High-efficiency gas water heaters have several features that reduce the cost of heating water. First, the tank walls have higher levels of foam insulation, as high as R-13. Secondly, instead of having a standing pilot light, a high-efficiency model utilizes an intermittent-ignition to reduce the time that the pilot light burns. The intermittent-ignition device provides a spark to ignite the pilot flame only when needed. Finally, heat exchanger efficiencies are improved, allowing heat from the gas burner to more efficiently and completely heat the water in the tank.

What To Look For

The Gas Appliance Manufacturers Association (GAMA) sponsors an efficiency certification program. This program verifies manufacturer's equipment efficiency ratings according to a standard test method. Efficiencies of water heaters are expressed by a number called an Energy Factor. A Consumer's Directory is published biannually which lists the manufacturer's model numbers and Energy Factors. Gas water heaters with an Energy Factor of .60 or higher are considered energy efficient. The Federal Trade Commission (FTC) requires that all storage type water heaters be labeled with an "Energy Guide" label, which is based on the GAMA certification. This label shows, based on the national average cost of fuel, the annual operating costs of that particular water heater. The label also shows how that particular water heater compares with all other comparable models.

Insulating the Tank

In the past, the use of external insulation blankets on water heater tanks was widely recommended. Older water heaters had much less internal insulation than current models, and the added insulation helped to reduce "standby losses" and overall water heating costs. Today’s water heater tanks are built with much higher levels of internal insulation, so an external insulation blanket is much less important. If your water heater is less than ten years old, it probably has enough insulation already built into the tank. If it is older than ten years, it will probably need to be replaced before long. If you do decide to install an external blanket, be careful not to block the air flow to the combustion chamber (usually at the bottom) or the vent at the top.

Insulating Pipes

Hot water pipesshould be insulated wherever they are accessible, particularly when located in unheated areas. Pre-cut , using a foil-faced fiberglass insulation or foam insulation sleeves are readily available and easy to install.. The foam sleeve simply slips onto the pipe through a slit in the sleeve; the slit can then be sealed with tape.