According to Consumer Reports water heating amounts to nearly 20 percent of a home's energy costs. As the result of new efficiency standards, water heaters under 55 gallons will see about a 4 percent boost in efficiency, while water heaters 55 gallons or more may cut your utility bills by 25 to 50 percent depending on the technology used.
Tankless (or on-demand) water heater
Tankless water heaters, also known as demand-type or instantaneous water heaters, provide hot water only as it is needed. They don't produce the standby energy losses associated with storage water heaters, which can save you money. Here you'll find basic information about how they work, whether a tankless water heater might be right for your home, and what criteria to use when selecting the right model. Check out the Energy Saver 101: Water Heating infographic below to learn if a tankless water heater is right for you.
How they work
Tankless water heaters heat water directly without the use of a storage tank. When a hot water tap is turned on, cold water travels through a pipe into the unit. Either a gas burner or an electric element heats the water. As a result, tankless water heaters deliver a constant supply of hot water. You don't need to wait for a storage tank to fill up with enough hot water. However, a tankless water heater's output limits the flow rate.
Features to consider in on demand water heaters
Warranty: Coverage for most water heaters typically runs 3 to 12 years. While you'll usually pay a bit more for longer-warranty models, they tend to have larger elements or burners that can speed up water heating and thicker insulation for less heat loss. Choose a water heater with the longest warranty available.
Anti-Scale Devices: Some brands advertise features that are supposed to reduce buildup of mineral scale at the bottom of the tank by swirling the water. While scale can shorten the life of the heating element, you don‘t need to invest in fancy features to get a long-lived water heater. Just look for one with a 12-year warranty, which typically includes a longer or thicker element.
Brass vs. Plastic Drain Valves: These are situated near the base of the water heater for a garden hose for draining the heater. Look for brass drain valves, which are more durable than plastic.
Glass-Lined Tanks: Designed to reduce corrosion.
Digital Displays: Help you monitor levels and customize operation. Some electric/heat-pump hybrid water heaters let you set a vacation mode that uses just the heat pump for added efficiency when you're away. Displays on solar water heaters often show tank and collector temperatures, along with pressure readings and other info.