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Guide to residential water heaters

Last in line to take your shower, again, and there’s no more hot water? This is one reason you might start thinking about a new water heater. With many options to choose from, it’s important to learn and understand the benefits of different systems.

Between washing dishes, clothes, cleaning the house and showering or bathing, Canadians use an average of 75 litres of hot water at home each day. It’s no wonder water heaters represent 19.3% of total energy used in the average Canadian household. This makes water heaters the second highest energy consumer in the home behind only total home heating. Whether you’re due for a water heater upgrade or you’re looking to reduce your energy use and your carbon footprint, choosing an ENERGY STAR® certified water heater is the simple choice to help you save. Before you buy, be sure to learn about the different models available and choose the right one for you:

Storage tank water heaters (gas)

Let’s start with the system you’re probably most familiar with. Storage tank water heaters are the most common type of water heater found in Canadian homes. These systems always keep the water at a consistent temperature, so hot water is usually available. As hot water flows from the tank out your tap, the tank empties and unheated water flows in until the tank is full again. Then, a thermostat turns on the burner to heat up the water and then maintain the temperature. This means the water heater is consuming energy even when you’re not using hot water. 

Pro Tip: One simple thing you can do to conserve energy is to insulate the hot and cold water pipes within two to three metres of the water heater. An ENERGY STAR certified gas storage tank water heater saves 9% more energy compared to standard gas storage water heater models. 

Solar water heaters

Solar water heater on rooftop

With a solar domestic hot water system (SDHW), you can harness the sun’s energy to heat water. In Canada, these systems are usually configured to generate 60% of the hot water required for the average home, depending on local climate and hot water needs. They are commonly setup to preheat water alongside a backup conventional water heater (electric or gas). Fun fact: since solar water heater systems are usually located outdoors, they typically use closed-loop antifreeze collectors for heating instead of water for year-round use. SDHW systems have a longer life expectancy than other models and ENERGY STAR certified SDHW systems are up to 60% more energy efficient than standard storage water heater models.

Heat pump water heaters

Heat pump water heaters (HPWH) use a technology that makes it possible to capture heat from the surrounding air, and transfer it to heat the water in the tank. In this case, the air captured could be in your basement, utility room and sometimes even outdoors.

Since HPWHs remove heat from the air, you’ll actually need less air conditioning in the summer, but they’re less beneficial in the winter when space heating is required. However, they can be very cost effective in mild climates when compared to conventional storage tank water heaters. An ENERGY STAR certified HPWH uses up to 50% less energy, on average, than a standard electrical water heater.

Tankless water heaters

Tankless water heater

A tankless water heater functions without a storage tank which can save space in your home. It works by heating water as it flows through the system using either an electric element or a gas burner. This way, tankless water heaters essentially provide endless hot water on demand. An ENERGY STAR certified tankless water heater can save you 30% more energy compared to standard storage tank types.
While these systems are typically more energy efficient than storage tank models, their ability to provide a huge amount of hot water needed for multiple applications all at once can be limited. In other words, if your family needs to take multiple showers all at the same time, the demand could exceed what a tankless system can provide.


There’s no ‘one size fits all approach’ when it comes to water heaters so here’s what you need to consider before buying a new one:

  • Size: Assess your needs, every family is different. Tanks come in different sizes and you’ll want to make sure to choose one that will meet your home’s hot water needs. It’s a good idea to consult a plumber to estimate these demands and always hire a licensed professional to install a new one.
  • The upfront costs and long-term gains. In some instances, buying a more energy-efficient model costs more upfront but you’ll recoup that with the long-term energy savings.
  • When you’re ready to take the next step, consult the list of ENERGY STAR participating retailers and manufacturers to find your new water heater.

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