Determining Energy Efficiency of Storage, Demand, and Heat Pump Water Heaters

Use the energy factor to determine the energy efficiency of a storage, demand (tankless or instantaneous), or heat pump water heater.

The energy factor (EF) indicates a water heater's overall energy efficiency based on the amount of hot water produced per unit of fuel consumed over a typical day. This includes the following:

  • Recovery efficiency – how efficiently the heat from the energy source is transferred to the water

  • Standby losses – the percentage of heat loss per hour from the stored water compared to the heat content of the water (water heaters with storage tanks)

  • Cycling losses – the loss of heat as the water circulates through a water heater tank, and/or inlet and outlet pipes.

The higher the energy factor, the more efficient the water heater. However, higher energy factor values don't always mean lower annual operating costs, especially when you compare fuel sources.

Product literature from a manufacturer usually provides a water heater model's energy factor. Also, see the Product Information resources listed on the right side of this page (or below if you've printed it out).

Don't choose a water heater model based solely on its energy factor. When selecting a water heater, it's also important to consider the following:


A properly sized water heater will meet your household's hot water needs while operating more efficiently. Therefore, before purchasing a water heater, make sure it's the correct size.

Here you'll find information about how to size these systems:


For sizing combination water and space heating systems, including some heat pump systems, and tankless coil and indirect water heaters, consult a qualified contractor.

Fuel type

When selecting a new water heater, it's important to consider what fuel type or energy source you will use, including its availability and cost. The fuel used by a water heating system will not only affect annual operation costs but also the water heater's size and energy efficiency.

Click to read more about Fuel Types, Availability and Costs for Water Heating

Overall cost

When considering a water heater model for your home, estimate its annual operating cost. Then, compare costs with other more and/or less energy-efficient models. This will help you determine the energy savings and payback period of investing in a more energy-efficient model, which will probably have a higher purchase price.

Click to read more about Estimating a Storage, Demand, or Heat Pump Water Heater's Costs

First hour rating

To properly size a storage water heater—including a heat pump water heater with a tank— for your home, use the water heater's first hour rating (FHR). The first hour rating is the amount of hot water in gallons the heater can supply per hour (starting with a tank full of hot water). It depends on the tank capacity, source of heat (burner or element), and the size of the burner or element.

Click to read more about Sizing Storage and Heat Pump (with Tank) Water Heaters

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