Choosing a New Water Heater: Don’t Wait for an Emergency to get the Best Fit


Oregon tax credits are available for the most efficient units

Water heaters are one of those things most of us take for granted. For years on end, they quietly provide for soothing showers and squeaky-clean dishes. If your water heater begins to underperform or stops working altogether, you’ll no doubt want to replace it right away. However, it’s worth taking the time to do some research and replace your water heater with one that does its job in the most efficient way possible.

Below are things to keep in mind when shopping for a new water heater.


  • Go for efficiency: The greater the Energy Factor, the more energy and money it will save. The Oregon Department of Energy recommends an Energy Factor of at least 0.67 for all water heaters except heat pump water heaters, which should have a minimum EF of 1.8.
  • Look at options based on fuel type: Electric or natural gas.
  • Choose the right size: In most cases, a 50-gallon electric water heater or a 40-gallon gas water heater is appropriate. You can get by with a slightly smaller gas water heater because it heats water fast.
  • Look for incentives from your utility, Energy Trust, and tax credits from the Oregon Department of Energy.


“With incentives and tax credits, the cost of a higher-performing unit is sometimes better than a lower-performing unit,” says Roger Kainu of the Oregon Department of Energy.

Most manufacturers make standard models as well as “improved” and “premium efficiency models.” The improved models can typically reduce water heating bills 10 percent. A few premium efficiency systems can save 20 to 40 percent.

Higher efficiency water heaters may also be eligible for an Oregon tax credit. Read on for general information. To find detailed specifications, visit:



Water Heaters That Qualify for an Oregon Tax Credit

Natural Gas or Propane Tankless Also known as instantaneous, point-of-use, or on-demand water heaters, these heat water as needed. The units are compact and last longer. However, because some smaller models heat only 2.5 to 3 gallons per minute, they may not be able to meet a heavy load such as a shower and clothes washer at the same time. While they are highly efficient, they are also considerably more expensive.

Natural Gas Storage Storage water heaters are a popular choice for homes. The heaters store water in a tank, so hot water is always ready.

Electric Heat Pump These use electricity to extract heat from the surrounding air into a water tank, instead of generating heat directly. Heat pump water heaters use about half as much electricity as electric water heaters, but are more expensive.

Solar Use of solar water heaters can reduce water heating bills by about 50 percent, mostly in the spring, summer, and fall. You still need a regular water heater for night-time and cloudy day use, especially in winter.

Want More Help? Contact Roger Kainu, ODOE energy efficiency specialist, at 503-580-7469 or via email at