What Is The Most Efficient Gas Water Heaters

If you’re thinking about investing in a water heater or replacing the existing one, gas-powered models are a great choice. More importantly, you want to choose the most efficient gas water heaters that guarantee cost savings.

This guide assesses some of the best gas-powered water heating systems to consider. These units are incredibly energy efficient. Even better, they are fairly priced and come with valuable convenience features for ultimate ease of use.

As you’ll find out, many of the products are tankless (without a storage tank) models. That’s because the absence of a storage tank eliminates standby energy loss. Let’s begin with the reviews. 

First, let’s discuss the advantages of gas water heaters and what makes them better than electric heaters (with a focus on efficiency), whether a water heater can use both electricity and gas as fuel sources, and whether you can replace an existing electric heater with a gas-powered model.

Most Efficient Gas Water Heater Comparison Table

Advantages of Energy Star Gas Water Heater

Away from the efficiency debate, gas heaters are also advantageous in many ways compared to electric water heaters.

advantages of the most efficient gas water heaters

More Powerful (Higher BTU Capacity)

Gas water heaters have a higher maximum heating capacity compared to electric heaters. The biggest electric heaters are rated at 36,000 watts (36KW), equivalent to about 123,000 BTU, whereas gas water heaters are rated as high as 198,000 BTU.

Higher Flow/First-Hour Ratings

Gas heaters also beat electric models when it comes to the volume of hot water you can get. Whether it’s a storage tank or tankless model, you’re guaranteed more gallons of hot water per minute for similarly rated (BTU-wise) heaters. This quality makes gas heaters better suited for larger families.

Longer Expected Life

A typical electric heater has an average life of 6 years, with the best ones boasting a 12-13-year life expectancy. Gas heaters can last twice as long. Even the least durable gas water heaters last about 15 years. Meanwhile, on the higher end, tankless gas heaters can last an incredible 25 years, with a few backed by lifetime warranties.

Cheaper and More Reliable

Natural gas heaters compensate for the lower fuel-utilization efficiency with lower costs per unit of energy. Natural gas has recently been priced around $5-8 per kWh while electricity retails between $15 and $23 per kWh. In the end, therefore, a very efficient natural gas water heater should return a higher ROI compared to a similarly-rated electric model.

Remember also that natural gas is more environmentally friendly since it’s a renewable energy source. Electricity is also associated with more greenhouse gases, including sulfur dioxide, nitrogen oxide, and mercury emissions.

Is a Gas Water Heater More Efficient than Electric Heaters

When it comes to fuel type, there are two broad water heater types to pick from – gas and electric (solar heaters are also becoming increasingly popular).

In some cases, you may not have a choice. This is especially true if you live in a climate where gas heaters are not permitted or where the home has no gas supply.

In that case, your options are limited to propane or electricity. However, most homes have natural gas lines and electricity supply, meaning you get to choose what you want.

Electric water heaters typically have a higher Uniform Energy Factor (UEF) rating. UEF, previously Energy Factor (EF), is a ratio that compares the amount of hot water produced per day to the amount of fuel consumed over the same period. The higher the UEF rating, the higher the efficiency of a heating system.

This doesn’t mean that gas models are less efficient. When shopping from the same manufacturer, in the same BTU/Watt range, you’ll find many gas water heaters that are more efficient than similar-sized electric models. It’s your job to make comparisons and uncover the best option for your needs.

Thankfully, the Federal Trade Commission (FTC) requires every new conventional water heater to have a yellow and black Energy Guide label to make the comparison easier. Aside from indicating the appliance’s UEF rating, the energy guide label must show the fuel the unit uses and the estimated yearly operating costs. Also on the label, you’ll find;

  • The estimated amount of energy used yearly (in BTUs/Watts)
  • An Energy Star logo (if Energy Star certifies the product)
  • Tank size (in gallons)
  • First-hour rating (more on this shortly)

You may not be able to see the Energy Guide label when shopping online. However, many sellers are more than willing to provide pertinent information in line with FTC requirements.

energy efficient gas water heater vs electric water heater

Some water heater models (gas or electric) are inherently more efficient.

Although gas water heaters are generally less efficient than their electric counterparts, a few models within the category are naturally more efficient than others. For gas water heaters, three options that guarantee excellent energy savings are condensed water and tankless heaters, and Hi-Efficiency models.

Condensed Water Heaters

Condensed water heaters capture and recirculate what would otherwise be wasted energy to increase overall efficiency. They are the direct opposite of non-condensed models that don’t recirculate energy.

