A water heater is one of the highest energy consuming appliances in any US home. In order to be smart at what you buy, it’s important to understand the many factors that affect the cost and operational requirements of a water heater. An energy star water heater is one of the smartest buys because it drastically reduces you utility bills.

Determining the First Hour Rating

However, in order to work out which energy star rated water heater you should buy, you first need to estimate the amount of hot water your family requires at the peak hour. This is known as “First Hour Rating.”

“First Hour Rating” Chart

Your home has:
Nos of bathrooms? 1 to 1.5 2 to 2.5 3 to 3.5
Nos of bedrooms 1 – 2 – 3 2 – 3 – 4 – 5 3 – 4 – 5
Your First Hour Rating 43 – 60 – 60 60 – 70 – 72 – 90 72 – 82 – 90

Decoding The Energy Guide

Now that you have worked out the first hour rating, you already know the amount of hot water you family needs at the peak hour and this can help you determine the size of the water heater you should purchase.

When you are out shopping for a water heater, look at the following information, which comes as part of the EnergyGuide.

  • The EnergyGuide – a large, yellow-colored sticker that appears on all home appliances like energy star rated water heaters. The guide compares the approximate operating costs on a annual basis for various water heating units using the set criteria for every model tested. This helps you determine, which units will help you save the most money.
  • First Hour Rating – should be close to your required capacity. For example if the FHR is 65 on a particular water heater, it means that it has a capacity of 65 gallons. Remember, not to go by the sheer size of a storage tank. Since gas water heaters work faster at heating water than electric units, they tend to produce more hot water on an hourly basis than their counterparts.

FACT: A gas storage water heater with a capacity of 40 gallons can produce more hot water in an hour’s time than an electric unit with capacity of 65 gallons.

  • Yearly savings – On the EnergyGuide you will see a figure mentioned in dollars. That’s the approximate cost of energy you would require to operate that heating unit per annum. The bar below this figure displays the comparison of yearly costs based on water heaters from least to most expensive. Use this information to compare and shop for the best energy star water heater.

Understanding The Energy Factor

The Energy Factor is very important for energy star rated water heaters. The EF is a number written in decimal points on a different tag, but next to the EnergyGuide label. Gas water heating units have an EF between 0.5 – 0.7, while 0.75 – 0.95 is the EF for electric water heaters.

FACT: The higher the EF number on a water heater, the more energy efficient it will be.

While earlier on, most EF figures prove that electric hot water heaters are better than gas ones because of the loss of energy through the exhaust vent; the new breed of gas water heaters have better combustion efficiency meaning that less energy is lost through the vent pipe, therefore using less gas to produce hot water and improving efficiency.

How Is The Energy Star Label Given To A Water Heater?

For those of you who didn’t know, energy star is a trusted method for calculating the energy efficiency of a water heater or any other appliance by the government. This rating helps you to save money as well as protect your environment.

The Energy Star Label Checks For

  • Green house gas emissions reduction ability of a water heater
  • Efficiency of energy use
  • Categorizing units based on energy efficient to help consumers look and buy cost saving, feature-driven water heaters.

Requirements Of An Energy Star Water Heater

The US EPA, (US Environmental protection Agency) has set forth the below specifications to give the Energy Star rating to a water heater:

  • Significant contribution towards energy saving across the country
  • Must perform according to consumer demand as well as establish higher energy efficiency
  • If the energy star water heater costs more than its traditional and less energy efficient counterpart, then it will facilitate the consumers to recover the initial investment through savings on electricity bill with a specific time period.
  • Units can achieve energy efficiency through easily available and non-proprietary technologies
  • The unit’s energy efficiency can be measured and proven with proper testing

5 Types Of Energy Star Water Heaters

  • Gas storage water heater with high efficiency due to better insulation
  • Gas condensing hot water heaters that are more energy efficient because they capture heat that escapes through the flue
  • Whole house gas tankless energy star water heater that heats water when required
  • Solar water heaters and
  • Heat pump water heaters that transfer heat from the atmosphere straight into the water using electricity rather than using it to heat water

Spend Your Money Wisely

Buying an energy star water heater means your water heater comes with a high energy factor. The initial cost maybe high, but the savings at the end of a year could be well worth the extra spending. Here’s an example: Let’s assume there are two gas water heating units – one with an EF of 0.57 and a price tag of $135 and another with an EF of 0.61 with a price tag of $150. While you may spend $15 more on the one with the higher EF at the start, you also save $11/year on NG meaning that you save your initial investment of $15 within the first 14-15 months of use. So, it’s typically a win-win situation.

Comparison of Operating Costs Of Water Heaters With Different Energy Factors

The below stats are based on energy saved by a family of 4 members.

Energy Factor Energy Cost Each Year Savings Over Life of Appliance
0.53 $177 $0
0.57 $166 $143
0.61 $155 $286
0.65 $144 $429

FACT: Spending on a more energy efficient, energy star water heater means significant savings over the life-span of that unit.

Top 2-Energy Efficient, Energy Star Water Heater Models

Rinnai R75LSiN Tankless Natural Gas Water Heater

Price: $1,137.00


  • Highly energy efficient
  • Energy star water heater
  • Commercial grade heat exchanger
  • Federal Tax Credit


  • Endless hot water supply
  • Pre-set temperatures
  • Supply water to 2-3 bathrooms simultaneously
  • 7.5 gallons of hot water/minute
  • Vent through chimney or roof

Bradford White MI30T6FCX-337 30 Gallon Propane Water Heater

Price: $599.00


  • Thermal switch reset
  • Advanced ScreenLok Technology
  • Flame Arrestor
  • Hydrojet Total Performance System
  • Energy star water heater


  • Available in Natural Gas
  • Residential water heater
  • More value for money
  • Use a draft diverter
  • Atmospherically vented

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