Skip to main content

How to Save Money on a New Water Heater

4 minute read

By Heather Fishel

When your water heater goes out, you need a replacement – and you need one quickly if you want to keep enjoying hot water at home. Unfortunately, a water heater is an expensive purchase, and it’s one you don’t want to make too quickly. Search online to find new water heaters at affordable prices, or with the latest offers and sales.

It is possible to save money on a new water heater, but you’ll need to know how to find savings and deals. Water heaters are always in demand, which means you’ll need to do some research in order to find a lower price. However, with an online search, you can compare water heaters at any price point.

Minerva Studio / Shutterstock

You can also save money on the purchase of a new water heater with these tips.

Replace Your Old Water Heater With a Similar Style

When you’re shopping for a new water heater, you’ll save money if you choose to replace your old model with a new one that’s of the same style. Your most economical option is to pick a water heater that also uses the same fuel source.

As long as your previous water heater was meeting your needs, you’ll have no problem choosing a similar kind for your new model – and you won’t have to make any major changes.

Opting for an all-new style of water heater can increase your costs. A different type might require changing the fuel source, which will come with extra expenses. It might also require retrofitting, which means you’d need to pay for construction wherever the water heater will be installed. There may also be extra costs like permits for any construction or installation, upgrading to meet current building codes. In the end, this can almost double the price you pay.

Instead, stick with the same type of water heater and you can keep your costs minimal.1

Choose the Most Efficient Option

If you want to save money on your water heater, opting for an energy-efficient model can really pay off. While newer, more energy-efficient water heaters might seem more expensive up front, they can offer the biggest financial savings in the long run.

Look at the price of the water heaters you’re considering, and then take a look at the Energy Guide on each. This yellow tag will tell you how much a given water heater will cost to operate each year – or how much money you’ll wind up spending to heat your water. The water heaters with the highest efficiency will also have the lowest operating costs, which will help you save money on your utility bill each month.2

Take Advantage of Rebates

There’s another perk that can come with choosing an energy-efficient water heater. It may make you eligible for rebates and incentives.

Local governments and utility companies may offer tax credits, rebates, and incentives for customers who purchase qualifying energy-efficient water heaters. You could get money back on your purchase or discounts or credits on your utility bills. Check to see if any water heaters qualify for these rebates before buying.

Additionally, some states also offer tax credits if you have a more efficient water heater installed in your home. This means you could potentially save on the water heater itself, your energy costs throughout its lifespan, and any installation costs.

Make Your Water Heater Use Less Energy

Along with shopping for an affordable, cost-effective water heater, it’s also a good idea to consider how you can lower your water heater costs overall. Simply using your water heater as you need hot water throughout your home can drive up your utility costs. Over the course of the year, that can leave you paying a lot of money.

However, there are a few ways you can lower your energy costs each time you use your water heater.

Insulate Your Water Heater

You can actually insulate your water heater just like you insulate the walls of your home. Wrapping this appliance in an insulated blanket can also help it work more efficiently too. With insulation, a water heater will lose less energy and less heat, keeping water hot while it’s sitting in the tank. You can save between 15 and 30 percent of the energy a water heater typically loses this way.

Turn Down Your Water Heater’s Thermostat

Another way to save is by adjusting your water heater thermostat. Set it to a lower temperature, and you could reduce your operating costs by three to five percent. It’ll require your water heater to use less power, and the water won’t be heated as much. Worried it’ll affect you too much? You can turn your water heater down by just 10 degrees to see results.

Choose Cold Water for More Tasks

Lastly, you can save money and lower your water heater’s energy consumption simply by using it less. There are a ton of different ways you can use cold water more often – and you don’t have to start taking cold showers. Instead, save some money by using cold water for tasks that don’t really require hot water. You can wash your clothes in cold water and save up to $160 per year, for example. You can brush your teeth with cold water, rinse items in cold water, and more.3

Whether you’re buying a new water heater or trying to save with your current water heater, there are plenty of opportunities to spend less. Your best bet is to search online. You’ll find water heaters, offers like rebates and incentives, and even tips on saving energy while using your hot water heater.

Heather Fishel