Non-condensing models route hot water vapor through a flue and dump it outside the house. Condensing units don’t dispose of the water vapor. Instead, the moisture is collected and blown through a coil in the unit’s base, where incoming cold water can absorb most of the heat.

It’s worth noting that condensing water heaters are more expensive than their non-condensing counterparts. However, they are less costly to operate, have higher first-hour ratings, and boast greater recovery rates than non-condensing models.

High-Efficiency Heaters

High-efficiency (HE) heaters are the most energy-efficient storage (with tank) water heaters. While standard storage tank heaters are rated between 0.50 and 0.60, HE models that aren’t Energy Start certified have UEF ratings of between 0.62 and 0.64.

Energy Star certified models, meanwhile, boast UEF ratings as high as 0.67. Energy Star certified models, therefore, guarantee 10-20% more energy savings and can result in $140 in savings annually and up to $2,900 saved over the tank’s life.

Remember that these heaters are slightly more expensive than non-HE models. Expect to shell out up to $1,000 more (including installation).

Tankless Water Heaters

Finally, tankless models are the most energy-efficient gas heaters ever made. Also known as “on-demand” or “point-of-use” heaters, they heat water when you want hot water. Otherwise, the water in your lines remains at normal temperatures.

Thanks to the absence of a storage tank, tankless water heaters feature a smaller, more compact design. They draw water in through a heating element when either the appliance or a faucet is turned on. Since water is only heated when the appliance is turned on, the standing loss is eliminated.

Statistics show that tankless heaters save up to 35% more energy this way. Gas-powered tankless models can be condensing or non-condensing. A condensing model guarantees even greater energy and cost savings.

Tips for Choosing the Best Gas Water Heater

There are endless factors you want to consider when choosing a gas-powered highly-efficient water heater. We advise that you prioritize the following four considerations;

how to choose the most energy gas water heater

How Much Water your Family Needs

Before you set out on the shopping trip, take a moment to analyze your water usage. Make sure to include showers, running the dishwasher, and loads of laundry. This should help you determine the right tank size.

If you’re buying a tankless model, refine the usage patterns further to how much hot water you’d need at any given time. How much hot water would you need at peak capacity (running multiple tasks simultaneously)? This will provide you with the ideal flow rate for your family.

Level of Efficiency

Yes, you want an energy-efficient gas water heater. But how efficient? Some of the units are as efficient as 99.9%. But, some in the lower 90s may also be just as efficient, everything considered.

Energy.gov also says that efficiency isn’t just about the EF. Picking the right size (capacity) is just as important. The consumer organization says that the best heater is one with an FHR or flow rate within one or two gallons of your needs. Above all, Energy Star certification should be considered.

Controls and Convenience

Different heaters come with different controls and convenience features. Some of the features you want to pay attention to include digital displays that allow you to monitor water settings and set custom settings. A few heaters also have timers and remote control. These are other features to consider.


Finally, consider the warranty period of the appliance and the specifics of the warranty. What exactly is covered? Are leaks covered? What about the burner?

Key Water Heater Efficiency Terms Explained

A few terms are often used when discussing water heating efficiency, which may sound new, especially if this is your first time shopping for these appliances. The following are some of those terms defined;

  • Standby losses: Standing losses are the losses resulting from keeping hot water standing by in a tank awaiting use. All storage tank heaters experience standby losses. The heat is typically lost through the tank’s sides, bottom, and top. In gas heaters, some heat is also lost through the vent flue and the pilot light. Tankless models eliminate all standby heat losses.
  • Cycling losses: Also known as distribution losses, cycling losses happen as water cycles through the pipes and tank (where such is present). All water heating systems experience cycling losses. The bigger the distribution system, the greater the potential losses. Continuous circulation systems further increase cycling losses by keeping water in the pipes longer. Insulation is the best medicine for cycling losses.
  • First-hour rating: The first-hour rating of a water heating system defines the amount of hot water (in gallons) a storage tank heater can generate per hour. This value should help you determine the capacity required to meet your household needs. It’s calculated by multiplying the tank’s capacity by 70% and adding the recovery rate.
  • Flow rate: The first-hour rating only applies to storage tank heaters (both electric and gas). When shopping for a tankless model, the metric used to determine whether the unit would meet your household needs is flow rate. It refers to the combined volume of hot water (from all faucets, baths, showers, etc.) that the tankless water heating system can support simultaneously. It’s measured in Gallons per Minute (GPM)
  • Recovery efficiency: Recovery efficiency (or rate) refers to the amount of heat energy from the energy source is transferred to the water. It’s the percentage of heating energy that actually helps with the heating (compared to the proportion that’s lost). The standard storage tank gas heater has a 75% recovery rate, which means that 75% of the heat goes towards heating while 25% is lost. Tankless gas heaters have recovery rates as high as 99%.
  • Temperature rise: Temperature rise is the difference between the water’s temperature as it enters the heating system and as it comes out at the other end. Temperature rise has a significant impact on the first-hour rate and flow rate.  

