How to Improve the Efficiency of Hot Water Heaters


Water Heaters Efficiency

Did you know that in an average American household up to 40% of the energy bill is caused by by water heaters that supply your home of hot water? In this Plumbing How To we will show you that the type of hot water heating system you choose for your hot water supply will have a big impact on your energy costs, but there are also some simple things you can do improve the efficiency of hot water heaters and that will reduce the running costs of your existing hot water system.

Water Heating Options

How to reduce the running costs of hot water systems?

The type and usage pattern of your hot water system can have a substantial impact on the running costs and also the life span of the hot water system. Running your hot water system in a more efficient way can be of financial benefit as well as being of benefit to the environment.

Bathroom Improvements

  • The bathroom shower is the largest user of household hot water. Installing efficient showerheads, can save you up to $100 a year on your water and energy bills.
  • Consider taking shorter showers – shower timers make it easy to keep track – and choose a shower over a bath to save water.

Improve the water heaters efficiency

The thermostat on the water heater should be set to deliver the lowest acceptable temperature. For a storage water heater, this is a minimum of 140 ºF. This will lower your running costs and extend your tank's life.

  • Do not oversize the hot water unit that you use for your household.
  • Peak-rate electric storage systems should be switched off whenever possible. They can be very expensive to run - up to 3.5 times more than off-peak electric or natural gas systems.
  • Turn your hot water unit off if you're going away for an extended period. Some units have a 'vacation' setting to make this easier.
  • Heat losses from the tank and pipe work can amount for as much as 60% of your hot water bill. Add extra insulation to your hot water storage tank to reduce heat losses, particularly if it’s in a cold or exposed position such as the south side of your home. Foil-backed insulation blankets wrapped around the tank are most suitable.
  • Insulate pipes leading out from your hot water system, especially for the first two metres and any exposed piping that will be subjected to cold conditions outside.
  • Install the water heater as close as possible to the kitchen, bathroom and laundry. These are the main hot water draw-off points around the home.
  • Keep the hot water system sheltered. This will help reduce heat losses from hot weater storage tanks, and will protect any pilot lights from draughts.


  • A leaking pressure relief valve (on the side of the hot water tank) can waste hundreds of litres of hot water. Check it regularly.
  • Look out for undetected leaks which can be extremely wasteful and costly. A way to check for leaks is to read the water meter late at night then again early the next morning to see if water was leaking while everyone was asleep.

Choosing the right water heating system.

If you are considering a new hot water system, or you just want to save energy, then choosing the right system for your home can help you reduce your energy bill. As well as giving you a lower running cost, an efficient system will help cut your household carbon footprint and save hundreds of dollars a year.

Solar Powered Water Heaters

  • A solar water heater uses the sun to heat your water. If used correctly, much of your hot water will be supplied for free.
  • Solar water heaters are supplied with booster heaters, usually electric or gas, so even on grey days you won’t run out of hot water. A gas-boosted solar system is the most efficient water heater available.
  • A solar hot water system should reduce your water heating bills by about 70%, with the system paying for itself in 5 to 10 years, depending on your household's water consumption.

Gas Powered Water Heaters

  •  Natural gas water heaters produce around two-thirds less greenhouse gas emissions than electric water heaters and can save you hundreds of dollars in energy bills compared to a peak-rate electric system.
  • LPG systems are also an environmentally friendly choice; however running costs average around one and a half to three times the price of natural gas or off-peak electricity.

Electric Water Heaters

  • An Electric water heater produces 3 to 4 times the greenhouse gas emissions of other types of systems.
  • On off-peak tariff, the running costs are similar to natural gas.

Heat Pumps

  •  A heat pump is an efficient form of water heating which uses around 70% less electricity than other electric water heaters. When used in conjunction with a timer and the off-peak tariff, running costs are even lower.
  • Heat pumps extract heat from the atmosphere using a refrigerant gas and a compressor, much the same way as heat is extracted from your refrigerator, and uses it to heat water stored in a tank at ground level.

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