If you’ve ever winced at your energy bill and wondered where all that money is going, your water heater might be the culprit. It’s one of those appliances that works around the clock without much fanfare—until you get the bill. The good news? Upgrading to an energy efficient water heater could put some serious savings back in your pocket. Let’s break down exactly how much you could save and whether making the switch is worth it for your home.
What Makes a Water Heater “Energy Efficient”?
Not all water heaters are created equal. Traditional tank water heaters keep a large supply of water heated at all times—whether you’re using it or not. That constant reheating is called “standby heat loss,” and it’s essentially money going down the drain.
Energy efficient water heaters are designed to cut down on that waste. The most popular options include:
- Tankless water heaters – Also called on-demand water heaters, these units only heat water when you need it. No tank, no standby heat loss, no wasted energy.
- Heat pump water heaters – These pull heat from the surrounding air to warm your water rather than generating heat directly. They use significantly less electricity than conventional electric models.
- Solar water heaters – These use the sun’s energy to heat water, often paired with a backup system for cloudy days.
- High-efficiency tank water heaters – These are traditional tank models built with better insulation and more efficient burners or heating elements to reduce energy use.
The Real Numbers: How Much Can You Save?
Here’s where things get interesting. According to the U.S. Department of Energy, water heating accounts for about 18% of your home’s energy use—making it the second largest energy expense after heating and cooling.
Switching to a tankless water heater can reduce your water heating costs by 24–34% if your household uses 41 gallons or less of hot water per day. For larger households that use around 86 gallons per day, the savings are closer to 8–14%. Over the lifetime of the unit, that adds up to hundreds of dollars.
Heat pump water heaters take things even further. They can be two to three times more energy efficient than conventional electric resistance water heaters, potentially saving you $300–$500 per year depending on your household size and current energy rates.
For a Louisiana household, where summer heat is no stranger, a heat pump water heater can be especially effective since it pulls ambient heat from the air—and there’s plenty of that to go around down here.
The Upfront Cost vs. Long-Term Savings
Let’s be real: energy efficient water heaters typically cost more upfront than standard models. A traditional tank water heater might run you $2,400, while a tankless unit can be $3600 or more for the unit alone.
But here’s the thing—most energy efficient models pay for themselves over time. A tankless water heater with a lifespan of 20+ years (compared to 10–12 years for a traditional tank) often ends up being the more cost-effective option in the long run.
Plus, there are federal tax credits available for qualifying energy efficient water heater installations.
Other Benefits Beyond the Savings
Saving money is great, but energy efficient water heaters bring a few other perks to the table:
Continuous hot water. With a tankless water heater, hot water is available continuously, meaning water is heated as it flows through the unit rather than storing hot water. That does however mean the volume of hot water is a little slower than with a tank, so if you use a large volume of water all at once, it might not be enough. Speaking with an expert is the best way to know what you’d need.
More space. Tankless units mount on the wall and take up a fraction of the space a bulky tank requires. If you’re working with a smaller utility room or closet, that extra space is a win.
Longer lifespan. As mentioned, tankless and high-efficiency models tend to last significantly longer than traditional tanks. Fewer replacements means more savings over time.
Reduced risk of water damage. No tank means no risk of a tank rupturing and flooding your home. Traditional water heater tank failures are one of the top causes of residential water damage—something nobody wants to deal with.
Signs It’s Time to Consider an Upgrade
Not sure if your current water heater is costing you more than it should? Here are a few signs it might be time to make a change:
- Your water heater is 10 years old or older
- You’re running out of hot water faster than you used to
- Your energy bills have been creeping up without explanation
- You notice rust-colored water or a metallic smell from your hot tap
- You’ve had to schedule repairs more than once in the past year
If any of these sound familiar, it’s worth having a professional take a look. A quick inspection can tell you whether a repair will do the trick or whether an upgrade to an energy efficient model makes more financial sense.
Is an Energy Efficient Water Heater Right for Your Home?
The honest answer is: it depends. Tankless water heaters work best for smaller households or homes where hot water demand is spread out throughout the day. Heat pump models are excellent for homes in warmer climates—which Louisiana certainly qualifies as—but they need adequate space and ventilation to operate efficiently.
The best way to figure out which option makes sense for your home is to talk to a plumbing professional who can assess your current setup, your household’s hot water usage, and your budget.
Let Goodbee Plumbing Help You Make the Switch
At Goodbee Plumbing, we’ve been helping homeowners across the Northshore and greater New Orleans area find the right water heater solutions for over 25 years. Whether you’re in Mandeville, Metairie, Hammond, Covington, or anywhere in between, our team can walk you through your options and help you find an energy efficient water heater that fits your needs and your budget.
We offer water heater services like repairs, replacements, and new installations—including tankless models—with the honest pricing and quality workmanship Goodbee is known for.
Ready to start saving? Contact us to schedule your service today.