If you're responsible for selecting, installing, distributing, or private labeling gas water heaters, this guide will help you make everyday decisions. Macro combines current energy efficiency targets, the 2024/2025 standards, and site restrictions to provide you with clear choices—helping you select the right technology, choose the right size, pass inspections, and minimize rework.

Who it’s for:

Contractors/installers who need code-aware, practical guidance

Distributors choosing SKUs and advising pros

Private-label/OEM teams benchmarking specs and warranty risk

What “energy-efficient” means for gas water heaters

At trade level, “efficient” isn’t just the nameplate UEF—it’s the combination of high thermal performance, correct sizing, right venting/combustion air, and disciplined commissioning/maintenance. Here are the metrics and standards that matter in 2025.

UEF (Uniform Energy Factor): UEF is the standardized efficiency metric used on modern labels and in programs like ENERGY STAR. It’s defined in federal test procedures under 10 CFR Part 430 and reported in usage “bins” (very small, low, medium, high). Only compare UEFs within the same bin to avoid apples‑to‑oranges mistakes.

Practical meaning of bins: ENERGY STAR’s explainer clarifies that bins reflect test draw patterns; pros should match a model’s bin to the application before comparing UEF values.

ENERGY STAR thresholds (residential): As of mid‑2024, ENERGY STAR’s specification levels target high‑efficiency performance; for example, residential gas tankless requires UEF ≥ 0.95, and gas storage thresholds vary by volume/draw.

DOE standards and 2029 planning: The U.S. Department of Energy’s final rule for consumer gas‑fired instantaneous (tankless) water heaters was published Dec 26, 2024, with the effective date adjusted to May 20, 2025; the compliance date is Dec 26, 2029. The performance levels effectively point the market toward condensing technology in medium/high draw applications.

To stay efficient and future‑proof, expect condensing tankless to be the default where venting and condensate handling are feasible, while efficient storage units remain relevant when peak hour capacity and simplicity dominate.

Technology choices and when to use them

Here’s a quick comparison of the main options, tied to efficiency, installation realities, and maintenance expectations.

Notes:

UEF ranges are orientation only—always verify the exact model datasheet and test bin.

For new builds or major retrofits, condensing tankless is often the most efficient and “code-resilient” choice where venting and condensate routing are practical.

Venting categories and combustion air basics

Venting must follow the appliance listing and installation manual. The industry commonly references categories by pressure and condensation behavior. The cheat sheet below is for orientation—always defer to the model manual and local authority having jurisdiction (AHJ).

Do not assume “PVC is fine”—use only vent materials specifically listed in the appliance manual and allowed by the AHJ. Some jurisdictions limit material choices based on flue temperatures and listings.

Maintain required slope and supports; positive‑pressure systems need careful sealing, and equivalent length (with elbows) must stay within the manufacturer’s limits.

Verify termination clearances and locations early to avoid costly re-routes.

Sizing that preserves efficiency (and avoids callbacks)

Correct sizing underpins efficiency, comfort, and equipment life. Use the right method for the product class.

Tankless: flow + temperature rise

Workflow:

Determine simultaneous demand in GPM (e.g., two showers + a sink).

Calculate ΔT = setpoint – inlet temperature. For example, 120°F setpoint with 50°F inlet → ΔT = 70°F.

Use the manufacturer’s performance curve to find GPM at that ΔT; confirm the model’s input capacity supports the load.

Rule-of-thumb heat estimate:

BTU/h ≈ GPM × 8.33 × ΔT × 60

Example: 6.0 GPM at a 65°F rise → 6 × 8.33 × 65 × 60 ≈ 195,000 BTU/h. That points you toward a top‑tier residential unit (often 180–199k BTU/h), then you verify with the specific curve.

Gas supply check: High‑input models (up to ~199k BTU/h) demand adequate meter capacity and properly sized piping. Use the fuel gas pipe sizing methodology from model codes (longest length method, allowable pressure drop) and verify with the appliance manual.

Manufacturer specifics: Always consult the installation manual for inlet pressure ranges, pipe sizing tables, and equivalent length limits.

Water quality matters: Hard water reduces heat transfer and flow; plan for softening or scale reduction and set realistic maintenance intervals .

Storage: First Hour Rating (FHR)

For tanks, size by peak‑hour hot water demand and select a model with an appropriate First Hour Rating. FHR is defined in the same federal test procedure that governs UEF; see the legal test basis in the eCFR Part 430 Appendix E. Combine FHR with recovery rate (BTU input) when loads are sustained.

Recirculation, mixing, and anti‑scald

Recirculation can stabilize delivery temperatures and reduce wait times but adds heat loss; use smart/ECM pumps and controls, insulate lines, and confirm return connections per the manual.

Use thermostatic mixing at the point of use or centrally to balance comfort, efficiency, and scald protection; follow code and manufacturer guidance.

Universal code and safety anchors

Local codes differ, but these universal anchors help you frame compliant designs before the AHJ walk‑through:

Combustion air: Confirm method (indoor volume, two‑pipe outdoor air, engineered) and duct sizing/terminations. The ICC’s combustion air CodeNotes (2024) is a concise refresher; then defer to your model manual and local code text.

Venting: Match the category, materials, slope, supports, and equivalent length to the manual; positive‑pressure systems need listed joints and careful sealing.

Relief and expansion: Provide a correctly installed T&P relief valve discharge; in closed systems, include an expansion tank sized for temperature/pressure and local code.

Electrical and condensate: Many high‑efficiency units require a 120V circuit and a code‑compliant condensate drain/neutralizer with freeze protection where needed.

When in doubt: Follow the appliance listing and manual, document your design assumptions, and check with the AHJ before rough-in.

Installation and commissioning

A disciplined start‑up locks in efficiency and warranty protection. Here’s a field‑tested checklist I use.

Commissioning checklist:

Venting done right: Confirm category IV materials as listed, slope and supports per the manual, equivalent length within limits, and terminations clear and located per the diagram.

Condensate: Install a neutralizer sized for expected condensate, maintain continuous fall, prime traps, and protect against freezing.

Gas supply verified: Confirm meter capacity, line sizing, and inlet pressures (static and dynamic) with other appliances running. Record readings. Cross‑check ranges in the model manual.

Water side: Flush debris, clean inlet screens, verify isolation valves, and set the mixing/tempering strategy.

Setup and tuning: Set gas type (NG/LP), altitude parameters if applicable, target setpoint, and run built‑in diagnostics. Perform combustion analysis if required by the manufacturer.

Documentation: Capture serials, vent materials, equivalent lengths, gas pressures, and commissioning readings; leave O&M documentation and maintenance schedule with the owner.

Common failure points to avoid:

Undersized gas lines leading to low dynamic pressure and ignition faults

Over-length or poorly sloped vents causing condensate pooling or lockouts

Missing neutralizer media or clogged drains, resulting in corrosion or leaks

Skipped flush/filters, causing early heat exchanger fouling

Maintenance that preserves efficiency

Condensing units deliver top efficiency only if they’re kept clean and within spec.

Recommended cadence (always defer to the specific manual):

Descale/flush: In hard water areas, 6–12 months; in very hard water, consider 4–6 months. A practical how‑to and interval discussion is in Navien’s guidance: see the Navien descaling overview (2023).

Filters and screens: Clean inlet water screens and any air filters 3–6 months or as needed.

Condensate neutralizer: Inspect annually; replace media per manufacturer; ensure free drainage.

Venting and air: Annual inspection for blockage, damage, or joint issues; verify terminations remain clear.

Professional service: Annual check by a qualified tech; maintain a log of maintenance actions and readings.