There are several technology upgrades that can reduce hot water costs by either decreasing the amount of hot water a household uses or improving the efficiency of the water heating system. In general, it is best to reduce hot water demand before upgrading the water heater itself. By using less hot water in the first place, households may be able to install a smaller, less expensive water heater to meet their hot water demand.
Reducing hot water demand is often the most cost-effective way to lower water-heating costs. Every gallon of hot water that is not used is a gallon that does not need to be heated.
One of the easiest ways to reduce hot water demand is to install more efficient plumbing fixtures and appliances. These include low-flow showerheads, low-flow sink faucets, high-efficiency dishwashers, and high-efficiency front-load washing machines. When shopping for new products, look for models that have been independently certified for water or energy efficiency in your region.
Once hot water demand has been reduced as much as practical, upgrading the water heater itself can provide additional savings.
An electric heat pump water heater is typically the most energy-efficient option, typically using less than 50% of what a conventional electric water heater. Although heat pump water heaters generally have a higher purchase price than conventional electric models, their much lower operating costs often offset the additional upfront investment over time. Many utility companies and government agencies also offer rebates or tax incentives that further reduce installation costs.
Storage water heaters continuously lose heat through the walls of the storage tank, even when no hot water is being used. These standby losses cause the water heater to cycle periodically to maintain the set water temperature.
Installing an insulated water heater blanket can reduce standby heat losses and lower energy consumption. Many newer water heaters already include high levels of factory-installed insulation, making additional insulation unnecessary. However, if the outside of the tank feels warm or hot to the touch, adding a water heater blanket may help reduce standby heat losses. Before installing an insulation blanket, homeowners should consult the manufacturer's recommendations.
Hot water also loses heat as it travels through the home's plumbing. Insulating hot water pipes reduces these losses by helping water remain warm as it moves from the water heater to showers, sinks, and appliances.
Pipe insulation also reduces the amount of time occupants spend waiting for hot water to reach the faucet. This reduces both water waste and the amount of energy lost as hot water cools inside the plumbing system.