Which water heaters are more environmentally friendly?

Currently, electric water heaters are the clear last place option in terms of their impact on global warming. This is primarily due to the fact that most electric power currently generated in the United States is produced by fossil fuel burning plants that are only 30-40% efficient.  So, while you are not burning gas at the home, the coal or gas used to produce your electricity has produced a significant amount of greenhouse gas.

Currently, solar water heaters are the best option for those that are environmentally conscious.  However, solar water heaters will still produce some carbon emissions in most cases as most solar systems are “active” systems which require a pump (often powered by electric power) and a backup conventional tank to ensure adequate hot water supply.  

For the average home owner, tankless hot water heating systems offer the best of both worlds in terms of least energy consumption and convenience.  However, in order to realize energy and greenhouse gas emission savings, a new tankless hot water heater user must keep their energy use constant.  If you install a new tankless system and you suddenly start using your Jacuzzi because your old 50 gallon gas tank couldn’t fill the tub – then you are probably not saving much in terms of carbon emissions or energy savings!  But, if you keep your hot water usage constant, you can save over half of your water heating costs and half of your carbon emissions.  Because your venting and gas line must often be retrofitted to accommodate a tankless unit, initial installation costs can be double the cost of installing a conventional unit.  However, much of this comes back in the form of energy savings.  Also, tankless units typically last twice as long as conventional tanks.

For those that are both environmentally and budget conscious, your best bet is to stick with your conventional natural gas (oil or propane) water heater as this is still four times better than a standard electric tank.