Heating and cooling: Hot water heaters

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Heating water accounts for approximately 20% of your home's energy bill.

Water heaters (heat pump)

diagram of heat pump water heater

Heat pump water heaters use electricity to draw in ambient heat from the surrounding air and transfer it into the water in the tank instead of generating heat like tank or tankless models. Through this technology, heat pump water heaters use up to 70% less energy than traditional gas water heaters.

What to look for

  • Choose a water heater with the right capacity for your home and family. 
  • Look for units with a high Uniform Energy Factor (UEF). The higher the UEF number the less it will cost to heat your water. 
  • Look for the first hour rating, which is the calculated amount of water your heater can deliver in the first hour of usage. This will provide you with the best measure of how much consistent hot water the heater can supply. 
  • Heat pump water heaters will have a compressor, so look for units with a lower decibel level if quieter performance is desired. 
  • Ensure your heat pump water heater can fit your electrical panel load.

Things to consider

  • Heat pumps will not operate efficiently in cold spaces since they tend to cool the spaces they are in. Installing them in a space with excess heat like the furnace room will help increase their efficiency. 
  • Consider the size of the tank based on the household’s peak hot water demand. Larger tanks can provide more hot water at once but are less efficient. A smaller tank may be best if your household is expected to use less hot water.

Average cost

Around $1500 - $3000 not including installation.

Water heaters (storage tank)

Water heaters with storage tanks are the most common in Canadian homes, but they are not the most energy-efficient. Electricity, gas or oil is used to heat water stored in the tank and supply it, as needed, to household fixtures and appliances. Storage tanks typically hold between 113 and 378 litres of water in their tanks, and this water is continuously reheated and kept hot 24 hours a day.

What to look for

  • ENERGY STAR® certified models use 14% less energy, on average than other storage tank models.
  • Choose a water heater with the right capacity for your home and family.

Things to consider

  • To improve efficiency, insulate the hot and cold water pipes within 2 to 3 metres of the water heater, and reduce the water temperature on your thermostat. Most water heaters are set to 60° C, consider 48°C instead.

Average cost

$800 to $1,500, plus installation.

Source: Natural Resources Canada

Water heaters (tankless)

Tankless water heaters heat water as it flows, and only when required, using an electric element or gas burner. They provide endless hot water and the heat-on-demand feature means you only pay to heat water as you use it, instead of paying to keep a tank of water heated 24 hours a day, 365 days a year.

What to look for

  • ENERGY STAR® certified tankless water heaters uses 30% less energy, on average than heaters with storage tanks.
  • Consider models with an efficiency rate of 80% or higher.
  • Buy the right size for your needs. Consult an experienced plumber to estimate the hot water demands in your home.

Things to consider

  • Tankless units are more efficient than heaters with storage tanks, but the cost to purchase and install is higher.
  • Hire a certified HVAC technician to install the unit so that you are eligible for all warranties.
  • Tankless units save space. Wall-mounted units can be hung on almost any wall, including a wall close to the point of use.
  • Have your unit serviced every year or two by a qualified professional. Consult your owner's manual for details.

Average cost

$1,000 to $2,800

Source: Natural Resources Canada

You may also want to consider a solar water heater

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