Energy Efficient Gas Water Heater Frequently Asked Questions

If you still have questions about gas water heaters and their efficiency, the following are answers to questions that are commonly asked;

Can I replace my gas water heater with an electric one? What’s the process?

Yes. Although I’d not recommend it, you can replace an existing gas water heater with an electric model. Ideally, you want to have a professional handle the installation because you’ll need to resize the chimney, install a liner, install a breaker and a new electrical line, and then disconnect the old heater and install a new one.

Can a water heater be both gas and electric?

No. You can only have one or the other. If you get tired of your gas heater and decide that you want an electric water heater, you’ll need to buy a new electric-powered heater.

Do gas water heaters require electricity?

Yes, the majority do. They mostly use electricity for piezoelectric ignition. But others also use electricity for remote control, digital displays, and to run sensors in the heating process. Sensing flow rate, for instance, requires electricity.

Does the location of my heater matter?

Very much. The main reason is maintenance. Imagine a scenario where your water heating system leaks, and it’s located in a place that’s incredibly difficult to access! By the time repairs are done, there would be significant water damage in the house.

How difficult is it to install a gas water heater? What’s the process like?

Installing a gas water heater is a delicate and demanding process that is best left to a professional. I strongly advise you against doing it on your own.

In general, though, the process involves installing earthquake straps, connecting the water supply, installing the vent hood, installing the piping, installing the gas connection, filling the tank, connecting the earthquake straps, and connecting the drain pipe in that order.

How high does a gas water heater have to be off the floor?

According to the National Fuel Gas Code, your heater should be 18inches off the ground. This rule helps prevent fires and even explosions if a flammable substance spills near the gas heater.

What are the Most Efficient Gas Water Heaters

1. Rinnai RL Series HE+ Tankless Hot Water Heater

Rinnai RL94EN Tankless Hot Water Heater, 9.8 GPM,...
  • Original Design: Tankless hot water heater's Circ-Logic technology offers recirculation patterns that match your habits; For the latest in non-condensing technology that speeds up service and installation, check out our new RE180eN model
  • Never Run Out of Hot Water with this Compact Tankless Gas Water Heater: Non-condensing tankless hot water heater from Rinnai is only the size of a small suitcase and fits in a wide variety of spaces, but provides up to 9.8 GPM (6 fixtures at once)
  • Smart, Durable Design: Includes 12-, 5-, and 1-year residential guarantee and 5-, 5-, and 1-year commercial factory warranty for heat exchanger, labor, and parts, respectively; See Controlr module for WiFi control (not included)
  • Professional Installation Recommended: Visit the Find a Rinnai PRO page on our website to locate a qualified technician in your area to install your tankless water heater; We do not recommend installing a water heater without a technician
  • Find Your Rinnai: See our product guides, manuals, energy guide, warranty information, videos, and tables to find the right tankless water heater for your home; Check our Ground Water Temperature Map to see if this heater is optimal for your region

The High Efficiency (HE) RL94eN is an RL series tankless water heater from one of the best-known heating appliances manufacturer – Rinnai. It uses ThermaCirc360 technology to recirculate hot water through your pipes and guarantees hot water as and when you need it.

The compact design allows for easy installation. You get to choose from indoor or outdoor installed models, whichever option you choose, though, the heating system takes up a total of 14.2 x 10 x 22.99 inches.

It has a Uniform Energy Factor (UEF) of 0.81/0.82, available in natural gas or propane options, and comes with isolation valves. It’s also Wi-Fi ready.

With a capacity of up to 9.4 Gallons-per-Minute (GPM), it can power up to two showers and three sinks simultaneously. The unit is backed by a 12-year heat exchanger warranty, 5-year parts warranty, and 1-year residential installation warranty.


