Basic Information to Consider for Home Water Heating

Reviewed and Revised on 01/03/2014

Energy Usage in Home Water Heating 

Closed-combustion water heater with power vent fan

Water heating is often the third largest energy expense in your home, after heating and cooling. It accounts for 15-25% of your utility bill. It’s not hard to see why —  family of four, each taking a 5-minute shower every day using inefficient shower heads, can use 700 gallons of water in one week. This is enough for a three year supply of drinking water for one person. There are simple ways to reduce the amount of money you spend on heating water including insulating your water heater and pipes; reducing the amount of hot water used by taking shorter showers, washing clothes in cold water, and only running full loads of dishes and clothing; and turning down the thermostat on your water heater to 120 degrees. Other more complicated methods include:

Correct Sizing of the Water Heater 

A water heater should be of large enough size that it can provide hot water during the household’s busiest times of the day. To determine this, first consider the size of your family. A home with two adults could use up to 30 gallons of hot water in an hour, whereas a family of six may use 70 gallons in an hour of peak use. A water heater that is too small won’t keep up with your family’s hot water demands. However, a water heater that is too large will increase the standby losses (the amount of heat the water heater loses as it stands waiting to be used). Standby losses can vary by model. In addition, evaluate the need for an on-demand water heater. When the current water heater location is a long distance from the source of hot water use, consider an on-demand water heater located at that point of use. The US Department Of Energy’s website provides detailed guidance on how to size different kinds of water heaters.

Carefully Selecting the Water Heater’s Location

If building a new home, try to locate the water heater close to high hot water use areas such as bathrooms, the laundry, and the kitchen. This will mean a shorter pipe “run” with less loss of heat through pipe walls and hotter water arriving sooner at the tap.

Maintaining Your Existing Water Heater

It is important to maintain your water heater to improve it’s efficiency. First, you should flush it out quarterly, semi-annually, or annually depending on the water hardness. This will reduce the build up of debris at the bottom of the heater that can reduce heat transfer and shorten the life of the water heater. Next, you can install pipe insulation on the inlet and outlet pipes to reduce standby losses. Lastly, you can insulate the tank, but be careful not to get too close to the vent pipe, restrict combustion air supply, or cover any controls.


tankless water heater

On-demand water heater


Finding a New Energy Efficient Water Heater

There are many ways to heat water. If you are in the market for a new water heater, first check the U.S. Department of Energy’s (DOE) web site for information on energy efficiency, fuel types, new technologies, and availability. You might also check with your utility company, as they may offer rebates or incentives for certain types of energy efficient water heaters. Keep in mind that your choice of water heater and its fuel source will depend, in part, on where you live and the type and size of space available.

When shopping, read the EnergyGuide label, and look for the ENERGY STAR® symbol. Read more about ENERGY STAR products and water heaters.

When shopping for an energy efficient water heater, keep in mind your hot water needs. Also, don’t forget to take into account water conservation measures, like installing low-flow shower heads. For additional information go to: