What Is The Most Efficient Electric Water Heater

Electric water heaters are popular for their incredible efficiency and ease of use. Most of these units are 90% plus efficient, meaning that at least 90 percent of the heating energy is absorbed by the water, with only about 10% lost.

Concerning controls, most of today’s electric water heaters are equipped with digital controls, including LCD displays and touch controls.

This guide focuses on finding the most efficient electric water heater (considering the other qualities of a great water heater).

As you’ll find out, the heating systems come in a wide variety of options, from design styles to size and installation choices. Control and convenience features also vary significantly from one electric water heater to the next. It’s about finding a unit that best suits your needs.

Most Efficient Electric Water Heater Comparison Table

So, what makes electric water heaters efficient, what efficiency metrics should you look at, and what other factors should you consider when shopping for an efficient electric water heater?

What is an Electric Water heating System

what is the most energy efficient electric water heater

A common way to categorize water heaters is based on fuel type. What type of fuel does the heating system use?

The two most established options are electricity and gas. Solar water heaters are becoming increasingly common. But, solar water heaters aren’t yet at a level where they can rival electric and gas-powered water heaters. Gas models mostly run on natural gas or propane, while electric models run on an electrical current.

The electric water heater is plugged into a standard electrical outlet (or hardwired into the home’s wiring system), and electrical current passed through a heating element. The heating element’s electrical resistance produces heat absorbed by the water flowing through the heating system or stored in a tank somewhere.

Types of Electrical Water Heaters

There are two broad categories of electrical water heaters – storage tank heating systems and tankless heating systems.

Storage Tank Water Heaters

Storage tank hot water systems are the most common type of water heating systems. These systems comprise a tank whose inner lining is made from a protective material. The tanks’ exteriors are typically insulated (often with polyurethane) to minimize heat loss.

The heating systems also include a dip-tube through which water enters the tank, a shut-off valve that stops water from entering the tank, a heat-out pipe that carried hot water out of the tank, and a heating mechanism, usually heating elements.

Other heating systems components include a thermostat, drain valve, pressure relief valve, and sacrificial anode rod.

Essentially, water is heated inside the tank, with the thermostat keeping track of the water temperature. Once it reaches the desired temperature, it’s made available for use in the home. You turn on the connected fixtures, and hot water will come out.

Tankless (On-Demand) Water Heaters

On-demand or tankless water heaters feature a significantly different design, the biggest difference being the absence of the storage tank.

The idea of a tankless heater originated from the need to increase water heating efficiency. It was found that heating water in a tank and letting the water stand as it awaits use results in significant and avoidable energy losses (known as standby losses). Eliminating the tank and heating water “on-demand” substantially reduces the associated heating costs.

A tankless water heater uses a special appliance known as a heat exchanger to deliver that hot shower. A heat exchanger is a device that can transfer heat from one source to another. This heat exchanger is activated by incoming cold water when you turn on the shower/faucets.

Once activated, it transfers heat from the heating element into the cold water to the pre-set temperature. The hot water then flows to your faucets/shower.

Electric Water Heater Efficiency

 Efficiency is one of the biggest challenges with electric water heating. As may have noticed from the reviews, electric heaters consume a lot of electric power in a short duration. Even the smallest ones will consume 20KW+/hour.

Given that most states pay about $0.33/kWh, keeping a standard hot water system running for just one hour would cost you $6.6. Now, imagine the bill at the end of the month!

Investing in some efficiency can help bring costs down. Indeed, you can cut your electric water heating bills by more than half if you can pick out an efficient heating system and practice efficient use throughout the unit’s life.

Tankless Hot Water Heaters vs. Tank Storage Water Heaters

We’ve already seen the two main electric heater types – storage tank and tankless models. Tankless models are the more efficient of the two options.

However, that doesn’t mean that your options are limited to the standard tankless water heater. If you’d prefer a tank-type model, there are a few considerations that can help you identify an energy-efficient model. You can also consider hybrid systems and heat pumps.

