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Water Heater Energy Factor

When you start shopping for a replacement water heater, your foremost indicator in selecting a new water heater is the Energy Factor (EF).

Energy Factor is an annual measure of the useful energy coming out of your water heater, divided by the amount of energy going in to the water heater to heat the water.

A lot of tech talk for something that is basically the annual efficiency of the water heater. The greater the Energy Factor, the more efficient the water heater and the more energy and money it will save.

The energy factor (EF) indicates a water heater's overall energy efficiency based on the amount of hot water produced per unit of fuel consumed over a typical day. This includes the following:

Energy Factor EnergyGuide

Water heaters listed in the energy factor ratings include:

  • Recovery efficiency – how efficiently the heat from the energy source is transferred to the water

  • Standby losses – the percentage of heat loss per hour from the stored water compared to the heat content of the water (water heaters with storage tanks)

  • Cycling losses – the loss of heat as the water circulates through a water heater tank, and/or inlet and outlet pipes.

Therefore, energy efficiency of a water heater is measured by its energy factor. This number, shown on the Energy Guide label, shows the unit's overall operating costs, taking into account the burner and heat exchanger efficiencies, as well as heat losses from the water tank. Almost all home appliances, including water heaters, dishwashers and clothes washers, display the prominent yellow-and-black Energy Guide. The Energy Guide can be a valuable tool. It compares the average yearly operating costs of different water heaters, using the same criteria for all models tested. It lets you see which one would probably cost you less to run.


The higher the energy factor, the better. Gas water heaters have energy factors between 0.5 to around 0.7. Electric models range from 0.75 to 0.95. By varying the tank insulation, burner design, and a few other features, manufacturers continue to make residential heaters more energy efficient. However, higher energy factor values don't always mean lower annual operating costs, especially when you compare fuel sources.

Electric water heaters have higher energy factors. Does that mean that electric water heaters are more efficient? Yes, electric models do make better use of energy, since gas water heaters lose some of their energy up the vent. But since electrical energy usually costs three times more than gas , it's still cheaper to use natural gas, if you have a choice.


If you’re going to buy an electric water heater, we suggest you look for one with an Energy Factor equal to .93 or greater. This represents a 5 to 10 percent savings compared to a standard efficiency electric water heater. This higher efficiency is achieved by better tank insulation to reduce standby losses, and a device to block cooler water from adjacent water pipes from sinking into the tank where it needs to be reheated. The savings pay for the slightly higher costs of these heaters within a year or two.


A standard efficiency 40-gallon gas water heater typically has an Energy Factor of about .55, due to inefficiencies of combustion, a central flue carrying heat away with combustion exhaust, and a continuous gas pilot light, as well as standby losses through insulation and thermo-siphoning. We recommend gas water heaters with an Energy Factor of .62 or greater. This represents a 10 percent savings compared to a standard efficiency gas water heater. In addition to reducing standby losses with added insulation and anti-thermo-siphon device (heat traps), these improved efficiencies can be achieved for very little added cost by using electronic ignition instead of a pilot light, having automatic draft dampers, and reducing losses out the flue by recovering more of the heat first.


A new generation of residential water heaters is being produced with fully-submerged internal coil heat exchangers. In these water heaters the burner sits inside the combustion chamber completely surrounded by water and the flue gases are used for additional heat transfer. This design greatly improves heat transfer surface compared to standard gas flue tubes. This design also helps keep hot combustion gases in tank longer to lengthen the heat transfer cycle. The design also controls the build up of harmful sediment on the heat exchanger, prolonging the life of the heater. These units boast 90+% thermal efficiencies . Thermal efficiency should not be confused with energy factors as they are different ways of determining a water heaters overall efficiency. Most of these new heaters are not rated with actual energy factors as they are considered EPACT heaters and not tested by GAMA. For more information on high efficiency residential water heaters please refer to the manufacturers websites. A.O. Smith Vertex water heaters and State Industries Premier Power Vent water heaters are both rated with 90+% Thermal Efficiency.


A unit with a higher energy factor may cost more initially, but the energy savings may more than make up for the higher sticker price. Consider the price difference and how long it would take to recover the money through energy savings.

  • Electric storage water heaters with energy input ratings of 12 kWh or less and with a storage capacity of not less than 20 gallons nor more than 120 gallons

  • Gas storage water heaters with energy input ratings of 75,000 BTU/Hr. or less and with a storage capacity of not less than 20 gallons nor more than 100 gallons

  • Gas instantaneous water heaters with input ratings greater than 50,000 BTU/Hr. but les than 200,000 BTU/Hr.

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