Energy Efficiency and Your Water Heater (Part One)

Although water heating will consume approximately 15% of the average family’s annual use of electricity (25% of natural gas use) in the home, not many fully understand how the wasted energy is lost and what can be done to reduce this waste.  Most of what they know comes from the power company, along with some confusion and contradiction, with electric company rebates to replace gas water heaters with electric — and gas company rebates to replace electric water heaters with gas.

To understand how to produce and use hot water more efficiently it is important to know exactly how energy is used by the common residential water heater.  In the typical residential dwelling the water heater will use energy in three ways:  demand, standy and distribution.


Demand refers to the use of energy for heating incoming cold water up to the temperature setpoint as hot water within the tank is used.  The amount of demand energy that is used will depend upon the energy efficiency of the water heater’s design, behavior of the hot water users and the consumption of fixtures like the dishwasher, clothes washer or shower.


Standby energy is in the form of heat that is lost through the walls of the storage tank’s walls.  Standby losses can vary from 20% to 60% of energy loss depending upon the amount of demand.  The greater the demand, the less time the water is stored in the tank and the less standby energy loss.  Households using less hot water will have the highest percentage of standby energy loss.


Losses through distribution occurs as heat escapes through the pipes and fixtures.   Pipes that are nearer to the water heater will lose heat even when the water is not flowing as hot water rises out of the tank, is then cooled in nearby pipes, and falls back down into the tank to be reheated.

These three factors are important to know and understand as one seeks and determines the best actions to take in improving the energy efficiency of their hot water systems.

Newer water heaters are designed with increased insulation and, in some cases, adding additional insulation to the outside of the tank to reduce standby energy loss may void their warranty and/or show minimal improvement.

Smaller tanks with a higher demand will probably show less improvement by insulating the distribution system to reduce energy loss than larger units with less demand.

Reducing energy demand through behavior changes or equipment changes will, as we see, increase the standby energy loss and require additional measures, as well.

A diagnostic home performance evaluation will assist home owners in selecting the most efficient, safest and balanced means of heating water in their homes — in addition to addressing the entire home as one single system.

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  1. Pingback: Energy Efficiency and Your Water Heater (Part Two) | Houses and Stuff

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