There’s no arguing that tankless has become a buzzword among the green community, and it might be tempting to blindly jump on the bandwagon. But don’t discount tank-style water heaters too quickly. Advancements in both electric and gas storage water heaters are offering leaps in efficiency that are putting tank water heaters back on the green radar.

Pumped Up Efficiency

Perhaps one of the greatest advancements has been the integration of HVAC heat-pump technology into electric tank water heaters. The combination of the two technologies can produce efficiency ratings as high as 2.3 EF (Energy Factor), compared to the current minimum efficiency rating for a 60-gallon water heater at 0.89 EF, making them one of the most efficient water heating options available.

Often referred to as “hybrids,” these units are more than twice as efficient as standard electric water heaters and cost less than half the amount of money to operate. By using an Energy Star–rated heat-pump model, the DOE estimates that the average household can save almost $300 per year compared to a standard electric water heater. The units do cost more up front (about $1,200–$1,800), but the payback period is estimated to be only three years. They also can earn three points toward LEED certification, versus two for an electric tankless unit out of a total of six points available for water heating. The National Green Building Standard (NGBS) awards 7 points for heat pump units with a 1.5 EF and a maximum 10 points for 2.0-EF models.

A heat-pump water heater operates like a heat-pump HVAC system, borrowing heat from the atmosphere. An evaporator inside the tank uses refrigerant to absorb heat from the surrounding air and transfers it to a heat exchanger that heats the water inside the tank. Cool air is then expelled into the atmosphere. The tank includes electric heating elements to provide back-up heating if necessary.