In a nutshell, though, you’re guaranteed the highest energy savings if you opt for any of the following design models;

Tankless Water Heaters

In general, tankless heaters cut, significantly, the cost of heating water in the home. Some studies show that you can save as much as 35% by switching from a tank-style to a tankless water heater. The Energy Department also backs these heaters, saying that you stand to save $44/year.

What’s better, these heaters require very little maintenance and can last up to ten years longer than storage tank heaters. So, you don’t just save in reduced energy costs but also reduced maintenance and replacement costs.

However, it’s worth noting that tankless heaters cost up to 3x more than their tank-style equivalents. Regardless, you can recoup the extra costs within a few years.

Point-of-Use Tankless Heaters

There are two categories of tankless water heaters – whole-house and point-of-use. Whole-house tankless water heaters are the traditional “single” water heating systems that serve the entire house. They are typically located in the garage or basement and supply hot water to faucets, showers, dishwashers, etc. in the whole home.

Meanwhile, point-of-use tankless heating systems are heating systems dedicated to one area of the home, such as the shower (or two showers), dishwashers, etc.

Point-of-use water heaters are way more efficient than whole-house heating systems. Although you’re still guaranteed energy savings in the range of 30-50% when you switch to a whole-house heating system, point-of-use heating systems guarantee even more significant savings.

Cycling losses reduce the main reason for increased energy savings. Cycling losses refer to the heat losses that occur as water travels through the pipes. Point-of-use water heaters significantly reduce cycling losses by cutting the distance between the hot water source and exit points.

Hybrid Water Heaters (Heat Pumps)

Finally, hybrid water heaters are another excellent option when shopping for an energy-efficient hot water system. To understand how the heaters work, imagine a refrigerator working in reverse.

A refrigerator removes heat from an enclosed box and expels it to the surrounding air. Heats pumps work the opposite way by taking heat from the surrounding air and transferring it into an enclosed tank.

They are called hybrid heaters because they switch to standard electrical heating during high demand for hot water, using a heating element to heat water in an enclosed tank.

If you live in a warm area, the water in your rank will already be warm, meaning that very little heating is needed to raise it to the desired temperature. The result? Significant energy savings!

The heaters typically come with a control panel that allows you to choose from multiple heating modes, including efficiency/economy, auto/hybrid, electric/heater, and vacation/timer.

The auto/hybrid mode is the most popular. It combines the heat pumping process with standard electrical heating to maximize efficiency.

Things to Consider When Choosing the Most Energy Efficient Electric Water Heater

how to choose the most efficient water heater

There are endless factors you’ll want to consider when shopping for an energy-efficient electric water heater. For one, you need to consider the basic factors you’ll look for in any other electric water heating system.

After that, you then want to take a closer look at the energy-efficiency factors. Nonetheless, prioritize the following;

  • Heating capacity: The heating capacity of electric heaters is measured in kilowatts (KW). Many electric heaters are rated between 20-36KW (36KW is the maximum possible capacity for a single electric water heater). Sometimes you may find the units rated in British Thermal Units. Just remember that 1,000 BTU = 0.293kWh. (1KW = 3,412 BTU).
  • Your hot water needs: To make calculations easier, it’s recommended that you determine how much hot water you’d need at any given time. This means combining the total flow from the faucets, shower, and any other hot water exit points that may be run simultaneously at any given time.
  • Tank capacity: If you decide to buy a storage tank electric water heater, the tank capacity is vital as it determines how much hot water you can access at a go. The most straightforward way to select the right tank size is using the heater’s first-hour rating. The first-hour-rating is the amount of water (in gallons) the heater can supply per hour. Choose a first-hour-rating that’s close to your peak hot water needs in any given one-hour duration.
  • Flow rate: If you choose to buy a tankless heater, you don’t need to first-hour-rating. Instead, you need to know the tank’s flow rate. Your flow rate is how much water flows from your taps, showers, etc., per minute at peak operation. It’s measured in gallons. Once you’ve determined your ideal flow rate, choose a tankless heating system with a flow rate within 1-2 gallons of your needs.
  • Unified Energy Factor (UEF): Unified Energy Factor (UFE) is the proportion of energy drawn for heating purposes that contributes to the heating process. You subtract the energy lost in various forms from the total power drawn from the energy source (in this case, the home’s electrical system). Get the highest possible UEF.  
  • Energy Star certification: This is also very important. According to energystar.gov, a new Energy Star Certified electric water heater can save you up to $3,500 over the appliance’s lifetime. You can save even more in rebates incentives.

