Tankless water heaters operate only when you need them, resulting in less standby energy loss. The DOE can help you figure outwhether a tankless heater is right for your home.
You can also tap into the power of the sun to supply part or all of your hot water needs. Solar hot water heaters have higher up-front costs than conventional water heaters, but much lower operating costs. Under favorable conditions, they can pay for themselves in energy savings within 4 to 10 years.
Federal, state, local, and utility incentives are available for residential and commercial energy efficiency upgrades, allowing you to reduce costs even more. To find out what’s available in your area, visit the the Database for State Incentives for Renewable Energy.
The American Council for an Energy Efficiency Economy also has a list of energy efficiency ratings for various types of water heaters.
Before you shop for a new water heater, make sure you’ve done everything you can to minimize your hot water use. Installing water-saving fixtures and appliances and insulating your pipes can reduce your water and energy use, allowing you to buy a smaller water heater and further reducing your contribution to global warming. See also ::New Tankless Water Heater Uses Microwaves, ::Cut Your Gas Consumption in Half in One Day, ::Using Evacuated Tubes for Solar Hot Water, ::Home Power's Solar Water Heating Overview, ::Lightweight Solar Water Heater Announced