The water heater is the #2 energy use in the typical residential home falling right behind heating & cooling.  The water heater can use 18% to 20% of your energy dollar.  Since the water heater is a major energy user in the home we want to offer you information to help you with:.

• Purchasing a Water Heater
• Saving Energy with Your Water Heater
• Maintaining and Locating Your Water Heater
• Potential Home Improvements
• Tankless Water Heaters (Pros and Cons)
• Heat Recovery Water Heating Systems
• Heat Pump Water Heaters
• Insulating your water heater

• When buying or replacing a water heater, use the Energy Guide Label to purchase the most efficient unit available.
• Match your water heater size to the needs of your family.
• Electric water heaters are a very cost efficient option to consider as shown in the table below:
  
  

*US Department of Energy Formula

• Set your water heater thermostat to 120 degrees, or if your dishwasher is without a booster, 140 degrees (make sure you turn off the electric breaker before attempting to adjust the thermostat).
• Take showers instead of baths.  A shower saves 4-5 gallons of water.
• Wash in cold water with special detergent.  For most loads, it will do a good job.  The cost of an average load with hot water is about 38 cents.  An average load washed in cold water is about 1.5 cents.
• Wash a full load of dishes.  Dishwashers use approximately 15 gallons of hot water.  Washing by hand could use as much as 20 gallons.
• Repair leaky faucets.  One faucet leaking one drip per second wastes about 2,300 gallons of water per year.
• Turn off your electric water heater if you’re going to be gone more than three days.  It will take only about one hour to reheat the water when it is turned back on.
• Use a low-cost insulation on hot water pipes.
• Insulate your older water heater with at least R-6 insulation. 
• First, though, be sure to check your manufacturer’s warranty – in some cases, insulating a water heater will void the manufacturer’s warranty.

• Once or twice a year turn off your water heater at the circuit breaker and use a hose to drain the sediment from the bottom of the tank.  Sediment accumulated on the heating element makes operation less efficient.
• Locate your water heater in a warm area of the house and as close as possible to the points of water use.   The longer the pipelines, the more energy is lost.

• Energy Saving Investments:
  
  • Install heat pump water heating system      
  • Install solar water heating system      
  • Install heat recovery water heating system on existing air conditioning system      
  • Add insulation wrap to water heater      
  • Wrap the top only of electric water heater      
  • Insert water restrictors, limit flow to three gallons per minute (shower)      
  • Insert water restrictors, limit flow to three gallons per minute (sink)      
  • Install low-flow showerhead to limit flow to three gallons per minute      
  • Install faucet aerators to limit flow to three gallons or less per minute      
  • Insulate hot water pipes with pipe insulation

Background
Most people in North America currently use a storage tank water heater to provide hot water in their homes. A storage tank water heater keeps water hot 24 hours a day, even while you’re at work or sleeping.

A tankless water heater (or “demand” water heater), on the other hand, does not store hot water. It heats the water as you use it. Tankless water heaters, come in a variety of sizes for different applications and are available in propane (LP), natural gas, or electric models.

“But, Did You Know . . . ?”

• Tankless water heaters require a great amount of energy to heat water quickly (typically from 12kW to 28kW depending on the type of unit installed). Progress Energy has seen an increase in usage of these units and it is important to understand how this type of equipment impacts your electric system.
• The new load of a tankless water heater can sometimes equal the load of an entire new home!
• Progress Energy designs your neighborhood electrical system to meet the electrical needs of a typical residential neighborhood. However, if a customer installs a tankless water heater, the increased electric demand may exceed the design specifications of the system and require an upgrade of the cable and transformer. Utility regulations specify the method by which the additional cost for the system upgrades (called “Contribution in Aid of Construction) will be charged directly to the customer. & If a customer installs a tankless water heater, the customer is required by approved tariff in both the Carolinas and Florida to pay the full cost to upgrade their facilities (including cable and transformer) to meet the need.
• Customers complaining about a voltage fluctuation or flickering lights may be seeing the impact of a tankless water heater in their neighborhood. It is important to note that this voltage fluctuation may be noticed by other customers in addition to the customer with the tankless water heater – since several customers often share a single transformer. An investigation of all customers on the transformer may be necessary to determine the source of the problem. & If voltage problems exist because of a tankless water heater and a facility upgrade is necessary, the customer with the tankless water heater is required to pay the full cost to upgrade prior to construction.

“Frequently Asked Questions . . . ?”

Q. What are the energy requirements for tankless water heaters?
A. Electric heating element and gas requirements for tankless water heaters are much larger than for storage water heaters. A typical gas storage water heater has a gas input of 40,000 Btu/h. A gas tankless heater, though, may use up to 170,000 Btu/h and so may require larger gas lines and vents than conventional water heaters.
Similarly, although a typical residential electric storage water heater draws typically 4,500 watts, a whole-house electric tankless heater can draw as much as 28,000 watts.

