Smarter water heating in your home

When it comes to home energy use, most people think about turning off lights or adjusting the thermostat, but what about your water heater? It might not be flashy, but it’s one of the biggest energy consumers in your home. In fact, heating water can account for nearly 20% of your home’s energy bills.ⁱ 

Upgrading to a smart water heater gives you more control, better energy management capabilities and a more connected home. With features like Wi-Fi or Bluetooth connectivity, real-time monitoring and compatibility with devices like smart speakers and smart thermostats, smart water heaters bring modern convenience and meaningful energy savings. 

How smart water heaters reduce energy consumption

Traditional tank water heaters maintain hot water 24/7 — even when you’re not using it. This standby power loss leads to unnecessary energy costs. Smart water heaters reduce this by heating water only when it’s needed and giving you more control over heating cycles through apps, timers and sensors.

Heat pump vs. conventional smart options for energy savings

Heat pump water heaters are a dream for efficiency. They draw warmth from the surrounding air to heat your water instead of relying solely on traditional heating elements. This makes them ideal for eco-conscious homeowners wanting to cut back on emissions or those looking to reduce energy costs because they are up to 3 times more efficient than the traditional water heater.

Energy efficiency ratings explained

The Uniform Energy Factor (UEF) is the current standard for measuring water heater efficiency in the U.S., replacing the older rating system, Energy Factor (EF). It accounts for how efficiently the heat is transferred to the water (recovery efficiency), the heat lost from the tank into the surrounding area (standby losses) and energy lost as water circulates through the system (cycling losses). 

The higher the UEF rating, the more efficient the water heater, which will vary depending on the water heater type:

• Gas storage: 0.60–0.90+
  Gas heaters can be less efficient because they lose more heat through the flue (exhaust vent) and standby losses from the tank.
• Electric storage: 0.90–3.0+
  Electric heaters don’t lose heat through a flue; they also convert nearly all electricity into heat.
• Heat pump (hybrid): 2.0–4.0+
  This hybrid water heater uses a heat pump to move heat from the air into the water, rather than generating it directly, which is much more energy efficient.
• Tankless (gas/electric): 0.80–0.99+
  Heats water only when needed, so there’s no standby heat loss.

Energy Star-certified options

You should also look for Energy Star-certified models. Energy Star-rated water heaters meet strict efficiency and performance criteria, often saving 10%–50% more energy than standard models. Smart models with this label may qualify for valuable rebates. Plus, they may easily sync with your energy-efficient appliances and have other smart features like vacation mode, demand response or app-based control.

Choosing the right smart water heater

Not all smart water heaters are built the same. To make the right choice, you’ll need to consider your household’s hot water needs, energy usage and installation space.

Energy usage assessment for your household

Begin with your basics: How many people live in your home? How many faucets, showers and appliances like dishwashers are running each week, and do you have gas hook-ups, or do you need an electric unit? Typically, larger families need a higher-capacity tank water heater, while smaller homes might benefit most from an electric tankless heater option that saves space and energy.

Size optimization for maximum efficiency

More isn't always better. Oversized water heaters waste energy heating extra water, while smaller units can wear out from overuse. The right-sized model ensures efficient heating without unnecessary energy consumption, making both your budget and warranty go further.

Cost vs. energy savings analysis

Smart water heaters, especially premium models like electric tankless units, may cost more upfront, but they can pay off through lower utility bills and reduced maintenance. Add in tax credits, rebates and energy savings over time, and the overall investment can add up.

Key features and benefits

Today’s smart water heaters are packed with tech-focused features designed to improve your comfort and help reduce energy costs.

Innovative features of smart water heaters

Smart electric water heaters come loaded with features that give you full control right from your phone or smart home device.

• Demand response capabilities
  Smart water heater can now be synced with your provider's demand response program to reduce water heating load during peak energy usage periods, which could earn you bill credits or incentives.
• Real-time energy consumption monitoring
  Systems linked to smart home platforms or apps provide exact energy usage, analytics and system status in real time. This allows you to monitor performance, detect unusual spikes and analyze how water temperature choices impact your energy bills.
• Time-of-use plan optimization
  With time-of-use plans becoming more common, your smart water heater can shift heating cycles to cheaper, off-peak hours. This smart control function is an easy way to save without lifting a finger.
• Energy usage alerts and notifications
  If your smart water heater detects that it’s not heating properly or has high energy usage, it will send you an alert or notification so you can catch a potential problem early on.
• Load shifting capabilities
  Systems equipped with load shifting help keep electricity usage balanced by coordinating heating cycles with HVAC, dishwashers and other appliances. It’s a simple, automatic way to avoid overloads and optimize energy distribution in your home.
• Automated energy-saving routines 
  Combine your smart water heater with programmable thermostats, HVAC units or leak sensors that power up or shut down your heater when your routine calls for it.

