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Water Heater Efficiency Ratings

Water Heater Efficiency

According to, your water heater accounts for about 15-20% of your monthly energy bill.  When it comes time to purchase a new hot water heater, it is important to understand efficiency ratings of the many types of water heaters that are out there. 

Energy efficiency of water heaters is discussed in terms of two metrics: First-hour rating (FHR) and efficiency. First-hour rating (FHR) measures how much hot water is available during the busiest hour of the day. Interestingly, the size of the water heater does not always correlate with the FHR. More importantly, look for the recovery rating, which tells you how quickly the water heater will replace the hot water as it is used.

Water heater efficiency ratings or efficiency factor (EF) tells you how energy efficient the appliance is.  The higher the number, the more efficient. You can find the EF next to the energy guide label.  This number can be misleading, because an electric hot water heater is always going to use more energy to heat the same amount of water as a gas one, even if they have the same EF.

There are 4 types of “High Efficiency” Water Heaters on the market: Storage Water Heaters (those with a tank), Demand Water Heaters (tankless), Heat Pump Water Heaters, and Solar Water Heaters. Storage water heaters have a large tank, usually 20-80 gallons, where it stores hot water. The water is kept hot at all times, which uses significant amounts of energy. Storage water heaters can be powered by electricity, natural gas, propane, or oil. Demand water heaters quickly heat water using a large coil when called upon.  There is no tank for storing hot water, so energy is not wasted when the heater is not in use.  The positive is that there is an endless supply of hot water, but  some complain that you cannot supply hot water to multiple sources at the same time. Heat pump water heaters use heat from the surrounding air to water in a storage tank.  These are highly efficient but only work in warm/hot climates. Solar hot water heaters decrease energy used to heat water by up to 90%. Initial out of pocket costs are high, but they pay for themselves in 4-7 years, providing very low cost hot water for the remainder of their lifespan (10-15 years).

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