7 Expert Tips to Find an Electricity-Saving Water Heater

7 Tips for Shopping for an Energy Efficient Water Heater that saves Electricity


When shopping for an energy-efficient water heater, you’ll want to look out for certain tell-tale signs that indicate how efficient the unit will be. 

While there are many different types of energy-efficient heaters, they all share some similar features, which we’ve outlined here in this article on how to shop for an energy-efficient water heater that saves Electricity. 

You may also be interested in this article entitled Water Heater Maintenance: What You Need to Know, or our article What Happens When Your Water Heater Breaks? Enjoy!

Assess your needs

Do you live in a cold climate? 

Is your family big? 

Do you use a lot of hot water during the day? 

Are there other factors affecting how much energy your water heater will use? 

It would help to consider these things when deciding on an energy-efficient water heater. To help, we’ve put together tips to make it easier:

  • Consider what type of heating system your home has – some homes have natural gas, while others may be electric or oil.
  • If you live in a colder climate and have natural gas, consider getting a tankless water heater.
  • If you’re shopping for Electricity or oil, look into a heat pump or solar water heaters, as these are more efficient than traditional ones.

Prefer Tankless Water Heater

Tankless water heaters are best suited for a small house with just one bathroom and minimal showers or baths, where the hot water is used quickly. 

If you want to save even more money and continue to have your water heated with a tankless gas heater, you can use a whole-home tankless heater. 

A tankless heater can also be useful if your home often runs out of hot water or has limited space for a water heater. The tankless water heater heats water as needed, which helps the home save more — up to 30% annually in the future.

Research your options

Find out your local utility company’s rebates, if any, on energy-efficient water heaters. In addition, many utilities offer free or low-cost installation of these units if you meet the qualifications.

Ask friends and family members who have installed a water heater recently about their experience with the contractor they hired to install it, whether or not it was energy efficient, and how easy it was to work with them. 

Consider what type of heating system your home uses–gas or electric–and then determine which type of water heater is best suited for your needs.

Compare energy usage


The Environmental Protection Agency (EPA) estimates home water heaters account for 10% of the energy used in homes. 

Therefore, when shopping for a new water heater, it is important to compare its estimated annual operating cost with others. 

The lower the operating cost, the more efficient your new water heater will reduce your electricity bill and save you money on electric bills. 

Annual Operating Cost

This is how much it costs to operate your new water heater each year based on a 10-year life span and electric rates according to the U.S. Department of Energy’s national average electric rate of 12 cents per kilowatt hour (kWh).

Look at the Annual Energy Efficiency Ratio (EER)

This measures how a unit of Electricity or natural gas produces much heat. A higher EER means greater efficiency and lower electric or gas bills.

Compare Heat Transfer Rates (BTU/HR)

This indicates how quickly the unit can provide hot water to meet your needs.

Read more about: The Future is Smart: How Smart Home Technology is Revolutionizing Energy Efficiency

Compare prices

Energy-efficient water heaters are more expensive than gas and electric water heaters, but in the long run, they save you money. 

Gas and electric water heaters have a lower upfront cost but can cost you more on your monthly bill. In addition, gas and electric water heater prices can fluctuate monthly, so it can be challenging to predict the total cost over time. 

In contrast, with an energy-efficient water heater, you know exactly what the annualized cost will be because it is fixed until your contract is up for renewal. This means you’ll learn how much money you’re spending on gas or Electricity each year before deciding which type of water heater to buy.

Consider these things

  • Install a water heater with a lower wattage than your old one. If you have an electric water heater, get one with at least 250 watts less than the old one. If you have a gas water heater, get one with at least 100,000 BTUs less than the old one. 
  • Look for features on some water heaters, like special coatings or insulation, to help keep them cool and save more energy dollars in the long run. 
  • Take advantage of rebates and tax credits offered by your local government to help offset the cost of upgrading your current water heater – it will be worth it!

Check for rebates

Find out what rebates are available in your area. Rebates can be a great way to save money, and many different utilities offer them, depending on the type of water heater you purchase. 

For example, PG&E provides a rebate of $50-$300 per unit purchased at Home Depot, Lowe’s, or Sears stores. 

To find out if there are any rebates available in your area, visit the website of your local utility company or public works department. 

Consider Solar Water Heater

If you’re in the market for a new water heater, you may wonder if any solar water heaters are available. The answer is yes! Solar water heaters can produce hot water using the sun’s energy and are more efficient than traditional electric units. 

Purchase a solar water heater, which is more environmentally friendly and uses less Electricity. These water heaters are energy efficient, save money on energy bills, are safe to use around children and pets, and are easy to install.