The first step in choosing a water heater is to determine the appropriate fuel type. In Santa Cruz, San Jose, Marin, and the Bay Area natural gas, and propane water heaters are generally less expensive to operate than electric models. Though this can vary depending on your propane carrier’s rates and whether your electric water heater is partially offset by solar panels. If you are considering electricity, check with your local utility company or electricity supplier to see if they offer off-peak electricity rates. If available, heating your water during off-peak hours will save you money.

Using Off-Peak Power to Heat Water
Most consuSan Rafael Plumber | Water Heater Larkspur Repairmers use more hot water in the evenings and mornings than at other times of the day. For those who have an electric water heater, this usage contributes to the electric utility company’s "peak load", or the largest amount of power demand that they have to meet on a daily basis. Some utilities are required to offer their customers “time of use” rates that vary according to the demand on their system. Lower rates may be charged at "off-peak" times and higher rates at “on-peak” times. You may be able to lower your electric bills if you can take advantage of these rate schedules. Check with your local electric utility to find out if it offers time-of-use rates for residential customers, and if so, what the rate schedules are. Some utilities even offer incentives for customers who allow their utility to install control devices that shut off electric water heaters during peak demand periods. Timers that automatically turn your water heater off and on are a good energy-saving option if you have an electric water heater.

Heat Pump Water Heaters
If you are in a moderate climate, consider a heat-pump water heater, which is more efficient than a conventional electric water heater. Though a heat-pump water heater may have a high initial cost, it can save up to 50% of your water heating bill in moderate climates. Heat pumps can be added onto your water heater or purchased as an integral part of a new water heater. The one major consideration with heat pump water heaters is that they need space to work properly. They are ideal in garages or attic spaces. In general they will not work properly if installed in a sealed utility closet.

Water Heater Efficiency
The efficiency of water heaters is indicated by their energy factor (EF), which is based on recovery efficiency, standby losses, and cycling losses. The higher the EF, the more efficient the water heater. Electric resistance water heaters have EFs ranging from 0.7 and 0.95; gas water heaters from 0.5 and 0.6, with some high-efficiency models ranging around 0.8; oil water heaters from 0.7 and 0.85; and heat-pump water heaters from 1.5 to 2.0. Everything else being equal, select a water heater with the highest energy factor (EF). Also look for a water heater with at least one-and-a-half inches of tank insulation and a heat trap.

In the United States, all water heaters are sold with EnergyGuide labels to indicate their energy efficiency. These labels provide estimated annual operating costs, and also indicate the cost of operating the models with the highest annual operating cost and the lowest annual operating cost. By comparing a model's annual operating cost with the operating cost of the most efficient model, you can compare their efficiencies.

Water Heater Size
Although some consumers buy water heaters based on the size of the storage tank, the first-hour rating (FHR), provided on the EnergyGuide label, is actually more important. The FHR is a measure of how much hot water the heater will deliver during a busy hour. Before you buy a water heater, estimate your household's peak-hour hot water use (your water use during morning showers, for instance) and look for a unit with an FHR in that range.

Tankless Water Heaters
Demand water heaters, also called tankless water heaters, are an option that should be considered when replacing a water heater or when building a new home. Demand water heaters only produce hot water when you need it, thereby avoiding the energy losses due to storing hot water. However, they need to be matched with your home and families’ hot water demand rate. In general tankless is not an ideal solution for large families. Where tankless really makes sense is in vacation homes or when space is an issue. One other place tankless can be used with in combi-boiler or Apollo hydroheat situations.

Water Heater Safety
For safety as well as energy-efficiency reasons, when buying gas- and oil-fired water heaters, look for units with sealed combustion or power venting to avoid back-drafting of combustion gases into the home. It’s essentially that any gas burning appliance, such as a water heater, be properly vented and given proper combustion air supply. Proper combustion air supply is one or the most common screw ups that we see among less reputable contractor and homeowner water heater installs. When a gas appliance is starved of combustion air it can soot, produce high levels of carbon monoxide, and be a fire hazard.

Purchasing a water heater is an 8 – 15 year purchase. The longevity of your water heater will depend on a lot of things: water quality, location, usage, and most of all installation quality. Remember a poor quality water heater installed properly by Bellows Plumbing, Heating, & Air will outlast a top brand water heater that’s installed incorrectly.