Electrical Water Heater Energy Saving Tips

After you’ve picked the right energy-efficient electric water heater, the next step is to use the appliance efficiently to reduce your energy bill further. We recommend the following;

  • Take short showers instead of baths: Baths use a lot of water, which would mean more heating. If you’re keen on saving energy, short showers are the answer.
  • Reduce your shower time: The longer you spend in the shower, the more hot water you use.
  • Lower the temperature on your water heater: It’s been observed that for every 10°F reduction, you could save between 3-4% of water heating costs.
  • Don’t let the water run: This is a mistake a lot of people make. For instance, you may leave the water running as you brush your teeth. This habit negates all the gains made in hot water saving.
  • Use cold water for most laundry loads: You don’t need to wash all your clothes with hot water. Many times, cold water is just fine.
  • Install low-flow fixtures: Showerheads and faucets made pre-1992 use up to twice as much water as newer fixtures. Consider making the switch.
  • Fix finally: Did you know that a simple leak of one drip per second would cost you $1/month in hot water losses? So, yeah, you need to fix that leak.

Frequently Asked Questions (FAQs)

If you still have questions racing through your mind about energy-efficient electric water heaters, the following section should help.

Is a high-efficiency water heater worth it?

Yes. Water heaters account for 12% of residential energy consumption, costing households $620/year, on average. You can cut that bill in half or more through efficient water heating.

Are newer water heaters more efficient?

Yes. Newer water heating technologies, such as point-of-use heating tankless heating, guarantee lower energy bills. Heat pumps are another innovative water heating technology that uses less electricity.

What is better – tankless or tank?

Tankless heaters are inherently more energy efficient because they eliminate standing losses. However, hybrid water heaters, which use a tank, are also very efficient.

What size tankless water heater do I need?

It depends on multiple factors, primarily your household hot water needs, or flow rate, measured in gallons per minute. Once you’ve determined your needs, find a tank within a gallon of two of your ideal flow rate.

How long should an electric water heater last?

It depends on whether it’s a tank-type or tankless water heating system. Tank-style water heaters last about 8-10 years, while tankless models can last up to 20 years.

Is it cheaper to leave the hot water constantly?

No. Although turning off the heater means you use more energy to get the water back to the desired temperature, leaving the heating on throughout is even more costly (standing and cycling losses) in the long run.

Should I turn my electric water heater off at night?

Yes. Leaving the hot water system running when you go to bed isn’t a great idea when pursuing energy efficiency. It means you waste a lot of energy overnight. The same applies when you go on vacation. Turn the water heater off to save energy.

Does turning off the electric water heater save money?

Yes. Turning off the electric water heater means using less hot water, meaning that your heating system works less. When the heater works less, the amount of energy spent on heating (say, per year) significantly reduces. The result? Money savings!

Should I turn off my water heater while on vacation?

Yes, especially if you’re using a tank heater system. If you leave the heater on, heating will continue even when you’re away, resulting in enormous wastages.

Top Rated Energy Star Electric Water Heater

1. Ecosmart ECO 36 36kw Electric Tankless Heater

Ecosmart ECO 36 36kw 240V Electric Tankless Water...
  • Sleek and compact design with digital output temperature display
  • ECOSMART tankless water heaters are 99.8-percent energy efficient
  • Manufactured in United States
  • Pipe Fittings:3/4 inch NPT
  • Required Breaker:4 x 40 A
  • 150 A

The ECO 36 from Ecosmart is a water heater you’ll come across a lot, and for a good reason – it’s one of the best tankless water heating systems everything considered. 

