Water heating may not always be top of mind, but it’s one of the biggest contributors to your household’s energy use. In fact, water heating is the second-largest energy expense in most homes, accounting for about 18 percent of the average utility bill, according to the Department of Energy. Making the switch to a more efficient water heater can make a significant difference for your energy bills and the environment.
Ready to make the switch, or just curious about your options? The NHSaves® utility partners have a variety of resources available for Granite Staters to thoroughly explore efficient water heating options, lower monthly energy use, and take advantage of available incentives.
Heat Pump Water Heaters: Smart, Efficient, and Cost-Effective
Heat pump water heaters use advanced technology to deliver hot water more efficiently than traditional models. Instead of generating heat directly, they use electricity to pull heat from the surrounding air and transfer it to the water tank. This process is similar to how a refrigerator works, but in reverse. According to the Department of Energy, heat pump water heaters can be up to four times more efficient than standard electric water heaters and may use up to 70 percent less energy.
Best for:
- Homes with unconditioned basements, garages or utility rooms
- Savings: Significant reductions in monthly energy bills
Ready to upgrade? Learn more about available incentives on heat pump water heaters from participating utility partners here.
Tankless Water Heaters: Hot Water On Demand
Unlike conventional models, tankless water heaters provide hot water only when you need it. They heat water instantly, eliminating standby heat loss. Best for:
- Homes with limited space or lower simultaneous hot water needs.
- Options: available in both electric and gas models.
- Benefits:
- Long lifespan (20+ years)
- Compact design
- No standby energy loss
For even greater energy savings, condensing tankless hot water heaters are available. These systems utilize two heat exchangers to deliver a continuous supply of hot water whenever a faucet is opened. This design is more efficient and cost-effective than conventional water heaters because it eliminates the need for constant reheating.
Depending on your fuel type, these units may qualify for incentives through the NHSaves utility partners. See if you’re eligible and learn more here. Take advantage of federal tax credits for energy-efficient home improvement upgrades available through December 31, 2025.
High-Efficiency Storage Water Heaters
If your home uses gas, oil or propane, upgrading to a high-efficiency storage water heater can help reduce energy use. These models feature better insulation, advanced burner design and built-in heat traps to minimize heat loss.
Best for:
- Homes already using gas, oil, or propane that want a more efficient option.
- Incentives may vary by fuel type and your utility partner.
How to Choose the Right Water Heater for Your Home
The right choice depends on your household’s needs and priorities. Consider the following when exploring your options:
- Fuel availability: Do you currently use electricity, natural gas, oil or propane?
- Household size and hot water usage: Larger households may benefit from higher-capacity storage tanks or hybrid systems
- Installation location: Heat pump water heaters perform best in unconditioned spaces with sufficient airflow
- Upfront vs. long-term savings: Tankless units often cost more upfront but last longer and save energy over time
Not sure where to start? Scheduling a home energy audit can help identify the best fit for your home and also help you uncover additional energy-saving opportunities.
Upgrade Smartly. Save More.
Efficient water heating is one of the easiest ways to reduce energy use at home. With support from the NHSaves utility partners, New Hampshire residents can reduce energy bills, minimize environmental impact and enjoy reliable hot water every day. Explore your options and prepare to save energy here.