Maximizing energy efficiency

Whether you're home or away, a smart water heater adapts to your lifestyle to heat only the water you need, when you need it. With a smart water heater, you can benefit from these smart functions that help maximize your energy savings:

• Adaptive learning for energy optimization: Your smart water heater learns your habits and adjusts accordingly.
• Off-peak heating schedules: Smart water heaters let you customize your heating schedules so you only have hot water when you need it.
• Renewable energy integration: If your home uses solar panels, a smart water heater helps absorb excess power by preheating water during high production times, helping reduce dependence on the power grid.
• Standby power reduction: Sleep modes and eco settings kick in while you’re away to keep your energy usage and power costs low.
• Heat loss prevention technologies: Modern tank insulation, fiber-coated liners and heating element placement help maintain your water temperature without re-engaging the entire unit every few hours.

Integrating with your smart home ecosystem

Want a smarter, more connected home? A smart water heater can link up with your home automation system, letting you use voice commands, sync with other smart devices and keep an eye on your energy use.

Installation and maintenance

A smart water heater is easy to love, but professional installation and routine maintenance are essential to help ensure your system runs efficiently year after year.

Getting your smart water heater up and running

Installing a smart water heater isn’t a DIY job. It’s best to hire a plumber to ensure your water heater is installed correctly for safety, warranty coverage and full system efficiency.

• Energy audit before installation
  Ask your installer to complete an energy audit. This helps select the right size and type of smart water heater to match your home’s unique hot water needs.
• Optimizing placement for energy efficiency
  Install your unit in a conditioned space (like utility closets or garages) or insulate the room and avoid locations with ambient cold air to minimize heat loss. It’s also important to measure the area to ensure the water heater has adequate space, which is essential for proper ventilation and reducing fire risk.
• Setting up energy-saving modes
  Once connected to your Wi-Fi, you can activate smart features like Eco Mode, auto-shutdown and temperature control schedules through your phone.

Maintaining your smart water heater

Smart doesn’t mean maintenance-free. Scheduled upkeep helps ensure your unit works like new and can prevent potential energy waste.

• Energy performance monitoring: Use your app to review cycle frequency, temperature performance and historical usage to help you spot issues or turn off the unit if needed.
• Efficiency optimization maintenance: Flush your tank every 6 to 12 months based on usage. Decalcify heating elements to maintain performance and extend system life.
• Updating for the latest energy-saving features: Keep your system updated via firmware releases. These often include the latest upgrades for better energy savings, safety and smart home integration.
• Recalibrating for seasonal energy efficiency: Adjust water temperature based on the season. In summer, dial your setting lower. In winter, increase slightly if needed to maintain flow without wasting energy.
• Preventing energy waste through maintenance: Many smart systems include leak detection and cycle tracking that can help you act quickly if an issue arises.

Making the switch

Upgrading to a smart water heater is a simple way to help lower your energy use, reduce monthly utility bills and support a more sustainable home. Many models may even qualify for rebates or federal tax credits, helping offset upfront costs.ⁱⁱ With long-term savings on energy and maintenance, most smart water heaters pay for themselves in just 3 to 7 years.

Start heating your home with smart technology

Smart water heaters do more than just deliver hot water — they learn your usage patterns to optimize energy efficiency and reduce waste. Unlike traditional models, they offer full control through customizable settings, real-time usage insights and seamless integration with smart home systems. This means greater convenience, smarter energy use and more savings over time.

Whether you’re looking to improve your energy efficiency or reduce your energy usage costs, Reliant is here to help. With personalized energy plans, helpful account management tools and real customer benefits, Reliant makes it easier than ever to bring smart savings and smarter comfort to your home. 

Frequently asked questions 

How much energy do smart water heaters use compared to traditional models?

Smart water heaters save 10%-30% more energy than conventional models by reducing standby operation, scheduling capabilities and improving heat transfer.

How can I tell if my smart water heater is saving me money?

You can view real-time energy usage in your water heater’s app and compare your usage to previous months and monitor your utility bills.

What’s the ideal temperature setting for efficiency?

Most experts recommend setting your water heater to 120°F. It’s hot enough for comfort and safety, but cool enough to avoid energy waste and scaling.

What if my heater isn’t syncing with my smart home system?

If your smart heater isn’t syncing with your smart home system, double-check Wi-Fi access, restart the app and look for firmware updates. If integration still fails, consult the manufacturer or a licensed plumber with experience in smart systems.

Sources:

ⁱhttps://www.energy.gov/energysaver/water-heating

ⁱⁱhttps://www.energy.gov/save/home-upgrades