Your water heater accounts for a significant portion of your household’s energy usage. An inefficient system can lead to unnecessarily high costs, so it’s important to know when should you replace a water heater. Choosing the right type of water heater and making small daily-use adjustments can improve efficiency and lower costs. Regular maintenance is crucial for optimal performance and preventing costly breakdowns. Knowing when to upgrade to a more energy-efficient model can make a lasting difference in savings and sustainability.
How Your Water Heater Affects Energy Costs
Your water heater is one of the largest energy-consuming appliances in your home. Traditional tank water heaters continuously work to heat water and maintain its temperature even when you’re not using hot water. This can contribute to significant energy waste, especially if your heater is old or inefficient. The size and capacity of your water heater impact energy usage. An undersized unit may struggle to keep up with demand, while an oversized unit may heat more water than necessary.
Because of their lower insulation quality and outdated heating elements, older water heaters use more energy to produce the same amount of hot water. Sediment buildup inside the tank makes it harder for the heating element to transfer heat effectively. The type of energy source your water heater uses also influences operating costs, as fuel prices and efficiency levels vary.
Choosing an Energy-Efficient Water Heater
One of the most important considerations when you choose a new water heater is its energy efficiency. Traditional storage water heaters and tankless models differ significantly in how they use energy. Storage water heaters keep a large tank of water heated at all times. While newer models have improved insulation to reduce heat loss, they still experience standby energy consumption that can drive up utility bills.
By contrast, tankless water heaters heat water only when it’s needed. This eliminates standby losses, making them a more energy-efficient choice for many households. However, they require a higher up-front investment and may have limitations if multiple appliances require hot water simultaneously.
Another key factor in choosing an efficient water heater is looking for an ENERGY STAR-certified model. Energy Star-rated water heaters meet strict efficiency standards set by the U.S. Environmental Protection Agency (EPA) and can significantly reduce energy usage compared to standard models. These units often include advanced technology such as better insulation, heat pump functionality, or high-efficiency burners that minimize energy waste. Choose a water heater with an ENERGY STAR rating, whether it’s a tankless or traditional model.
Simple Adjustments to Improve Efficiency
To improve efficiency, take the following steps:
1. Lower the Thermostat
Many water heaters are set to 140°F (60°C) by default, but lowering it to 120°F (49°C) can significantly reduce energy consumption without sacrificing comfort. A lower temperature means your heater doesn’t have to work as hard to maintain hot water. This can result in noticeable savings on your energy bill. Turning the temperature down also reduces the risk of scalding and minimizes mineral buildup inside the tank. Even a small change of 10°F can result in energy savings of up to 5% on water heating costs.
2. Insulate the Tank
If you have an older traditional storage water heater, insulating the tank can help reduce heat loss and improve efficiency, especially if the water heater is in the garage or in an unheated space Older water heaters lose heat through their walls and force the appliance to work harder to maintain the water’s heat. A water heater insulation blanket is a cost-effective solution that can reduce heat loss by 25%–45% for energy savings of 7%–16%. Insulate the first few feet of hot water pipes to prevent heat from escaping as water travels through your plumbing system.
3. Use a Timer
Install a water heater timer if your family primarily uses water in the morning or evening. A timer allows you to schedule when your water heater operates. This is especially useful for electric water heaters, as you can program them to shut off during low-demand hours to reduce unnecessary energy usage. Timers are a simple and affordable upgrade that can help cut energy costs, particularly for those looking to limit consumption during peak periods when electricity costs more.
Routine Maintenance Tips for Better Performance
Hiring a water heater installer to also help with regular maintenance keeps your water heater running efficiently and extends its lifespan. Over time, sediment buildup, worn-out components, and unchecked leaks can reduce performance and increase energy consumption. Simple maintenance tasks can prevent costly repairs and help your water heater to operate at peak efficiency.
Key water heater maintenance tasks to perform include these:
- Flush the tank annually – Draining and flushing the tank once a year removes sediment buildup and enables the heating element to function efficiently.
- Check the anode rod – Inspect the anode rod every few years and replace it if it’s heavily corroded.
- Test the pressure relief valve – This safety feature releases excess pressure to prevent tank explosions.
- Inspect for leaks and rust – Regularly check for signs of moisture or corrosion around the tank and connections.
- Adjust the thermostat – Keeping the thermostat at 120°F helps prevent overheating and reduces energy waste.
- Insulate the tank and pipes – Wrapping the tank and inlet and outlet water pipes with insulation reduces heat loss and improves efficiency.
Scheduling maintenance with your plumber at least once a year will keep your water heater in good condition and help to keep your energy costs under control.
When to Upgrade: Signs Your Water Heater Is Costing You More
When should you replace a water heater? While regular maintenance can extend the lifespan of your appliance, an aging or inefficient water heater can quietly drain your wallet through increased utility bills and frequent repairs. If your water heater struggles to keep up with your household’s needs or shows signs of wear, upgrading to a more efficient model could save you money in the long run.
The following signs indicate it’s time for a replacement:
- Rising energy bills without a change in usage
- A water heater that’s more than 15 years old
- Running out of hot water frequently
- Popping or rumbling sounds
- Visible leaks or rust
- Frequent repairs
Upgrading to a modern, energy-efficient water heater with the help of a professional hot water heater installer can reduce energy consumption, lower utility costs and provide hot water more consistently. Recognizing the signs of an inefficient appliance early can help you plan for a replacement before it fails unexpectedly.
A Plumbing Upgrade Worth Considering
Upgrading to a more efficient water heater and making small adjustments to improve its performance can lead to significant energy savings over time. When you understand how your water heater impacts your energy costs, you can make a more informed choice when you choose a new model. You can also take small steps to improve your water heater’s efficiency and lower your heating bills. Properly maintaining your water heater can extend its lifespan and reduce your energy costs. These steps can help you enjoy a steady supply of hot water while keeping your home’s energy consumption as low as possible.
