Heating water accounts for around 18 percent of your home’s energy bill, according to the U.S. Department of Energy (DOE). To help Americans save money and conserve energy, DOE requires residential water heaters to reach new levels of energy efficiency, starting April 16, 2015.

NAECA

The National Appliance Energy Conservation Act (NAECA), approved by Congress and administered by DOE, provides guidance on improved energy efficiency in water heaters, with goals of reducing our country’s use of fossil fuels, increasing energy conservation, and saving homeowners money.

Energy Factor

Water heaters are measured by their Energy Factor (EF). EF is the ratio of useful energy output from your water heater to the total amount of energy that went into the water heater. The higher the EF, the more efficiently your water heater converts gas, oil or electricity into usable heat to supply your home with hot water.

Changes in Your Home?

Most American homes do not use 55-gallon storage water heaters. Most residential water heaters fit into the under-50 gallon category. Increases in tank water heater efficiency in these smaller units will yield modest savings, with design changes increasing their physical size:

• Gas-fired—from EF 0.59 to EF 0.62, an increase in efficiency of approximately 5 percent
• Oil-fired—from EF 0.53 to EF 0.62, an increase in efficiency of roughly 16 percent
• Electric—from EF 0.90 to EF 0.95, an increase in efficiency of around 5 percent

55 and Up

The most dramatic changes come with models holding more than 55 gallons. Not only will these be more efficient, but their design and space requirements will change. Expect new units to be much taller than existing models:

• Electric, over 55 gallons—hybrid electric heat pump design
• Gas-fired, over 55 gallons—condensing water heater design

Tanks a Lot

Tankless water heaters, already energy efficient, will also improve for natural gas users:

• Gas-fired instantaneous units—from EF 0.62 to 0.82, a major energy efficiency increase of more than 32 percent
• Electric instantaneous units—unchanged at EF 0.92

Time for a Change? 

Most water heaters last between eight and 15 years. If you are considering a new unit, check out tankless options that provide the greatest gains in energy efficiency. Due to added insulation and design changes, all new storage water heaters will require more space. This may trigger pipe retrofitting. You will also pay more for your water heater regardless of design, due to manufacturing changes necessitated by the new law.