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Measuring Water Heater Efficiency and Estimating Operating Cost

Did you know that in addition to delivering discount heating oil, Pay Less For Oil also offers HVAC services? Pay Less For Oil is a subsidiary of Fuel Services, Western Massachusetts’ and Northern Connecticut’s leading full-service home comfort provider. As a Pay Less For Oil customer, you have access to an experienced team of technicians that can assist with tune-ups, installations, and even energy efficiency evaluations on your heating and cooling equipment, such as central and ductless AC units, boilers, furnaces, and even water heaters.

Our knowledgeable technicians can help you determine your current water heater’s efficiency, and if it’s time to upgrade, through metrics like the Energy Factor. Energy Factor (EF) may sound like the name of a prime time television program, but it’s actually a metric used to measure a water heater’s efficiency based on the amount of hot water produced per unit of fuel consumed in a day. Energy factor takes into account:

  • Recovery efficiency – the efficiency at which the heat from the energy source is transferred to the water
  • Standby losses – The percentage of heat loss per hour from the stored water compared to the water’s heat content
  • Cycling losses – The loss of heat as water circulates through the water heater tank and/or pipes


Through Fuel Services, we can calculate your energy factor using one of these formulas:

Gas and Oil Water Heaters
365 x 41045 ÷ EF X Fuel Cost (Btu) or 365 x 0.4105 ÷ EF X Fuel Cost (therm)

Electric Water Heaters
365 x 12.03 kWh/day ÷ EF x Fuel Cost ($/kWh)

The higher the water heater’s energy factor, the more efficient it is.

The Department of Energy (DOE) test procedure for hot water heaters – the basis for the energy usage per day in the above equations – assumes a hot water temperature of 135°F, an incoming water temperature of 58°F, and a total hot water production of 64.3 gallons per day (the average usage in a household of three).

Higher energy factor values don’t always translate to lower operating costs, however. It’s important to consider size (a water heater that’s too big will result in higher heating bills while one that’s too small won’t provide enough hot water), first hour rating (the number of gallons of hot water the water heater is capable of supplying per hour) and fuel type.

Installation and maintenance costs will also vary, so be sure to give us a call when weighing your water heating options.