dubbed tankless, but it contains a small 2-gallon water tank. This tank makes short draws more efficient by maintaining a small amount of heated water ready at all times. These impressive models can reach an EF of 92% to 96%, resulting in energy savings as high as $120 — the best option in the business.

The biggest problem you will face with a new tankless water heater is retrofitting, but this procedure’s costs can be recouped within ten years while enjoying the reduced energy costs. The amount of space we save with a tankless water heater is another excellent benefit.

Energy Efficient Water Heater – Conclusion 

Understanding how energy efficiency works with water heaters is an essential first step in getting the best option for your home. It also tells you how much fuel your water heater will need to operate effectively.

Heating water with power from the mains involves a three-step process.

  1. Generating electricity using fuel, typically coal or oil.
  2. Sending that electricity by power lines to our homes.
  3. Using electricity allows an element to heat our water—however, energy wastes at each process.

Using natural gas is a more straightforward process. The gas company delivers the fuel to your home so that the water heater can heat the water. From an environmental standpoint, cleaner-burning natural gas is not only better for the planet, but we also waste less energy in the delivery process.