Another detail to look for on gas water heaters is emissions. While only California has ultra-low NOx requirements (emission levels of less than or equal to 10 nanograms of nitrogen oxides per joule of heat output), some manufacturers are finding a cost benefit in manufacturing several of their units at low NOx rates. There are also several propane-fueled (LP) models available for builders who don’t have access to natural gas. The Propane Education & Research Council claims that LP water heaters are a greener option compared to electric water heaters. “Even though there aren’t any emissions from an electric water heater at the home site, there is a lot of coal being burned to make that electricity,” says Tom Jaenicke, energy advisor to the council.

Setting a New Standard

While tank-style units have certainly come a long way, they do have their limitations. When not in use, they produce standby losses, and, of course, they can run out of hot water. Tankless models address both of those issues, but they offer their own set of drawbacks. Tankless units have a longer payback period (15 to 20 years), and they don’t have stored capacity for high-demand periods. They also have minimum and maximum flow rates, which is especially challenging as more green homes adopt low-flow faucets and shower fixtures.

With shortcomings on both sides, it’s easy to see why manufacturers are now starting to come out with a new form of hybrid: tankless units with small storage tanks. They operate like a tankless unit, but a small buffer tank allows them to overcome some of the negative attributes normally associated with tankless models like minimum flow rates or “cold water sandwiches.” By capitalizing on the strengths of both tankless and storage water heaters, these units can reach efficiencies of up to 90%. However, because they represent a new water heater category, they do not yet qualify for Energy Star, LEED, or NGBS points.

Needless to say, this is an exciting time for the water heater industry. Innovation is at its peak and doesn’t show signs of leveling off anytime soon. A new federal rulemaking has required that as of April 16, 2015, newly built electric tank models with volumes of 55 gallons or greater achieve an EF of 2.05—an efficiency level that isn’t possible without heat-pump technology. Similarly, the ruling calls for gas tank models with volumes of 55 gallons or greater to have an EF of 0.8012, which requires gas-condensing technology. “The 2015 standards will change the way people look at large water heaters above 55 gallons,” notes Tommy Olsen, a senior product manager at Rheem.

While meeting the new standards will certainly require a lot of work on behalf of manufacturers, it’s good news for contractors. With a vast array of greener water heating options—including solar thermal—specifiers no longer have to rely on trends, but instead can choose a high-efficiency model that truly fits their needs.