Tips on Buying High Efficiency Electric Hot Water Heaters

Electric water heaters are most commonly used where gas service is unavailable locally or where topography or other factors dictate that a gas supply line cannot be economically run to the home from the main gas line. While high efficiency electric heaters convert electric current into heat with less energy loss than gas combustion, the higher cost of electricity versus natural gas in most areas means that a high efficiency electric heater will still cost more to operate. Choosing the right high efficiency electric water heater for your needs involves comparing several factors.

Energy Factor

The Energy Factor (EF) rating of a water heater expresses the efficiency of the heater in converting electrical energy to hot water. The higher the EF, the more efficient the heater. Standard efficiency electric water heaters may have EF ratings as low as .75. High efficiency water heaters are those with EF ratings of .90 or above. For storage tank water heaters, .95 is generally the upper limit. EF is influenced by how efficiently the heater transfers heat energy to the water, the amount of heat lost from the storage tank as the reservoir of heated water waits to be used and the heat loss as water circulates through the internal passages in the water heater and the inlet/outlet pipes.


An electric water heater’s capacity should match your home’s demand for hot water. The basis of comparison for heaters that utilize a conventional storage tank is the First Hour rating. Usually found on the yellow EnergyGuide sticker attached to a heater, the First Hour rating represents the gallons of hot water a heater can produce in one hour at peak demand, beginning with a tank full of water heated to the thermostat temperature setting. If the heater’s First Hour rating is less than your household peak demand, you may end up taking a cold shower if you're the last one in line. It's usually best to select a heater with a First Hour rating about 10 percent above your peak household demand to allow for future increase in the number of occupants or other changes that would increase your consumption of hot water.

Tankless Electric Heaters

Electric water heaters are also available as tankless, demand-type models. These units use electric coils to instantaneously heat the flow of water on-demand, as you use it, and do not incorporate a tank to store hot water. Tankless heaters offer greater efficiency because there is no heat loss due to water cooling in the storage tank. However, a tankless heater must be able to heat the water as fast as you can use it or you will experience water that falls below the desired temperature. The tankless heater’s capacity to meet that demand is expressed by a specification called temperature rise — the amount of heat in degrees it can generate at a given gallons-per-hour (gph) flow rate. If the temperature of cold water entering the heater is 50 degrees and the desired hot water temperature is 120 degrees, then the heater must generate at least a 70 degree temperature rise at a gph flow rate sufficient to meet the demands of the household.

Hybrid Heaters

Hybrid water heaters utilize a heat pump to heat water along with electrical resistance to provide additional heat. A heat pump extracts latent heat from the surrounding air and transfers it to the water in the tank via a heat exchanger. Because the heat pump alone may not be able to generate sufficient heat to bring the water to the usual standard of 120 degrees, electrical resistance coils inside the tank activate to provide the additional temperature boost. Because of the efficiency of the heat pump, hybrid units typically use about 60 percent less electricity than all-electric water heaters and have an EF rating above 2.00. However, a hybrid unit is significantly taller than a standard water heater and many not fit in an existing water heater closet. In addition, the heat pump exhausts large amounts of cold air which must be vented from the house.