Energy efficient hot water heaters can significantly decrease the overall utility costs for your home. In general, there are four options that are appropriate for residential use. All of these options have both advantages and disadvantages, and most will qualify for tax credits aimed at increasing the energy efficiency of homes in the United States.
Energy Star Tank Water Heaters
The most common type is a standard tank based hot water heater. While these hot water heaters are not as efficient as other types, they are inexpensive and work well for most residences. The key to choosing this type of water heater is examining the Energy Star rating. This will allow you compare multiple models from different manufacturers to find the most energy efficient tank available. When shopping for any Energy Star appliance, choose the highest number, or rating possible. Once you have chosen the model and manufacturer, talk to a salesperson to make sure that the tank volume is correctly sized for your home.
Tankless Hot Water Heaters
Tankless hot water heaters offer on demand hot water, making them a highly energy efficient option. Rather than keeping a specific amount of water at a certain temperature, tankless heaters only heat the water being used. Unfortunately, this means that tankless hot water heaters can be overwhelmed if they need to provide hot water to more than two locations at one time. This makes them best suited for small dwellings, or for people willing to install two tankless heaters in their home.
Solar Hot Water Heaters
Solar hot water heaters are composed of solar collectors and storage tanks for hot water. They work in almost any climate, and both passive and active heaters are available. However, you will probably need to install a back-up system for cloudy days to ensure you always have hot water. Some solar hot water heaters are sold with a back-up system already in place.
Geothermal Hot Water Heaters
Geothermal hot water heaters circulate water into the ground, taking advantage of the constant temperature of the earth to heat the water. Geothermal hot water heaters are probably the most energy efficient option, but you seldom see them in residences. This is due to their high installation costs. If you leave in a warm climate, you may have seen a system similar to geothermal hot water heaters: the convection hot water heater. This system circulates water through many feet of pipe outside of the home, taking advantage of the heat exchange.