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Water heater energy guide

Water heating accounts for about 18% of your home's energy use. Reducing your hot water use, employing energy-saving strategies, and choosing an energy efficient water heater for your home pool can help you reduce your monthly water heating bills.

Selecting a new water heater

When selecting a new water heater for your home, choose a water heating system that will not only provide enough hot water but also that will do so energy efficiently, saving you money. This includes considering the different types of water heaters available and determining the right size and fuel source for your home. Since water is constantly heated in the tank, energy can be wasted even when a hot water tap isn't running.

Types of Water Heaters

It's a good idea to know the different types of water heaters available before you purchase one:

Conventional storage water heaters

A single-family storage water heater offers a ready reservoir - from 20 to 80 gallons - of hot water. It operates by releasing hot water from the top of the tank when you turn on the hot water tap. To replace that hot water, cold water enters the bottom of the tank, ensuring that the tank is always full. Some storage water heater models have heavily insulated tank, which significantly reduce standby heat losses and lower annual operating costs. Look for models with tanks that have a thermal resistance (R-Value) of R-12 to R-25.

The lowest-priced storage water heater may be the most expensive to operate and maintain over its lifetime. While an oversized unit may be alluring, it carries a higher purchase price and increased energy costs due to higher standby energy losses.

Tankless or demand-type water heaters

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. 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. Typically, tankless water heaters provide hot water at a rate of 2–5 gallons (7.6–15.2 liters) per minute.Sometimes, however, even the largest  model cannot supply enough hot water for simultaneous, multiple uses in large households. For example, taking a shower and running the dishwasher at the same time can stretch a tankless water heater to its limit. To overcome this problem, you can install two or more tankless water heaters, connected in parallel for simultaneous demands of hot water. You can also install separate tankless water heaters for appliances - such as a clothes washer or dishwater - that use a lot of hot water in your home

What are the advantages and disadvantages?

For homes that use 41 gallons or less of hot water daily, demand water heaters can be 24%–34% more energy efficient than conventional storage tank water heaters. They can be 8%–14% more energy efficient for homes that use a lot of hot water - around 86 gallons per day. You can achieve even greater energy savings of 27%–50% if you install a demand water heater at each hot water outlet. ENERGY STAR® estimates that a typical family can save $100 or more per year with an ENERGY STAR qualified tankless water heater.

The initial cost of a tankless water heater is greater than that of a conventional storage water heater, but tankless water heaters will typically last longer and have lower operating and energy costs, which could offset its higher purchase price. Most tankless water heaters have a life expectancy of more than 20 years. They also have easily replaceable parts that extend their life by many more years. In contrast, storage water heaters last 10–15 years.

Heat pump water heaters

Most homeowners who have heat pumps use them to heat and cool their homes. But a heat pump also can be used to heat water - either as stand-alone water heating system, or as combination water heating and space conditioning system.

Heat pump water heaters use electricity to move heat from one place to another instead of generating heat directly. Therefore, they can be two to three times more energy efficient than conventional electric resistance water heaters. To move the heat, heat pumps work like a refrigerator in reverse.

While a refrigerator pulls heat from inside a box and dumps it into the surrounding room, a stand-alone air-source heat pump water heater pulls heat from the surrounding air and dumps it - at a higher temperature - into a tank to heat water. You can purchase a stand-alone heat pump water heating system as an integrated unit with a built-in water storage tank and back-up resistance heating elements. You can also retrofit a heat pump to work with an existing conventional storage water heater.

Heat pump water heaters require installation in locations that remain in the 40º–90ºF (4.4º–32.2ºC) range year-round and provide at least 1,000 cubic feet (28.3 cubic meters) of air space around the water heater. Cool exhaust air can be exhausted to the room or outdoors. Install them in a space with excess heat, such as a furnace room. Heat pump water heaters will not operate efficiently in a cold space. They tend to cool the spaces they are in. You can also install an air-source heat pump system that combines heating, cooling, and water heating. These combination systems pull their heat indoors from the outdoor air in the winter and from the indoor air in the summer. Because they remove heat from the air, any type of air-source heat pump system works more efficiently in a warm climate.

Heat pump water heater systems typically have higher initial costs than conventional storage water heaters. However, they have lower operating costs, which can offset their higher purchase and installation prices.

Solar water heaters

Solar water heaters - also called solar domestic hot water systems - can be a cost-effective way to generate hot water for your home. They can be used in any climate, and the fuel they use - sunshine - is free.

Solar water heating systems include storage tanks and solar collectors. There are two types of solar water heating systems: active, which have circulating pumps and controls, and passive, which don't.

Active solar water heating systems

There are two types of active solar water heating systems:

  • Direct circulation systems: Pumps circulate household water through the collectors and into the home. They work well in climates where it rarely freezes.
  • Indirect circulation systems: Pumps circulate a non-freezing, heat-transfer fluid through the collectors and a heat exchanger. This heats the water that then flows into the home. They are popular in climates prone to freezing temperatures.

Passive solar water heating systems

Passive solar water heating systems are typically less expensive than active systems, but they're usually not as efficient. However, passive systems can be more reliable and may last longer.

There are two basic types of passive systems:

  • Integral collector-storage passive systems: These work best in areas where temperatures rarely fall below freezing. They also work well in households with significant daytime and evening hot-water needs.
  • Thermosyphon systems: Water flows through the system when warm water rises as cooler water sinks. The collector must be installed below the storage tank so that warm water will rise into the tank. These systems are reliable, but contractors must pay careful attention to the roof design because of the heavy storage tank. They are usually more expensive than integral collector-storage passive systems.

Storage tanks and solar collectors

Most solar water heaters require a well-insulated storage tank. Solar storage tanks have an additional outlet and inlet connected to and from the collector. In two-tank systems, the solar water heater preheats water before it enters the conventional water heater. In one-tank systems, the back-up heater is combined with the solar storage in one tank.

Three types of solar collectors are used for residential applications:

  • Flat-plate collector: Glazed flat-plate collectors are insulated, weatherproofed boxes that contain a dark absorber plate under one or more glass or plastic (polymer) covers. Unglazed flat-plate collectors - typically used for solar pool heating - have a dark absorber plate, made of metal or polymer, without a cover or enclosure.
  • Integral collector-storage systems: Also known as ICS or batch systems, they feature one or more black tanks or tubes in an insulated, glazed box. Cold water first passes through the solar collector, which preheats the water. The water then continues on to the conventional backup water heater, providing a reliable source of hot water. They should be installed only in mild-freeze climates because the outdoor pipes could freeze in severe, cold weather.
  • Evacuated-tube solar collectors: They feature parallel rows of transparent glass tubes. Each tube contains a glass outer tube and metal absorber tube attached to a fin. The fin's coating absorbs solar energy but inhibits radiative heat loss. These collectors are used more frequently for U.S. commercial applications.

Solar water heating systems almost always require a backup system for cloudy days and times of increased demand. Conventional storage water heaters usually provide backup and may already be part of the solar system package. A backup system may also be part of the solar collector, such as rooftop tanks with thermosyphon systems. Since an integral-collector storage system already stores hot water in addition to collecting solar heat, it may be packaged with a tankless or demand-type water heater for backup.

Information on this webpage has been referenced from the US Department of Energy website.

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