Cities can save a lot of energy and decrease pollution by promoting the use of more efficient water heaters in new homes and through retrofitting existing homes.

Water heating is the third largest energy expense in a home. It typically accounts for 14% of the energy bill and, depending upon the water heater and the hot water distribution systems, gallons of wasted water may be flowing down the drain. Many homeowners wait for their hot water heater to fail before considering replacement, and new homeowners rarely know the specific system installed in their new home other than that the power source is gas, electric or propane. This is unfortunate, for the cost and efficiency of the heater can vary significantly, with electric heaters of any design consuming the most energy.

Gas water heaters use far less energy and produce far less pollution than electric. In a gas water heater, ALL the heat is applied directly to the water. In an electric water heater, only 15 to 30% of the energy used by the water heater actually goes towards heating the water. Consequently, electric water heaters produce three to five times more pollution to heat a gallon of water.

While gas water heaters are far cleaner than electric, they still produce tons of unneeded pollution per year because their pilot lights burn all the time. Some cities already require all new water heaters to have electronic igniters in place of pilot lights.

The most common water heater used today is the storage water heater. While hot water is being used, cold water refills the tank and is heated. Energy is used to heat the water even when there is no demand. Newer models have reduced this standby heat loss. Additionally, there are several water heater options on the market today that provide energy savings. These include tankless or on-demand water heaters that eliminate the need for storage tanks, heat pump water heaters and solar water heaters.

Tankless water heaters can reduce energy consumption by 20-30%. Typically an on-demand heater provides hot water at a rate of 2 to 5 gallons per minute. Depending on the hot water usage in a home more than one unit may be required.

Water Heater Efficiencies

Residential Appliance Type Efficiency Parameter (1) 2000 Stock Efficiency Minimum New Efficiency (2) 2001
Best-Available New Efficiency
Electric Water Heaters EF 0.88 0.88 0.95
Gas Water Heaters EF 0.54 0.54 0.95
Solar Water Heaters SEF N. A. 0.80 4.80


Commercial Appliance Type Efficiency Parameter (1) 1992 Stock Efficiency Minimum New Efficiency (2) 1998
Best-Available New Efficiency
Electric Water Heaters EF 0.75 None (3) 0.95
Gas Water Heaters EF 0.65 0.78 (4) 0.86