Q. How much could I save with a tankless water heater?
A. There’s a possibility of a savings from 2% to 3% of your energy bill because you heat the water only when it is needed. But the extra costs of installing the unit and possible costs of upgrading the local electrical system may far exceed the savings on an electric bill. And, depending on the type of electric rate you are on, a demand water heater may impact your peak demand and actually increase your electric bill.

Q. How easy is it to install a tankless water heater?
A. Whole house tankless water heaters can be installed centrally to the point of use, such as under a sink. Tankless gas water heaters generally require a vent for the combustion heat and gases. Because of the power draw, multiple circuits and/or heavier wire will be necessary for installation of electric units. Installation by trained professionals who understand the technical issues of sizing, installing and safely venting a tankless water heater is essential.

Q. What are the benefits of having a tankless water heater?
A. Tankless water heaters are compact in size and virtually eliminate standby losses.  They can provide warm water at remote points of use and less water is wasted while waiting for warm water to reach a remote faucet. A tankless water heater can provide unlimited hot water as long as it is operating within its capacity.

Q. What is the approximate cost of tankless water heaters?
A. Tankless water heaters range in price from $200 for a small under-sink unit up to $1000 for a gas-fired unit that delivers 5 gallons per minute. Typically, the more hot water the unit produces, the higher it will cost. The installation costs of tankless water heaters are from 2 - 4 times higher than tank-type water heaters. For gas tankless hot water heaters, the same gas supply line and/or venting may need to be sized larger than for a typical gas tank. Electric tankless water heaters draw more power and will require multiple circuits and/or heavier cable, which will increase installation costs..

Q. What are the limitations of having a tankless water heater?
A. Electric units will draw more instantaneous power than tank-type water heaters. If electric rates include a demand charge (ie Time-of Use Rate), operation may be more expensive. More complicated electronics in tankless systems may require more attention than conventional tank units. You’ll see the major limitation of electric point-of use heaters: they don’t supply enough hot water for major end uses, such as dishwashers and showers. In fact, their usefulness is pretty limited to sinks. Even the electric unit’s labeled “whole-house” can only serve a single shower or two sinks.

For more information on tankless water heaters please visit:
http://www.eere.energy.gov/consumerinfo/factsheets/bc1.html

http://www.toolbase.org/tertiaryT.asp?TrackID=1402&DocumentID=2138

• Getting Maximum Savings from a Heat Recovery Water Heating System
  A heat recovery unit is a highly efficient water heating system that can cut annual hot water costs in half compared to conventional electric resistance water heating. How? The unit "recovers" heat exhausted by a central air conditioner or heat pump and uses it to heat water. This process supplies hot water virtually for free when the air conditioner or heat pump is cooling. It also supplies hot water at one-half the conventional cost when the heat pump is heating. The recovery unit does not produce hot water when the air conditioner or heat pump is not in use.
  
  
• Check For Proper Operation
  Heat recovery unit owners should test their recovery units during the air conditioning season to ensure they are receiving maximum savings. To test the unit, turn the standard water heater off at the circuit breaker (if it's not already off) and use water as usual for a day or so. If there is adequate hot water for household needs, then the heat recovery unit is doing its job. Leave the regular water heater off for the cooling season, but remember to turn it back on during non-air conditioning months.
  
  If there is some hot water, but not enough, more than likely the air conditioner isn't operating enough to exhaust adequate heat for the recovery unit to use. In this case, turn the standard water heater back on to supply additional hot water. Be sure to set the water heater thermostat at 110-120 degrees Fahrenheit. This will allow the heat recovery unit to provide the majority of hot water and allow the standard water heater to provide extra hot water when needed.
  
  If the recovery unit produces little or no hot water, and the air conditioner is properly cooling the home, have the recovery unit checked by a contractor.
  
  Also, keep in mind that the efficiency of your air conditioner will also affect your potential to recover heat. The more efficient your air conditioner is, the less potential there is for heat recovery because less heat is produced since the process recovers heat exhausted by a central air conditioner.
  
  
• Proper Installation and the Effect on Air Conditioners or Heat Pumps
  A heat recovery unit should be installed according to the manufacturer's instructions and the recommendations of the air conditioning or heat pump manufacturer. A properly installed unit will not adversely affect the operation of the air conditioning and heating system.
  
  
• Possible Savings with a Heat Recovery Unit
  Savings with a heat recovery unit will depend on hot water usage. Basically, the greater the hot water use, the greater the dollar savings. Recovery unit owners save most in summer when the air conditioner operates frequently. If the heat recovery unit is installed on a heat pump, a family will save in winter, too. The unit will produce a portion of the hot water needed using low-cost heat from the heat pump. The element in the standard water heater will supply the rest. 
  
