Unlike most other appliances, there are not huge differences in water heater efficiencies, if you stay withing type. What I mean is that most electric water heaters have about the same efficiency, most gas models are similar to each other, and most instant heaters are similar in efficiency to each other.

I just looked at my gas water heater, and the yellow Energy Sticker runs from 279 to 310, a difference of only 11% from Best to Worst.

Basically, the more expensive models from each line have thicker, better insulation and thus perform better. They more expensive also have longer warranties. Larger models tend to be better performing than smaller similar models, meaning a 75 gallon heater will generally be more efficient than a similar 50 gallon model.

Unlike almost every other appliance, Energy Star ratings are NOT available for water heaters, again as the differences are pretty minor top to bottom.

What I did when I was in the market was examine the major manufacturers (A.O. Smith, Rheem, GE, etc.) and retailers (Sears) web sites and compared them that way. I compared price, efficiency, and warranty.

Here is a link that might be useful: Energy Star Ratings

keep in mind that larger is more efficient only on a per gallon basis. If you don't need 75 gals. of hot water, then you're just spending money to heat water you don't need.

There are tons of postings on hot water heaters in the Gardenweb's Plumbing Forum. You'll be reading for hours! Also, there is lots of discussion on that forum about tankless vs. traditional tank water heaters, a topic which is hotly debated.

Here's a link to an article from Consumer Reports. There are definitely differences among hot water heaters, most particularly in construction. But the differences are not so much by manufacturer, but rather by warranties offered. The longer the warranty, the better the heater, the anode, and the insulation. So you need to look for the longer warranties, which go anywhere from 5 years to 15. I would buy a hot water heater that has at least a 10-year warranty.

Reputation-wise, the Bradford White water heaters are the "BMW's", but whether you want to spend the money for a "BMW", or think it would be worth it, is for you to decide. Also, reputationally, the Whirlpool water heaters, found at Home Depot, are prone to recalls and other problems.

Here is a link that might be useful: Consumer Reports on Hot Water Heaters

Whirlpool heaters are found at Lowes. The Home Depot carries GE.

Ken

I have a heat pump water heater and it has made heating water by electricity very efficient and inexpensive. The technology was not readily accepted by Mr. and Ms. American consumer, so the product never caught on.

The unit is basically an air conditioner above the typical insulated water tank. Yes, it can be heard when it switches on to work, but it shuts off in twenty minutes or so when the water has reached the temperature set.

I'd buy another of these when the one I own finally gives up the ghost (that is...if I could even find one). I've had the thing for over twenty years and it is still doing its job!

Perhaps a manufacturer will develop a quieter product based on the same heat transfer technology and market it successfully. This would save a ton of money on the cost of heating water electrically and reduce our dependence on oil as an energy source.

Of course, geothermal heat source for everyone would certainly be a great thing, but who can afford that or have the required space for that kind of install?

Most efficient (electric source) would be heat pump water heaters (helps a lot if you can put the exchanger/coils outside).

Most efficient overall by a fair bit (but may be costly in capital cost short-term) is solar hot water with electric backup.

"Best" regular electric by a fair margin (IMHO) would be Marathon water heaters - lifetime warranty(!), thick insulation (4"), and preferred tank to use for solar HW storage. Plus the ports are large enough you can pull the heating elements and shop-vac out any sediment buildup if need be. We installed a 105 gallon one recently.

Cool video of them being made on their website, too.

Here is a link that might be useful: Marathon water heaters

Yes, solar is very efficient, but as jesup says, it can be expnsive to install.

But my heat recovery system cost me just $400 to install (about 7 -10 years ago, so it's obviously costs more today, apparently $500 is a more common figure today) and provides all the hot water I need during the summer, ofr a family of three.

Basically, it is a heat exchanger system on my AC unit. It recovers much of the heat my AC system usually puts into the air, and uses it to heat water. One small pump and a few valves-very simple and reliable. It also reduces the load on the AC system, as it has less heat to deal with.

Not for everyone, based on location, but for me, for six months of the year, I even turn off the pilot on my gas water heater, so zero hot water costs for half of every year. A very green system, as it takes little to make the system, and it reduces energy consumption quite a bit.

Here is the EnergyStar info sheet on them.

Here is a link that might be useful: AC Desuperheater info