How Electric Water Heaters Work - and How to Use Them Efficiently and Safely

Electric water heaters use immersed resistance elements and thermostats to heat water in an insulated tank. Typical U.S. households spend about 17% of their energy on water heating. For efficiency, set thermostats to 120°F, insulate the tank and pipes, consider timers or smart controls, and weigh heat pump models for significant energy savings. Install and maintain a T&P relief valve, check the anode rod, and use an expansion tank in closed systems.

How an electric water heater works

An electric water heater stores hot water in an insulated tank and uses one or two immersed electric heating elements controlled by thermostats. Most residential tank-style units have two vertically arranged elements and thermostats: a top element that heats the upper portion of the tank and a lower element that heats the remaining water. The thermostats alternate so only one element runs at a time; the top element restores hot water at the outlet first, then the bottom element heats the rest when needed.

Energy use and sizes

Water heating is a major household energy use. In the U.S., water heating typically accounts for roughly 17% of residential energy consumption. Electric tank heaters come in common sizes from about 20 to 80 gallons; 40- and 50-gallon tanks are typical for families.

If you are replacing a unit, consider a heat pump water heater (hybrid) for much higher efficiency - these use electricity differently and can cut energy use for water heating compared with standard resistance elements.

Efficiency tips

• Set the thermostat to 120°F (49°C) for most households. This balances energy savings with scalding prevention and is the Department of Energy's recommended setting for efficiency.

• If you have occupants with weakened immune systems or a Legionella risk concern, maintain a higher tank temperature (for example, 140°F / 60°C) and pair it with a thermostatic mixing valve at the tap to prevent scalding.

• Insulate the tank and the first few feet of hot and cold piping to reduce standby losses.

• Use a timer or a smart controller to reduce heating during predictable periods of low or no demand. In many homes, setback schedules or demand-based controls cut wasted standby heat.

Maintenance and safety

Install a Temperature-and-Pressure (T&P) relief valve on every tank-style heater. The T&P valve opens to discharge water if pressure or temperature rises to unsafe levels. Route the discharge pipe to a safe drainage point and check the valve periodically.

Other common maintenance items include replacing the sacrificial anode rod every few years to slow tank corrosion and flushing the tank annually or as recommended to remove sediment that reduces efficiency.

For closed domestic systems with backflow prevention, an expansion tank can relieve pressure from thermal expansion.

Choosing the right system

Choose a size based on household hot-water demand (showers, dishwashers, laundry). Compare operating costs, not just purchase price: electric resistance tanks are simple and reliable, while heat pump water heaters and high-efficiency gas models can lower long-term energy use depending on local fuel prices and climate.