In April 2015, the United States Department of Energy instituted new regulations designed to improve the efficiency of new water heaters. If you are in the market for a new water heater, these changes may initially cost you more money; but this should be offset by lower operating costs.

The new efficiency standards apply to all water heaters manufactured after 2015. The rules impacting manufacturing, testing, heater design, installation, and distribution are meant to improve the energy factor, also known as EF, that determines the efficiency of a conventional, tankless, or heat pump water heater.

The energy factor is a measure of the amount of hot water produced in relation to the amount of fuel consumed during an average day. A higher energy factor means a more efficient unit. The energy factor takes into consideration recovery efficiency, standby losses, and cycling losses.

• Recovery efficiency looks at how efficiently heat is transferred from the energy source to the water.

• Standby losses apply to water heaters with tanks. It is the percentage of heat that is lost in an hour from the stored water in the tank compared to the water’s heat content.

• Cycling loss refers to the heat that is lost as the water circulates through the tank and the inlet and outlet pipes.

It is important to note that a high energy factor does not always correlate to lower operating costs. You also have to consider the cost of the fuel source in your area.

The new guidelines vary depending on the volume, overall size, and fuel source of the water heater. New gas and electric water heaters are required to have more insulation to prevent heat loss. This means that most new tanks will be taller and bigger around. This could cause an issue if your current tank is situated in a tight space. The improved insulation means that using a water heater blanket is generally not necessary unless you have an electric water heater located in an especially cold environment. Blankets should never be used on gas water heaters because they create a fire hazard.

In addition to the cost of the water heater and installation, you may also have to budget for modifications to the space or find another location for the unit, which can mean additional plumbing costs. If you purchase a water heater with a capacity of more than 55 gallons, you will likely have to switch out existing metal pipes for PVC pipes.

New water heater models may be more complex, which can mean that do-it-yourself installation is not feasible. This means paying for professional installation services. Retailers and wholesalers also have to get their technicians up to speed on the new models. This entails additional employee training that further increases the cost of installation.

The water heaters currently being offered by retailers comply with the Department of Energy’s new guidelines. You can anticipate that the new regulations will add anywhere from $100 to $200 to the sticker price of a new water heater, but lower operating costs should allow you to recoup the increased cost over the life of the unit. You may want to take the opportunity to upgrade to an on-demand tankless water heater, but you should be prepared to pay significantly more at the outset. The average 30-gallon conventional electric water heater costs around $300 compared to $700 to $1,500 for a tankless model.

The new guidelines should not impact how you inspect or maintain your water heater; however, you should review the manufacturer’s recommendations carefully.