The energy efficiency of a storage water heater is indicated by its energy factor (EF), an overall efficiency based on the use of 64 gallons of hot water per day. The first national appliance efficiency standards for water heaters took effect in 1990. New standards, which took effect in January 2004, increased the minimum efficiency levels of water heaters.
The most efficient gas-fired storage water heaters have energy factors ranging from 0.60 to 0.65, corresponding to estimated gas use below 250 therms/year. Condensing water heaters have energy factors as high as 0.86. The most efficient electric storage water heaters have energy factors ranging between 0.93 and 0.95, resulting in estimated annual energy use below 4,725 kWh/year. There is little difference between the most efficient electric resistance storage water heaters and the minimum efficiency standard. Fortunately, heat pump water heaters using less than half as much electricity as conventional electric resistance water heaters are becoming commercially available. If you use electricity for water heating, consider installing a heat pump water heater. Otherwise, look for the most efficient electric resistance unit in your size range.
With demand water heaters, the manufacturers provide different specifications: the energy input (Btu/hour for gas, kilowatts [kW] for electric); the temperature rise achievable at the rated flow; the flow rate at the listed temperature rise; and so on. In comparing different models, be aware that you aren’t always looking at direct comparisons, especially with temperature rise and flow rate. For example, while one model might list the flow rate at a 100°F temperature rise, another might list the flow rate at 70°. Until there are industry-standard ratings for temperature rise and flow rates, it will be difficult to compare the performance of products from different companies. Some companies are beginning to publish energy factor ratings for these products and this information should make for easier comparisons.