  • Up to 192,000 BTU
  • Up to 9.4 GPM 
  • UEF rating = 0.82
  • Vent- kit included
  • 5-year parts warranty
  • 20-year life expectancy


  • Not Energy Star qualified
  • Most expensive in this list

2. Eccotemp i12-NG Tankless Water Heater

Eccotemp i12-NG Tankless Water Heater
  • Whole home indoor, gas powered tankless water heater, rated at 3 GPM that activates only on demand and no pilot light needed, reducing energy consumption
  • Sleek, modern design with black tempered glass front panel featuring an easy to use LED display controls
  • Features fully automatic temperature controls with an energy saving mode and child lock technology
  • Safe electronic ignition system; Plugs into standard 110v electrical outlet with UL-listed cord. Field tested to 5500 ft. elevation (not recommended to be used any higher)
  • Uses standard 1/2" NPT water fittings and comes with horizontal venting allowing for a convenient and quick installation

If you’re interested in an indoor-installed model, the i12-NG from Eccotemp is an excellent option to consider. With a maximum GPM rating of 4.8, it’s not the most powerful gas water heater.

However, it’s incredibly modern, featuring a sleek design with a black glass tempered front panel and convenient digital controls.  

It provides a 35-40°F temperature rise when operating at a flow rate of 3.0. But, it can still offer a 77°F rise at a 1.5 flow rate and features fully automatic temperature controls and child locking technology. It also supports fully independent gas and water control.

The 12,000 to 80,000 BTU i12NG is tested to 5500 ft., UL Listed and has an Energy Factor of (EF) of 0.79. It measures 16 x 16 x 11 inches and is backed by a 2-year manufacturer warranty.


  • Up to 80,000 BTU
  • UEF rating = 0.79
  • Sleek, modern design
  • Digital LCD control panel
  • Venting kit included
  • 2-year warranty


  • Best for small families

3. Noritz NRC66DVNG Indoor Condensing Direct Tankless Hot Water Heater

Noritz NRC66DVNG Indoor Condensing Direct Tankless...
  • Endless hot water
  • Can be vented with Schedule 40 PVC Pipe and Fitting
  • High Efficiency
  • Low Nox
  • Remote thermostat & 6' power cord included

The Model NRC66DVNG from Noritz is a condensing water heater, which means that it recovers heat from outbound water vapor for even greater heating efficiency (more on this in the buying guide section). It’s also a tankless model. Combine the two qualities, and you have an exceptionally efficient water heating system.

It supports flow rates of up to 6.5 gallons per minute and easily vents with a 3-inch 40/80 PVC, PP, or CPVC. The unit comes complete with a 6-foot power cord. However, the required IK-WV-200-1-XX-LF valve kit is sold separately. The remote thermostat is also included.

You’ll need to purchase a few more items (separately), including a rain cap, atmospheric conversion kit, and horizontal termination/intake PVT-HL. Otherwise, it’s a great unit.


  • Up to 120,000 BTU
  • UEF rating = 0.89
  • Fully condensing technology
  • Built-in temperature controller
  • 5°F temperature adjustments
  • 5-year parts warranty
  • 12-year heat exchanger warranty


  • Valve kit sold separately
  • Noritz installer needed

4. Takagi T-H3-DV-N Condensing HE Natural Gas Indoor Tankless Heater

Takagi T-H3-DV-N Condensing High Efficiency...
  • Endless hot water, On-demand usage, Compact, Space saving, Energy conservation
  • Computerized safety features, No pilot light to have to worry about
  • Safety features include freeze, overheat, surge protection, and troubleshooting diagnostic codes
  • Satisfies the 2012 SCAQMD Rule 1146.2 for Ultra-Low NOx Emissions
  • Primary heat exchanger utilizes commercial-grade copper alloy for 25 times better heat transfer than stainless steel, Integrated controls and power cord as standard features

The highest capacity tankless heater on this list, the Takagi T-H3-DV-N, can reach up to 10 gallons-per-minute, one of the industry’s highest rates. It means that the unit can support four simultaneous showers or up to six different sink uses.

The plaudits don’t end there. The T-H3-DV-N also features computerized safety controls, including freeze, overheat, and surge protection. Troubleshooting and diagnostics are also computerized.

You’ll notice that the heat exchanger is made from commercial-grade copper alloy. As a heating element, copper alloy is 25x more durable than stainless steel.

The Takagi measures 10.75 x 17.75 x 22.5 inches and weighs about 59 pounds, these figures placing it on the bulky end of indoor natural gas tankless heaters. The T-H3-DV-N is backed by a 15-year heat exchanger warranty and 5-year limited parts warranty.


