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Selling Point: High-Efficiency Natural Gas Water Heaters

Key Points
  • Homes equipped with energy-efficient appliances and other green features are easier to sell.
  • Tankless, gas-fueled condensing water heaters have higher efficiencies than non-condensing types.
  • ENERGY STAR® certified water heaters can reduce water heating bills by up to 30 percent.

Energy star logo
Today's home buyers find houses with energy-saving features more attractive. In fact, houses equipped with ENERGY STAR certified appliances sell faster and bring higher prices than houses that don't, according to the National Association of Homebuilders. Whenever possible, install appliances with the highest efficiency. For water heating, there are several gas-fueled options that are ENERGY STAR certified.

High-efficiency gas storage units heat water in a glass-lined steel tank with a burner located at the bottom. ENERGY STAR certified models have better insulation, heat traps and more efficient burners. They use up to 8 percent less energy than standard models. For home buyers looking routine installation and maintenance, these water heaters fit the bill.

Gas condensing tankless units eliminate the tank, providing hot water on demand in capacities up to 13.2 gallons per minute. They capture wasted heat from exhaust gases using a second heat exchanger (usually stainless steel) through which the hot flue gases pass. The gases cool and condense, transferring their heat to the surrounding water.

The resultant exhaust gases are cool enough to permit the use of plastic venting ducts, which are less expensive and easier to install than the stainless steel venting required for conventional demand water heaters. However, tankless units require a condensate drain, special venting and a 3/4 inch gas line.

ENERGY STAR condensing tankless units:

  • Use 9 percent less energy than a noncondensing gas tankless water heater unit
  • Reduce water heating bills by about 30 percent
  • Have lower operating costs and higher capacities than electric models
  • Last twice as long as storage water heaters

Proper installation is key to successful operation of tankless units, which must be sized based on the peak flow capacity. Always use an experienced installer familiar with the specific unit, as well as all combustion air and venting requirements. The amount of combustion air is based on the input Btus of all appliances requiring this air.

Hybrid condensing systems are also becoming more popular; they combine two-gallon storage tank and a heat exchanger into one unit. The size of a small suitcase, these systems are typically self-cleaning, eliminate cold water sandwiching (the cold slug of water left in the line), require only a 1/2 inch gas line and have a 96 percent thermal efficiency. 

Solar water heaters with natural gas back-up circulate water through solar collectors to heat it, storing the hot water in a nearby tank. A natural gas back-up heating system provides hot water when there isn't enough sunlight. The U.S. Department of Energy estimates that a typical solar energy system with gas back-up costs nearly 20 percent less to operate than an electric back-up system of similar size. An ENERGY STAR certified solar water heating system with backup can cut a homeowner's annual hot water costs by half or more.

What's next?

Gas-fired heat pump water heaters (GF-HPWH) are under development, with the hopes of increasing efficiencies even more. First-generation commercial GF-HPWHs are expected to have Energy Factors (EF) of 1.3, with savings of 50 percent. Next generation technologies have been laboratory tested at EF 1.7 or more. The GF-HPWH is expected to save up to 115 therms per year per tank.