Water Heaters are one of the largest energy users in your home. They use natural gas or electricity to heat your hot water. Gas and electricity are fossil fuels and have a higher environmental impact than renewable electricity sources like wind or solar power.

You can choose from a traditional storage tank, tankless/on demand, or hybrid electric heaters. Each has its strengths and weaknesses.
Inefficient water heaters consume large amounts of energy, leading to sky-high utility bills for homeowners. In addition, they burn fossil fuels releasing greenhouse gases and dangerous toxins into the air. Fortunately, high-efficiency water heaters (HPWH) can help reduce utility costs and carbon emissions. But how do you know if an HPWH is right for your home?
You can look at the bright yellow and black ENERGY STAR label on storage and instantaneous gas and electric water heaters to get a reliable measure of efficiency. But to truly compare models, you must look at the Uniform Energy Factor rating (UEF).
The UEF rating measures a water heater’s efficiency by performing a 24-hour simulated test. During the test, a specific number of gallons is drawn from the tank in six equally-spaced draws that start one hour apart. The total energy used is then calculated. This includes the energy to heat the water, the energy expended to recover standby losses, and any energy lost down the flue. The resulting rating is then expressed as a decimal.
ENERGY STAR has recently changed its ratings system, making it more accurate and meaningful. In addition to the new UEF rating, ENERGY STAR has also improved its Annual Fuel Utilization Efficiency (AFUE) standards for residential gas and oil water heaters.
As a result, new AFUE standards allow gas and oil water heaters to use up to 10% less energy than older models. Choosing a high-efficiency model can significantly cut your energy usage and costs.
A high-efficiency model will also require significantly less maintenance than a conventional model, and may last twice as long as old models. For many families, a new, more efficient water heater can pay for itself in less than five years.
ENERGY STAR has updated its requirements for gas-powered and electric hot water heaters to better reflect real-world use patterns and to account for the additional heating energy required by some customers with very hot water needs. These updates will make it easier for consumers to find a high-efficiency model that meets their hot water demands.
Safety
Water heaters are one of the household appliances that tend to receive far less attention than they deserve. It’s easy to assume that as long as hot water is coming out of the tap, all is well. But as it turns out, your water heater could be hiding some festering problems that pose a serious threat to your family’s safety.
Fire is a real risk with many home appliances, and your water heater is no exception. The hot water tank contains flammable gas, and as the heating elements operate, they emit a small flame that could ignite surrounding materials or debris. Always keep combustible materials, like clothing and ropes away from your water heater, and never use it as a place to store flammable objects like a matchbox or lighter.
Carbon monoxide is another hazard that can be released from a water heater. The nearly undetectable gas can cause serious health problems and even death, so it’s crucial to have a carbon monoxide detector installed in your home. In addition, your water heater’s ventilation system may be faulty. If the vents have dips or are obstructed, fumes can leak into your home, so make sure they’re free of drafts and are properly screwed in.
Electrical shocks are another possible hazard from your water heater, especially if you’re using an electric model. It’s important to hire a licensed electrical worker (LEW) to ensure your water heater is safely wired during installation. Additionally, be careful not to plug electrical devices into a socket that’s too close to your water heater. And finally, water heaters draw a lot of current, so it’s important to keep them at least 6 inches away from electrical devices, like computers and televisions.
Scalding is a major problem with many water heaters. The hot water stored in your tank is usually much higher than the temperature that comes out of your faucet, so it can burn if accidentally touched. Cash Acme recommends installing a thermostatic mixing valve to temper your water upon exiting the storage tank, so it’s not as hot and dangerous.
Installation
Water heaters are heavy, bulky appliances that require professional installation. Local building codes may require a permit and inspections for water heater installations and replacements. If you plan to install a new gas, electric or hybrid water heater yourself, be sure to read the manufacturer’s printed instructions and all warnings carefully before beginning. You’ll be working with natural gas, propane and electricity, all of which can be hazardous. You’ll also need a few tools and supplies, including a pipe wrench or channel-lock pliers, a pipe cutter, copper tubing, pipe adapters and a soldering iron.
Before starting to remove an existing water heater, drain it by attaching a garden hose to the drain valve at the bottom of the unit and running it outdoors or into a floor drain. Turn off the power to the water heater at the circuit breaker and use a non-contact voltage tester or inexpensive multi-meter to make sure electrical wires are not energized. Remove the access panel, if necessary, and disconnect the hot and cold water lines from their connections at the water heater. You’ll need to replace the gas and electric supply line shutoff valves as well.
If you’re installing a new gas water heater, follow the manufacturer’s instructions for connecting the gas lines. Be sure the gas line size and voltage are compatible with the water heater’s capacity. Then, install a metal sediment trap on the gas line entering the water heater to prevent mineral buildup in the combustion chamber.
A new water heater should be located in an area with adequate ventilation to avoid carbon monoxide poisoning, a colorless and odorless gas that can be fatal at high levels. Be sure the gas line enters the water heater at a low point and is not less than 6 inches from combustible materials such as wood framing.
If you’re replacing an existing water heater, place a sturdy heat-resistant drain pan underneath the tank in indoor environments to protect the floor from water leaks and pressure valve runoffs. You should also install a carbon monoxide detector near the water heater in case of an accidental CO leak. In addition, a dedicated water shutoff is recommended so that you can turn off the water flow to the water heater for maintenance and repairs without cutting off water to the rest of your home.
Maintenance
A gas water heater’s lifespan can be extended through preventative maintenance. An annual inspection and the occasional draining of sediment will help ensure safety, reduce energy consumption and protect your investment. Water damage from failing and faulty water heaters is one of the most common homeowner policy claims.
Leaks from the cold water inlet at the top of the tank can often be corrected by tightening the valve with a wrench. The temperature and pressure (T&P) relief valve should also be inspected annually. This is a safety feature that relieves excess water and pressure in the event of a thermal expansion tank failure or excessive water pressure. To inspect it, shut off the power and water supply to the water heater. Connect a garden hose to the drainage spigot and use the hose to drain about 10 percent of the tank’s volume. If the anode rod has corroded, replace it.
The thermostat temperature dial or control knob on an electric water heater should be set to 120 degrees Fahrenheit. Setting the temperature higher than this can result in dangerously hot scalding water and increase sediment buildup. On a gas water heater, the pilot light should be checked and re-lit if necessary. Check your owner’s manual for detailed instructions on lighting the pilot light, or ask a professional to do it if you have any questions.
Insulating the water heater and pipes can improve energy efficiency by reducing heat loss. Measure the dimensions of the pipes and choose insulation materials like foam sleeves that precisely fit them. Install the insulation starting at the cold water inlet and working your way to the top of the tank.
If your water heater is older and inefficient, consider upgrading to a new model that uses less energy. A gas-powered unit may cost more upfront, but it can pay for itself in a few years with lower utility bills and fewer repairs.