  On a yearly basis, the heat recovery unit can save up to 50 percent of water heating costs. Most or all of those savings will be in the summer. The chart below lists estimated savings possible with a heat recovery unit.

Heat Recovery Annual Savings *

Number of Persons		Hot Water Usage
		Low	Medium	High
1		$35	$42	$50
2		$54	$65	$81
3		$73	$89	$104
4		$92	$111	$140
5		$111	$134	$170

* Savings are calculated at $.08/kWh for simplification and are based upon engineering assumptions and approximations. Actual energy savings may differ from those estimated due to variations in weather, individual energy use habits and home characteristics.

• Prices
  Prices for heat recovery units may generally range from $500 to $900 installed. Shop around and compare since costs may vary greatly between different dealers.
  

The water heater rates second only to an air conditioning and heating system in energy use. For some households, it might prove cost effective to switch to a more efficient method of water heating. One energy-saving option is the heat pump water heater – a device that has been around since the 1950s but has recently become more affordable for home use. This type of water heater is two times more efficient than a standard electric water heater.

• How a Heat Pump Water Heater Works
  The heat pump water heater functions similarly to the popular house heat pump air conditioning systems in that it extracts heat from surrounding air. The heat pump water heater, however, transfers that extracted heat to water stored in a tank. By capturing "free" heat from surrounding air, the heat pump water heater can transfer almost twice as much heat energy to the water than the electric energy it consumes. This ability to use heat from the air is what makes the heat pump water heater more efficient than standard electric water heaters.
  
  
• Optimal Location for a Heat Pump Water Heater
  Heat pump water heaters are best suited for warm climates in homes without central air conditioning. (Heat recovery units are usually more practical for homes in Florida that have central air conditioning.) Heat pump water heaters also cool and dehumidify the air around them. This can be a benefit in summer when additional cool air is welcome.
  
  
• Types and Prices of Heat Pump Water Heaters
  There are two types of heat pump water heaters – a retrofit model which attaches to an existing water heater tank and a "self-contained" model that has its own water tank. Prices for the retrofit model range from $600 to $900 installed. Prices for the self-contained model range between $1,000 to $1,300 installed. Standard electric resistance water heaters, on the other hand, range from $200 to $400 installed. Compare the warranty terms and service contracts offered with various brands of heat pump water heaters as most should offer an extended warranty for a minimum of five years.
  
  
• Potential Savings
  Savings with a heat pump water heater will depend on your water usage and the unit's efficiency. The more water used and the higher the unit's efficiency, the greater the savings. A heat pump water heater should have an energy efficiency rating of at least 2.2 (this rating is called a "COP" for coefficient of performance). High efficiency units (2.2 COP and above) could save up to 50 percent on water heating costs. According to Progress Energy estimates, annual savings with a heat pump water heater total about $34 per family member. A family of four, as an example, could expect to save about $135 a year. If the family paid $600 for their unit, the payback period would be close to four and one-half years.  
  
  
• Other Energy-Saving Options
  Progress Energy's Home Energy Check can help determine the cost effectiveness of a heat pump water heating system for individual homeowners. But for immediate savings, here are several steps that will help get the most from every water heating energy dollar:
  • Reduce the water heater temperature setting. We recommend 120 degrees for most homes and 140 degrees for homes with automatic dishwashers.    
  • Insulate the water heater tank and pipes. This will reduce standby losses and maintain water temperature longer.    
  • Install low-flow showerheads and water flow restrictors to reduce water use and cost.
    

Wrapping insulation around your water heater is a key conservation measure that can help you save energy and money. For best results, wrap both the cold and hot water pipes entering the tank. The top and sides of the tank should also be insulated down to the lower element.

Many ask why the tank doesn't need to be wrapped all the way to the floor and why we insulate the cold water pipe.

The answer to both questions is simply that heat rises to the top of the tank and travels up both the hot and cold water pipes.

When hot water is used in the house, water flows into the tank through the cold water pipe. During this time, the pipe stays cold. But when hot water is stored, heat rises to the top of the tank and travels up the cold and hot water pipes. At this time heat loss occurs through both pipes. Insulation should be wrapped around both pipes to reduce this heat loss.

Insulation should begin where pipes leave the tank and cover the vertical rise of the pipe, covering either the first five feet of horizontal pipe or the length of the pipe until it enters the wall – whichever is shortest. If the pipe takes a downward turn, insulation should extend only one foot past the turn.

Once hot water usage stops, the water heating elements will remain on until the tank water supply is heated back up to its original temperature. At that point, both elements will shut off. Heat will then rise to the top of the tank and should remain above the lower element and not travel downward. The tank should remain fairly cool at the lower element and extending downward. As a result, insulation is needed only as far down as the lower element.