  • 199,000 BTU
  • UEF = 0.93
  • Power cord included
  • Integrated controls
  • Ultra-Low NO emissions
  • Energy Star certified
  • Certified up to 10,100 feet


  • A bit noisy at 55 dB
  • DIY voids warranty

5. Camplux CA528 5.28 GPM Indoor Natural Gas Water Heater

Tankless Water Heater Natural Gas, Camplux 5.28...
  • Energy & Space Efficient - No need to wait 30 minutes for preheating and limited use of hot water like with a tank water heater. Tankless for endless hot water.
  • Satisfy Whole Family: With 5.28 GPM and 150,000 BTU heating capacity through propane gas intake, it is suitable for 2-3 outlets for the whole family. with a UEF of over 0.82, the high energy conversion rate can effectively reduce energy loss, saving the family energy and money.
  • Convenient, Easy Installation - Camplux tankless water heater is perfect with customized vent pipe CP-70 together for better ventilation performance for indoor installation.The package does not include hot and cold isolation valves, pressure relief valve and venting, please purchase separately.
  • High-Rise Wind Resistance - The electric hot water heater with 90°wind isolation design, this instant hot water heater can anti backflow wind in high floors.
  • Quality Service: Camplux offers 1 years of service and you can contact us directly by email if you encounter any problems.We offer 24 shift hours customer service make the customer experience easy and fast through our live chat, phone support & our online helpdesk. Have a question? Give us a call at (844) 538-7475.

Boasting close to 20 years in the industry, Camplux now makes some great home heating products. The Model CA528 NG water heater is another masterpiece from the company.

It’s a tankless heating system rated for indoor installation and boasts many innovative features, including PCB frequency conversion, intelligent control, and smart temperature adjustment.

Self-test, real-time intelligent monitoring, and Carbon Monoxide (CO) multiple protection are other standout features of the CA528. The unit supports up to 5.28 GPM flow rates, equivalent to two simultaneous showers or a shower and sink. Unfortunately, these tanks can’t be used above 2,000 ft.

The phosphorous deoxidized copper heat exchanger guarantees excellent thermal efficiency of 0.92. The unit features a wind pressure sensor to adjust the fan for greater efficiency automatically.  


  • 150,000 BTU/hour
  • UEF = 0.92
  • Fully automatic temperature control
  • Resists grade-8 wind speeds
  • CSA certified for safety


  • Vent kit not included

6. A.O. Smith XCR-50 ProMax Plus High-Efficiency Gas Water Heater (60,000 BTU)

A.O. Smith XCR-50 ProMax Plus High Efficiency Gas...
  • Blue Diamond glass coating provides superior corrosion resistance to industry-standard glass lining
  • Self-powered electronic gas valve uses thermopile to generate power needed to operate the electronic gas control without requiring external power
  • Internal microprocessor provides enhanced operating parameters and tighter differentials for precise sensing and faster heating response
  • Dynaclean diffuser dip tube helps reduce lime and sediment buildup, maximizes hot water output; made from long-lasting PEX cross-linked polymer
  • Meets all current regulations set forth by the National Appliance Energy Conservation Act (NAECA)

Finally, A.O. Smith XCR-50 is the only storage-tank water heater on this list (all the others are tankless models), which should tell you enough about its efficiency. It’s one of the very best storage tank water heaters.

Featuring a Blue Diamond glass coating, the unit is super resistant to corrosion. The tank also uses a DynaClean diffuser dip tube to reduce lime and sediment build-up while maximizing hot water output.

The tube is made from a durable PEX cross-linked polymer. An in-built microprocessor enhances the water heater’s operating parameters, ensuring tighter differentials and faster heating response.

The heater implements a self-powered electronic gas valve thermopile to generate the power needed to operate the electrical controls, virtually eliminating the need for external power, and meets all the National Appliance Energy Conservation Act (NAECA) requirements.


  • 50-gallon capacity
  • Piezo push-button igniter
  • Low NO emission
  • UEF = 0.61
  • First-hour rating – 99 gallons
  • 10-year limited parts warranty
  • 10-year limited tank warranty


  • Relief valve not included
  • Not FVIR certified

Wrap Up

In the end, the most efficient gas water heater can just be what you need to bring water heating to your home without burning a hole in your pocket. But, it’ stands with understanding what “efficiency” entails. Efficiency isn’t just about the Uniform Energy Factor (UEF). Other factors, such as sizing, are just as important.

More importantly, your eventual savings will be determined by your usage habits. To save the most from your new water heating system, learn to minimize wastage, turn down the thermostat a few degrees, and consider switching to smaller-size faucets.