When homeowners think about high electricity bills, air conditioning usually gets the blame. During hot summer months, it runs for hours, cooling entire homes and driving up energy use. But in many households, another appliance quietly consumes even more electricity over the course of a year — the water heater.

Unlike air conditioners, which operate seasonally in many regions, water heaters work every single day. From morning showers to washing dishes and doing laundry, hot water is a constant necessity. This continuous demand makes water heating one of the largest contributors to residential energy consumption.

Why Water Heaters Use So Much Power

Heating water requires a significant amount of energy. Whether powered by electricity or gas, the appliance must raise the temperature of cold water to a usable level — often between 120 and 140 degrees Fahrenheit (49–60°C). Maintaining that temperature throughout the day also requires standby energy, especially in traditional tank-style systems.

In many homes, water heating accounts for roughly 15 to 25 percent of total energy usage. In some cases, particularly in larger households with high hot water demand, it can surpass air conditioning in annual electricity consumption.

Long showers, frequent laundry cycles in hot water, and running the dishwasher multiple times a day all increase the load. Even small habits, repeated daily, can have a noticeable impact on energy bills.

The Difference Between Tank and Tankless Systems

Traditional storage water heaters keep a large tank of water heated at all times. While convenient, this design leads to what is known as “standby heat loss.” Even when no one is using hot water, the system cycles on periodically to maintain temperature.

Tankless water heaters, on the other hand, heat water only when needed. This on-demand approach can be more energy-efficient, particularly in households with moderate water usage. However, installation costs are often higher, and performance depends on proper sizing.

Understanding which system your home uses can help determine whether an upgrade would provide meaningful savings.

How It Compares to Air Conditioning

Air conditioning systems consume significant power when running, but their usage depends heavily on climate and season. In colder regions, AC units may operate only a few months each year. Water heaters, by contrast, operate 365 days annually.

Additionally, many modern air conditioning systems are designed with high efficiency standards. Improvements in insulation, programmable thermostats, and inverter technology have helped reduce cooling-related energy consumption. Meanwhile, older water heaters in many homes remain inefficient and poorly insulated.

This combination of constant operation and outdated equipment often makes water heating a larger annual energy expense.

Other High-Consumption Appliances

While water heaters frequently top the list, other major electricity consumers include:

• Clothes dryers

• Electric ovens and stoves

• Refrigerators

• Space heaters

However, most of these appliances operate intermittently. The water heater’s continuous function gives it a unique role in driving up monthly utility costs.

How to Reduce Water Heating Costs

Fortunately, there are practical steps homeowners can take to reduce energy consumption without sacrificing comfort.

Lower the thermostat setting. Many manufacturers set water heaters to 140°F by default. Reducing the temperature to 120°F can significantly cut energy use while still providing comfortable hot water.

Fix leaks promptly. A dripping hot water faucet wastes both water and the energy used to heat it.

Install low-flow fixtures. Efficient showerheads and faucet aerators reduce hot water usage without affecting pressure noticeably.

Insulate the tank and pipes. Adding insulation to older water heaters and exposed hot water pipes minimizes heat loss.

Wash clothes in cold water when possible. Modern detergents are effective at lower temperatures, reducing the need for hot cycles.

Small adjustments like these can lower energy bills over time and extend the life of the appliance.