How to buy the right sized Heater and save money too ... part 1 Energy Factor
The two really important factors to consider are Energy Factor and First Hour Rating. These two terms are explained elsewhere and you can go there by clicking the relevant links below ..
hot water heaters energy factors
first hour rating for hot water heaters
The cost of the energy source is also critical bearing in mind that electricity generally is most expensive but in this section we will consider gas fired hot water heaters only.
1. Energy factor ... there are significant differences in terms of energy factors between gas tankless (also called instant or on demand hot water heaters) and gas storage heaters. Some gas hot water heaters are able to burn either natural gas or propane but generally they are designed to run one or the other gaseous fuel.
The energy factor is important and is used to calculate the amount of energy used in a year as follows where you must use the cost of gas used as $ per therm (1 therm is = 100,000 BTU). Average US cost per therm is $0.6 as assumed here.
From the table below you can estimate your annual cost taking into account your approximate water consumption per day for every day of the year and you can see in the red section the impact that Energy factor er year. For example take the purple line .... and compare to the bottom red line and you will see that if you use 65 gallons per day of hot water (77 degrees above cold water inlet) using an efficient .85 Energy factor unit that you will save (151.40-115.78 = $35.62) per year. Over a period of 10 years this will come to $356 saved
| Water per day in gallons | 50 | 55 | 60 | 65 | 70 |
| Annual cost 100% Energy factor | $ 70.29 | $ 77.32 | $ 84.35 | $ 91.38 | $ 98.41 |
| Energy factors impact showing annual cost of gas for different flows and different Energy factors | |||||
| 0.45 | $ 156.21 | $ 171.83 | $ 187.45 | $203.07 | $218.69 |
| 0.5 | $ 140.59 | $ 154.65 | $ 168.70 | $182.76 | $196.82 |
| 0.55 | $ 127.81 | $ 140.59 | $ 153.37 | $166.15 | $178.93 |
| 0.6 | $ 117.16 | $ 128.87 | $ 140.59 | $152.30 | $164.02 |
| 0.65 | $ 108.14 | $ 118.96 | $ 129.77 | $140.59 | $151.40 |
| 0.7 | $ 100.42 | $ 110.46 | $ 120.50 | $130.54 | $140.59 |
| 0.75 | $ 93.72 | $ 103.10 | $ 112.47 | $121.84 | $131.21 |
| 0.8 | $ 87.87 | $ 96.65 | $ 105.44 | $114.23 | $123.01 |
| 0.85 | $ 82.70 | $ 90.97 | $ 99.24 | $107.51 | $115.78 |
Do take note that any percentage saving in Energy Factor has a lower percentage saving effect upon the bill you will pay .... this leads to what can be considered misleading advertising.
To give you an example for any hot water heater (tankless or storage) an Energy factor of 0.85 is 30.7% better than an Energy Factor unit of 0.65 but the cost saving is not 30.7%. In actual fact the cost saving is only 23.5% ($35.62 divided by $151.0)
This table below shows Energy factor difference between best and worst units for different types of tankless and storage tank hot water heaters. This table clearly shows that tankless hot water heaters are certainly more efficient than storage hot water heaters ... but do not forget that this is only one factor that will determine your final choice
| Type | Energy Factor Parameter | Energy Factor |
| Storage Propane Gas heater | MAX value | 0.65 |
| Storage Propane Gas heater | MIN value | 0.46 |
| Storage Propane Gas heater | AVG value | 0.56 |
| Storage Natural gas heater | MAX value | 0.65 |
| Storage Natural gas heater | MIN value | 0.46 |
| Storage Natural gas heater | AVG all values | 0.56 |
| Storage Dual gas heater | MAX value | 0.63 |
| Storage Dual gas heater | MIN value | 0.48 |
| Storage Dual gas heater | AVG value | 0.57 |
| Tankless Hot Water Heaters ... gas | MAX value | 0.85 |
| Tankless Hot Water Heaters ... gas | MIN value | 0.64 |
| Tankless Hot Water Heaters ... gas | AVG all values | 0.75 |
Energy Factor ... every hot water heater tankless or storage tank heater must be provided with a certified Energy Factor. This factor in simple terms means that if the Energy Factor is high then the annual cost of power to run the tanklless hot water heater or the storage heater will be lower than it would be for a low rated Energy Factor. Gas tankless water heaters Energy Factors typically range from 0.64 to 0.82
First Hour Rating ... this number refers to the amount of hot water the heater can supply per hour ... if a storage tank system is in use the assumption is that the tank is full of hot water at the start of the first hour.