Your Minneapolis, MN, home relies on your water heater for essential daily tasks like showering, cooking, and washing dishes. While a well-functioning water heater offers convenience and comfort, an inefficient one can drive up your monthly utility bills.

As your water heater ages, issues such as sediment buildup, worn-out components, or other malfunctions can reduce its efficiency, making it work harder to do its job. This leads to higher energy consumption and unnecessary costs. Recognizing the signs of inefficiency can help you address the problem before it starts affecting your budget.

1. Spotting Leaks

Leaks in your water heater can occur for several reasons, and they are a clear sign that your system isn't functioning at its best. If your water heater is old, corrosion can compromise components like the tank or the cold water inlet and hot outlet pipes. Even newer water heaters can experience issues like loose connections, damaged valves, or other wear and tear that can lead to leaks. Leaks are not only a sign that your water heater is in poor condition, but even small ones directly contribute to inefficiency.

A leaking water heater requires more energy to maintain the water temperature in the tank because it must cycle on and off more often throughout the day to compensate for the loss. This increased energy consumption leads to higher utility bills. Over time, the cost of running a leaking water heater can add up significantly.

If you notice a leak, it's important to address the issue promptly. In some cases, a simple repair may be all that's needed, such as tightening a loose connection or replacing a damaged valve. If the major components of your water heater, such as the tank, are still in good condition, you can avoid an immediate replacement. A professional plumber can advise you on whether repair or replacement makes the most sense.

2. Water Heater Age

Water heaters typically last for 10 to 12 years for traditional tank-style units. However, tankless water heaters can last up to 20 years with proper maintenance. The time frame may be a little longer if you've kept up with routine maintenance and repairs over the years. However, even with yearly maintenance, a water heater will lose its efficiency as time goes on. This is due to normal wear and tear on its internal components and the tank.

If your water heater is over 10 years old, it's wise to start planning for an upgrade. While you may still have some time left before it completely fails, preparing ahead allows you to research the best options for your home. It will also allow you to schedule a convenient time for the installation rather than dealing with an emergency replacement.

Additionally, modern water heaters are much more efficient than those manufactured even a few years ago. ENERGY STAR®-certified models can reduce energy use by up to 30% compared to older models. They incorporate technology like improved insulation, energy-efficient burners, and smart temperature controls to minimize energy waste. These features help defray installation costs over time by significantly reducing monthly utility bills.

3. Frequent Repair Needs

Occasional repairs are a normal part of water heater maintenance, but frequent and ongoing issues are a sign of a larger problem. If you find yourself regularly calling a professional and spending significant money on repairs, replacing your unit may be more cost-effective. Continuing to invest in an aging or failing system can quickly add up, making a new water heater a smarter long-term choice.

A professional plumber can help you decide whether a repair or a replacement is a better option. In general, they will recommend an upgrade if a repair will cost more than half of what a new system would. If you need a replacement, the good news is that many utility companies and government programs offer rebates and incentives for upgrading to a more energy-efficient model.

Homeowners should check local utility programs or ENERGY STAR’s rebate finder to see what savings are available in their area. These savings can help offset the installation cost, making the switch to a new water heater a worthwhile investment for your home and your wallet.

4. Increases in Utility Bills

Many homeowners pay their utility bills each month without closely examining the details. However, regularly reviewing your bills can help you spot trends in water, electricity, or gas usage. If you notice a gradual increase in these costs without a clear explanation, your water heater could be the culprit.

Hard water can also contribute to increased energy costs by causing sediment buildup inside the tank. This buildup forces the water heater to work harder, using more energy to maintain the desired temperature. Homeowners in areas with hard water should consider regular flushing of their tanks or investing in a water softener to improve efficiency.

A professional plumber can diagnose and fix your water heater when you notice these higher energy bills. For instance, they can replace a failing thermostat to improve temperature regulation or flush sediment buildup from the tank to restore optimal performance. A quick visit by a professional can often save you significant money on monthly energy costs.

5. Struggling to Keep Up With the Demand

A drop in water heater efficiency not only drives up utility costs but can also leave your household without enough hot water to meet daily needs. If your system typically provides adequate hot water but you've recently noticed it running out more quickly, this could indicate underlying issues.

These problems may stem from worn parts that a professional can easily replace. However, in some cases, it could signal that your water heater is nearing the end of its lifespan and may need replacement to keep up with your family's demands.

Maintaining Water Heater Efficiency

No matter the age of your water heater, regular maintenance and simple adjustments can help keep it running efficiently, saving you money on utility bills and extending its lifespan. A professional tune-up is key to maintaining your water heater's performance. During a maintenance visit, a technician will inspect critical components such as the thermostat, heating elements, and valves, ensuring everything is working optimally.

This proactive service can catch issues early, preventing costly repairs down the line and ensuring your system is running as efficiently as possible. During their visit, a professional will also check the pressure valve and other features to ensure your water heater runs safely.

In addition to professional maintenance, homeowners can take several steps to improve water heater efficiency. Insulating your water heater tank to reduce heat loss reduces the energy required to keep stored water hot. According to the Department of Energy, adding an insulation blanket can reduce standby heat loss by 25%–45% and save 7%–16% annually on water heating costs. Also, foam tubes can be used to insulate the pipes that carry hot water through your home. They usually come with a slit in them so that you can easily slide them over your plumbing.

You should also check the thermostat setting on your water heater. The Department of Energy recommends lowering it to 120 degrees Fahrenheit because this setting is energy-efficient and adequate for most household needs.

Contact the Experts

Our plumbers at Benjamin Franklin Plumbing® have been serving the Northern Minnesota area for years. We install, maintain, and repair water heaters. Additionally, we can help with all your other plumbing needs, including water softener installation, pipe repair, and more. We would also like to invite you to join our Plumbing Club. Members get an annual plumbing health and safety check, along with a 10% discount on repairs and more!

Contact us today to schedule a water heater appointment with one of our experienced plumbers.