Few homeowners realize it, but after home heating and air conditioning, it's your hot water heater that poses the largest energy drain in your home, making it an excellent area to focus on if you're interested in going green. Whether you're looking at replacing that old dinosaur in the pantry with a new, energy-efficient unit, or just looking for some green ways to improve the efficiency of the unit you already have, here's a few suggestions from ServiceMagic on how you can make sure your hot water is as green as possible when you turn on the faucet.

Going Green with David Johnston
ServiceMagic understands that it can be tough for homeowners to wade through all the "green" remodeling information out there, which is why we've teamed up with green remodeling expert David Johnston to provide you with the best, most accurate, green remodeling advice in the business. David Johnston is the founder of the green consulting firm What's Working, Inc., the author of multiple books on green remodeling (including the Nautilus Award winner Green Remodeling: Changing the World One Room at a Time), and he happens to know a thing or two about what you can do to green your home hot water heating. That said, here's a guide to going green in the hot water department, drawn from the experience, wisdom, and writings of Mr. Johnston himself.

The Cost of Going Green with Hot Water Heating
We'll get to specifics in a minute, but for starters let's address what's on most homeowners' minds when the subject of green remodeling comes up: cost. With hot water heating, how much you end up spending is largely a matter of choice. You can spend more upfront by installing a new, energy-efficient hot water heating system, or you can keep your costs down by upgrading the water heater you currently have. If your current hot water heater is starting to sprout a few gray hairs, upgrading to a new system is likely to pay for itself in a few short years. And if you take measures to improve the energy efficiency of an older unit, you've got nothing to lose. Either way, you stand to significantly reduce energy use (and costs) associated with heating water in your home.

The True Value of Going Green with Hot Water Heating
Of course, putting a dent in your monthly utility bills is only the tip of the iceberg. Johnston is quick to point out that the real value of going green is far higher than any calculations involving dollars and cents. For example, by reducing your home energy consumption, you'll also be drastically reducing the amount of greenhouse gases that are released into the air as a result. When you look at it that way, greening your hot water heater is as much about passing a better world onto your children and grandchildren as it is about you saving a buck or two on your utility bill— and that's worth far more than any bottom line.

David Johnston's Tips on How to Save Money with a New Hot Water Heater
So, just what can you do to start saving money and the environment when it comes to hot water heating? Here's a list of ideas to get your gears turning, starting with Johnston's suggestions for how to go green with a new hot water heating system.

• Purchase a High-Efficiency Water Heater—Referred to as a heater's energy factor, or EF, water heater efficiency is measured by calculating the amount of fuel energy that eventually comes out of the tap as hot water. High-efficiency gas fired water heaters top out with EF ratings of .62 or higher, while a high-efficiency electric heater can attain EFs of .96 and better. In general, the higher EF rating you can afford, the better, if you're looking to cut home energy costs.
• Install a Sealed-Combustion Water Heater—Sealed combustion water heaters provide outside air for combustion rather than using indoor air. They eliminate the possibility of harmful carbon monoxide gas backdrafting into your home, and they cut energy costs, since they don't waste heated or cooled indoor air during the combustion process.
• Install a High-Efficiency Electric Resistance Storage Water Heater—Compared to fossil fueled water heaters, electric resistance water heaters are more efficient, easier to install (no venting required), and eliminate the risk of backdrafting. Many are also better insulated and retain standby heat better than gas or oil burning alternatives. They will always cost more to heat water, however.
• Install a Tankless Water Heater—Fifteen percent of the energy loss experienced by most hot water heaters comes after the water is heated and is sitting in the tank waiting to be used. A tankless water heater heats water on demand, eliminating this form of energy loss and reducing hot water energy costs by as much as 20 percent. Even better, tankless units tend to last five to 10 years longer than traditional models, saving you money with less frequent replacements.
• Install a Heat Pump Water Heater—Heat pumps move heat from the surrounding air into the water for more efficient water heating. They can reduce energy costs as much as one-third to one-half when installed alongside an electric resistance water heater, though they work best in hotter climates and will need a backup for when the mercury drops.
• Install a Combined Hot Water and Heating System—Also called an indirect system, these water heating systems are installed onto an existing boiler system or a heat pump system, allowing you to heat water while you heat your home. Since you're killing two birds with one stone, you can reduce energy costs if your current system is compatible. If you have a high-efficiency boiler or heat pump already set up, this is the most efficient water heating system in the business.
• Go Solar—Solar water heating is the greenest option in the books. It uses clean solar energy (no greenhouse gases!) to heat the water, producing almost no harmful environmental side effects. And after an initial payback period of four to eight years, the next 15 to 40 are as close to free of charge as hot water heating gets.

David Johnston's Tips for Improving an Existing Hot Water Heater
Replacing your existing water heater with a new one is going to get you the biggest results when it comes to energy savings, but if you're on a budget or your present heater isn't old enough to justify replacement, there are other options. Here are David Johnston's suggestions for going green with the water heater you already have.

• Install Hot Water Jacket Insulation—Installing a simple insulated water heater jacket can reduce energy use attributed to heating water in your home by 25 to 45 percent. Since an average insulation jacket runs just $10 to $25 at your local hardware store, this upgrade will pay for itself in as little as a year.
• Install Heat Traps—Heat traps are simple, one-way valves that prevent cooler water in your pipes from settling back into your hot water tank, reducing standby heating loss by as much as 25 to 45 percent. They're easiest to install when you replace your heater, but they can be installed anytime.
• Install a Timer on Your Hot Water Heater—By installing a timer that shuts down your water heater during periods when it's not in use, you'll prevent your hot water heater from running around the clock to heat water when it's not necessary.
• Set Your Hot Water Heater to 120 degrees—Most households have their hot water heater temperature set too high, which is a safety hazard and a waste of energy. Turn your heater down from a typical 160 degrees to a more reasonable 120 degrees, and you'll enjoy water heater related energy savings of 5 to 10 percent.
• Install Energy-Efficient Appliances—Energy-efficient washing machines and dishwashers use as little as half of the water as older models, reducing hot water draws accordingly and saving you money.

Which Shade of Green is Right for You?
While thinking green when it comes to hot water heating is a smart choice for your pocketbook, your home, and the environment, it's not unusual for homeowners to feel a little overwhelmed when presented with the full scope of green remodeling options. If you're feeling unsure about how green you're willing to go with your hot water heating system, there's no need to worry. Going green is not an all-or-nothing proposition, and the truth of the matter is that any step you take in a green direction is a smart one, whether you put up $10 for an insulated water heater jacket, or spend a few thousand dollars on a new solar water heating system.

If you think green is the right choice for you, talk with your contractor about adopting a green remodeling philosophy, find a contractor who specializes in green building and remodeling, or seek out the services of a green consulting firm so you can be sure that your hot water heating system is as green as they come.