The cost of heating water depends on several factors, including climate, plumbing, appliance efficiency, and daily habits. Understanding the factors that influence hot water costs can help you identify the most effective opportunities to reduce both energy use and utility expenses.
The type of water heater and the fuel it uses have the greatest impact on annual operating costs. Conventional storage water heaters, heat pump water heaters, and tankless water heaters all heat water differently and operate at different levels of efficiency.
Likewise, electricity, natural gas, propane, and fuel oil all have different fuel costs, causing the annual cost of heating the same amount of water to vary considerably.
The temperature of the incoming groundwater also affects water-heating costs. Before water reaches the desired temperature, the water heater must first raise it from the temperature supplied by the local water system.
In colder climates, groundwater often enters the home at temperatures between 40°F and 50°F. In warmer climates, groundwater may already be 65°F to 75°F. Because colder water requires more energy to heat, households in colder regions generally spend more on water heating than households using the same amount of hot water in warmer climates.
Hot water begins losing heat as soon as it leaves the water heater. Long plumbing lines and uninsulated hot water pipes allow heat to escape before the water reaches the faucet or appliance.
As a result, occupants may need to let the faucet run for a long time while waiting for hot water to arrive, wasting both water and the energy used to heat it. Homes with shorter plumbing runs or insulated hot water pipes typically lose less heat and deliver hot water more efficiently.
Additionally, water heater tanks that are poorly insulated result in more standby losses, and therefore, more energy consumption.
The efficiency of showers, faucets, washing machines, and dishwashers directly affects how much hot water a household uses.
For example, a low-flow showerhead uses substantially less hot water than a standard showerhead, and an efficient front-load washing machine typically uses much less hot water per load than an older top-load model. Because less hot water is needed, the water heater uses less energy to meet household hot water demand.
Household behavior also has a significant impact on hot water costs. The frequency and duration of hot water use, preferred water temperatures, and the way occupants use showers, sinks, washing machines, and dishwashers all influence how much hot water must be heated each day.
Every water heater is programmed to maintain water at a selected temperature, known as the setpoint temperature. Higher setpoint temperatures require more energy because the water heater must raise the water to a higher temperature and work harder to replace heat lost from the storage tank and plumbing.
Many manufacturers set water heaters to approximately 140°F by default, while the US Department of Energy recommends 120°F for many households. Lowering the setpoint, when appropriate, can reduce standby heat losses and lower energy consumption while still providing adequate hot water for most daily activities.