Electric heaters are more efficient than gas units, but take longer to heat water. Electrical units also cost more to operate. Efficiency means a greater percentage of energy is applied to making heat rather than going to waste. Blow says the ability of a water heater to heat water quickly is important. Gas units can heat a full 75-gallon tank in one hour.
Electric units take as long as three to four hours to heat a full tank.
New model water heaters convert about 75 percent of their energy into heat, up 10 points in the past five years. Blow says it is not necessary for homeowners to wrap heaters with insulation, a dangerous practice if insulation restricts airflow to the heater. Manufacturers now use at least 1 inch of foam insulation inside the heater to keep water hot. Efficiency is more than insulation. Heat traps prevent buoyant hot water from escaping out the top into pipes.