Rated at 36KW and 240V, the unit comes with patented self-modulating technology, making it ideal for colder regions where groundwater temperatures can reach below 37°F.

It’s also a high-capacity heater, rated at 3.5 gallons/minute (flow rate), which increases to 6.0 gallons/minute when lower temperature rise is needed.

This should be enough to handle two showers running simultaneously or up to four taps running simultaneously. A digital temperature controller allows you to adjust your temperature requirements in 1°F increments.

It’s a compact unit at 17 x 19 x 3.8 inches and weighing a paltry 18.35 pounds. Even better, the unit comes in a stylish finish and incorporates durable copper and steel heating elements for long-term efficiency. It’s backed by a lifetime warranty.


  • Self-modulating technology available
  • Sleek, compact design
  • 99.8% energy efficient
  • Control temperatures in 1°F increments
  • Lifetime warranty


  • No remote control
  • No timer

2. Stiebel Eltron Tankless Heater Tempra 36 Plus Electric Heater

Stiebel Eltron Tankless Heater – Tempra 36 Plus...
  • On-demand, continuous and unlimited supply of hot water
  • Sleek design saves space and no venting required
  • Electronic switch activated for virtually silent operation. Phase- single 60 Hz. Voltage- 208 V. Wattage- 27 kW
  • Copper sheathed heating element housed in copper cylinder
  • 7 Years leakage and 3 years parts complete warranty

Made in Germany by Stiebel Eltron, the Tempra 36 is another very efficient water heater. The first thing you need to know about this heater is that it automatically reduces flow (slightly) during peak demand to ensure that your showers never run out of hot water.

Other key features of the Tempra 36 include digital displays that accurately relay temperature readings and pre-set temperature buttons for temperature memory settings. Flow monitors on the units allow you to continually monitor how much hot water you’re drawing from the system.

This tankless water heater uses a copper sheathed heating element housed in a copper cylinder and requires 208V/150amp. It’s rated 0.99 EF (now UEF) and backed by a 7-year leakage and 3-year parts warranty.


  • Powerful 36KW water heating
  • Up to 7.6 gallons/minute flow rate
  • Digital controls
  • Rated 0.99 EF
  • ANSI, UL, and CSA certified


  • Flow rates are relatively low in colder climates
  • It’s on the high-priced end

3. Rheem 240V Heating Chamber RTEX-13 Residential Tankless Water Heater

Rheem 240V Heating Chamber RTEX-13 Residential...
  • External adjustable digital thermostatic control with LED display (+/1 degree accuracy
  • Durable Copper immersion two heating elements, field Serviceable.Self-modulating power control
  • Simple installation – 1/2 NPT adapters included; side 1/2 inch Compression water connections
  • 99.8% energy efficient. External controls to adjust temperature in increments of 1°f. Water-Saver Shower Head – 1.5 GPM
  • Threaded for easy replacement, simple installation, digital temperature display 54 A. 13kW Model Flow Rate: up to 3.17 GPM
  • 54 A

The self-modulating RTEX-13 from Rheem Manufacturing is a 13KW tankless water heater that offers a continuous stream of hot water at 3.17 gallons/minute. It’s a compact unit measuring just 12.63 x 8.25 x 3.63 inches, making it ideal for smaller applications, including studio apartments and RVs. It weighs 8.5 pounds.

Some of the standout features of the RTEX-13 include the 99.8% energy efficiency (EF rating) and thermostatic digital control. A single dial control allows you to adjust the heating temperatures (in 1°F increments) to your desired setting. It supports temperatures between 80°F and 140°F.

The heater is easy to install. Inside the package, you’ll find a user manual to guide you through the installation process. It requires 240V wiring.


