Right after heating and cooling, hot water is a typical home’s biggest energy  expense. The EPA reports that the average household spends $400 to $600 a year  on it. And for all that money spent, you won’t get a lot of well-used energy in  return. That old tank buried behind boxes in your basement is most likely losing  a ton: only 43 percent of a water heater’s energy goes toward heating the water  you actually use; 31 percent is lost to standby heating (keeping the water in  the tank hot). I’m talking about a clunky, more-than-a-decade-old hot water  heater, the kind many of us — 27 million households — own. Seeing as a water  heater only lasts about 10 to 15 years, we’ll have no choice but to upgrade  soon. Here’s an opportunity to start thinking about energy-efficient options  now, before that hot water runs out.

Conserve Energy First

Before we get to the new showroom models, let’s return to our mantra of  conservation. Maybe your budget won’t allow for a big piece of new hardware, or  maybe your landlord won’t pony up for the building. There’s still a lot you and  your fellow tenants can do. If you’re hardcore, shorten your showers. Or if you  don’t have the self-control, reduce your use automatically, and thus your  heater’s workload, by installing a low-flow showerhead.

Next, try turning down the temperature. This isn’t as scary as it sounds — you won’t be left with dirty dishes or suffer through washing your hair in  lukewarm water. Many hot water heaters are preset to 140 degrees Fahrenheit,  which is too hot for most domestic uses. Ever have to mix your hot water with  cold to get just the right temperature? You’re wasting the electricity that was  used to heat the hot water in the first place. You probably won’t even notice  the difference if you turn down the thermostat to 120 degrees (115 degrees may  feel just fine), and you’ll also save roughly 10 percent of the energy it takes  to heat your water. Or to look at it from a financial perspective, for every 10  degrees you lower the temperature, you’ll save 3 to 5 percent on your  water-heating costs. Don’t forget to turn your thermostat to the lowest possible  setting when you’re away on vacation. There’s no sense in heating water for  nobody to use.

Insulating your older water heater in a blanket (most newer heaters are  already well clothed) is perhaps one of the easiest do-it-yourself energy saving  actions you can perform. It’s cheap too: A home-improvement store will likely  have one on the shelf for around $25. Swaddling your pipes in conjunction with  the tank will save you roughly another 10 percent. This is easier said than  done, because of the nature of pipes winding this way and that and disappearing  into walls and crawl spaces, but at the very least you should insulate exposed  pipes—they sell pipe-sleeve insulation, the thicker the better, just for this  purpose.

About to Run Out of Hot Water?

Let’s say you’ve been conserving and insulating for a few years, but recently  your water heater started giving signs that it’s heading for the grave. Now’s  your chance (or your landlord’s chance if you can convert her) to purchase a  modern energy-efficient model. Energy Star recently gave its coveted blessing to  five different types of water heaters; some only came on the market in 2009.  There seems to be a model for everyone, in every situation. Four of the options  are described below, and solar water heaters are also an option.

High-Efficiency Gas Water Heater

First, a slight but significant shift up from the status quo. Do you or your  landlord have a gas water heater? Are you pretty much satisfied with it, in  terms of delivery of hot water and maintenance? Do you have a little extra cash  to spend but not much? Then Energy Star recommends a high-efficiency gas storage  water heater. You’ll trade a little money spent up front (recouped in about two  and a half years) for an approximately 7.5 percent increase in efficiency and a  7 percent reduction in your water-heating bills — about $30 a year or $360 over  the course of its 13 years of life. What’s more, the planet gets a break  too.

If everyone who planned on purchasing a gas water heater in 2009 opted for a  high-efficiency model, about 1 billion pounds of CO2 would be kept out of the  atmosphere. All of this results from some simple improvements in the basic water  heater design: better insulation, heat traps, and burners.

Gas Condensing Water Heater

If you have a couple teenagers in the house and/or for other reasons often  run out of hot water — and want to take advantage of newer technology — think  about a gas condensing water heater. Yes, you’ll pay more up front, but you’ll  decrease the money spent on hot water by about 30 percent, saving roughly $100  each year. That savings is compounded by regular federal tax credits (30 percent  of the cost up to $1500 in 2010) as well as potential local rebates. Energy Star  boasts that if only 5 percent of prospective gas water heater buyers purchased  one of its qualified gas condensing models, consumers would save $25 million  every year, and the effect would be equivalent to taking 17,000 cars off the  road.

Plus you get lots and lots and lots of hot water — you won’t have to worry  about running out in the morning if you’re the last person in the shower line.  New technological design helps the tank heat up almost as quickly as it’s filled  up. Like regular gas water heaters, condensing models produce waste combustion  gasses. Unlike their conventional counterparts, they don’t vent them directly  outside but capture them and use them to heat the water more before finally  releasing them.

Electric Heat Pump Water Heater

Many a homeowner or utility-paying renter has suffered through the high cost  of running an electric hot water heater. Though a good electric tank is more  efficient than a good gas tank (90 percent versus 60 percent; the remaining  percentages are what’s wasted in the process of heating the water), electricity  is much more expensive in most parts of the country and, more importantly when  considering your energy budget, is a much less efficient form of energy because  energy is lost when electricity is transmitted through the grid. So who among  the electric water-heating crew wouldn’t jump at the chance to cut his or her  bill by about 50 percent? Or to save roughly $300 a year?

Takers should consider an electric heat pump water heater. If all who were  planning on buying a new electric water heater did, the planetary savings would  be significant: Energy Star says that in 2009 buyers could have kept 19.6  billion pounds of CO2 out of the atmosphere by choosing an electric heat pump  over a conventional tank — a feat equivalent to taking 1.6 million cars off the  road.

Heat pumps operate using a technology that Energy Star describes as a “refrigerator working in reverse.” While your fridge expels hot air from its  chilly interior to the outside, a heat pump takes warm air from outside the  water tank and brings it inside to heat the water — essentially moving heat  around instead of wasting more energy creating it. There are drawbacks to this  more efficient method: heat pumps need to be housed indoors at a temperature  between 40 degrees and 90 degrees (they don’t operate as well in the cold);  they’re claustrophobic (requiring about 1,000 cubic feet of air space around  them); and they’re a bit frigid themselves (they actually cool the air around  them). Energy Star recommends putting them in a space with extra heat, like a  furnace room — this seems like a good option for an apartment building. Electric  heat pump water heaters are also more expensive up front, but their payback time  is better than most — about three years — and they qualify for tax credits and  rebates at all levels.

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