  • A compact design ideal for smaller applications
  • 99.8% energy efficiency
  • Adjustable, digital thermostat
  • LED display
  • Durable copper immersion


  • Supports only one shower at a go

4. Rheem RETEX-27 Performance 27 KW Self-Modulating Tankless Water Heater

Rheem RETEX-27 Performance 27 kw Self-Modulating...
  • Brand New in box. The product ships with all relevant accessories

If you love the Rheem brand, but the RTEX-13 just won’t cut it, a higher-capacity option in the RETEX-27 is available.

Rated at 27KW, this tankless water heater supports flow rates up to 5.3 gallons/minute in areas where a high-temperature rise is needed. Where only a small temperature rise is required, it can run up to four showers simultaneously.

The heating system saves up to 50% in energy costs for point-of-use applications and 34% when used as a whole-home water heating solution. Temperatures are adjustable from a control knob in 1°F increments. An easy-to-read display allows you to keep track of the heating.

The RETEX-27 easily mounts to the wall and heats water to between 80°F and 140°F. It requires a flow rate of 0.25 to activate heating and is UL, ETL, and CSA Listed.


  • Saves up to 50% as a point-of-use system
  • Compact design for small spaces
  • Uses ¾ -inch water connectors
  • UL, ETL, and CSA Listed


  • No remote control
  • No timers

5. Bosch Thermotechnology WH27 Tronic 6000 C Electronic Tankless Water Heater

Bosch Thermotechnology - WH27 Tronic 6000 C...
  • CONVENIENT TANKLESS HOT WATER HEATER: 26.9 kW tankless whole house electric water heater provides hot water when needed, for as long as needed
  • EASY INSTALLATION: Can be installed virtually anywhere for commercial or residential applications
  • CONSISTENT TEMPERATURE: Polymer encased elements & built-in flow sensor ensures constant output temperature
  • STABILITY & CONTROL: External temperature control knob & superior temperature stability and control
  • GREAT EFFICIENCY: 97% thermal efficiency with minimal stand-by loss

The WH27 Tronic 6000 C from Bosch is a 26.9KW heater, making it an on-demand electric water heater best suited for situations where you need 1-3 hot water outlets at a time.

It’s a long-lasting unit designed to last up to 20 years (or more). The high-tech flow transducer allows the unit to run continuously with minimal maintenance.

Two key features of the WH27 Tronic 600 are the electronic flow-sensor and automated modulation. Together, these features ensure consistent hot water output at your desired settings. The unit implements a new scale prevention technology that allows you to monitor temperature stability closely.

The amount of hot water you can draw from the heating system at a go depends on the required temperature rise. A 75°F temperature rise allows a 2.4 GPM output while a 45°F rise delivers up to 3.5 gallons per minute.


  • Powerful at 27,000 watts
  • High efficiency of 97%
  • 20+ year lifespan
  • 2-year parts warranty
  • 5-year heating module warranty


  • Tends to kick the circuit breaker
  • Requires professional hardwiring

6. Titan SCR2 N-120 Electric Tankless Water Heater 220 Volts

Finally, the Titan SCR-2 N-120 is the least expensive product on this list. However, it also has the lowest water heating capacity at just 11.8KW. This makes it best suited for climates where only a short temperature rise is needed. Ideally, you shouldn’t need a rise greater than 65°F.

That said, though, the SCR02 N-120 is an attractively compact unit that installs with ease. It features a switch for adjustable temperature control and supports up to 4.0 gallons/minute. The output, however, reduces if greater temperature rise is needed. For instance, where a 95°F rise is required, you only get 1GPM.

The Titan measures 7 x 10 x 2.75 inches and weighs around 8.0 pounds. It requires 240V wiring and draws 54amps, so you need a 60amp circuit breaker.


  • Low priced (at under $250)
  • 99.5% thermal efficiency
  • 1-year electrical components warranty
  • 10-year water components warranty


  • Low water pressure
  • Temperature fluctuations

Wrap Up

Electric hot water systems are more naturally more efficient than their gas counterparts. But, you can get even greater energy efficiency by narrowing your search to tankless, point-of-use, and hybrid-electric models.

Though pricier than standard electric water heaters, these models guarantee substantial energy savings and could cut your water heating bill by more than 50%.