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What Is an Energy-Efficient Water Heater? Costs, Types, Subsidies, and Key Considerations for Rental Properties

A complete guide to energy-efficient water heaters, including types such as EcoCute, Ene-Farm, and Eco-Jozu, along with installation costs, subsidies, and key considerations for rental properties. Essential reading for landlords seeking long-term cost savings.

Last updated: About 3 min read

As demand for energy-efficient rental properties grows, more landlords are considering installing energy-efficient water heaters. Compared with conventional models, these systems can significantly reduce utility costs while also improving tenant satisfaction. This article explains the types and features of energy-efficient water heaters, typical installation costs, available subsidies, and the key points to consider when replacing an existing unit.

What Is an Energy-Efficient Water Heater? How It Differs From a Conventional Model

An energy-efficient water heater is a high-efficiency system that heats water effectively with less fuel. Compared with conventional water heaters, it reduces energy consumption while delivering the same or better hot water performance.

Many municipalities recommend installing these systems, and they are attracting attention as equipment that benefits both household finances and the environment. More owners are also choosing eco-friendly models when replacing older units.

What Types of Energy-Efficient Water Heaters Are Available?

Energy-efficient water heaters can be broadly divided into five types. Let us compare the features of each type and the property types they best suit.

エコキュート

This is a CO2 heat pump water heater that uses heat from the air and electricity. Its main advantage is that utility costs are the lowest because it heats water using nighttime electricity. Its thermal efficiency is high at 300%, and even greater energy-saving benefits can be expected when it is used together with solar power generation.

However, it is important to note that space is required for a dedicated storage tank, and hot water may run out if usage exceeds the tank capacity.

エネファーム

This is a residential fuel cell system that generates electricity using gas while also producing hot water from exhaust heat. Its energy efficiency is 95%, and it can continue supplying electricity during a power outage, which also makes it effective for disaster preparedness. Because it has a backup heat source, there is no concern about running out of hot water.

エコジョーズ

This is an energy-efficient gas water heater that uses city gas or LP gas. Because it does not require a hot water storage tank and has a compact design, it is well suited to rental properties where installation space is limited. Initial installation costs are also relatively low, making it a practical choice for landlords who want to keep their upfront investment under control.

エコフィール

This is an energy-efficient water heater that uses kerosene as fuel. It performs well in cold regions and in areas without access to city gas. By reusing exhaust heat, it can deliver energy savings of about 13% compared with conventional models.

ハイブリッド給湯器

This product combines a heat pump with a gas water heater, using the heat pump efficiently for small amounts of hot water and switching to gas during heavy use. Its key attractions are strong hot water efficiency and the fact that there is little concern about running out of hot water.

What Are the Benefits of Installing an Energy-Efficient Water Heater?

Installing an energy-efficient water heater in a rental property offers benefits for both landlords and tenants.

  • Significant utility savings:Savings of several tens of thousands of yen per year are possible compared with conventional models
  • Vacancy reduction:Energy-efficient equipment is popular with tenants
  • Environmental appeal:It also helps support compliance with ZEH standards
  • Use of subsidies:National and local subsidy programs may be available
  • Higher property value:Because the equipment level improves, a rent increase may also be worth considering

What Drawbacks Should You Understand Before Installation?

Energy-efficient water heaters offer clear advantages, but there are also drawbacks that should be understood before installation.

  • High initial cost:The unit price and installation work are more expensive than for conventional models
  • Need for installation space:エコキュート and エネファーム require a large tank
  • Noise considerations:Heat pump systems may generate low-frequency noise
  • Repair costs in the event of failure:Parts are expensive, and repair periods can be longer

What Is the Typical Cost of Installing an Energy-Efficient Water Heater?

The typical cost range by type of energy-efficient water heater is as follows.

TypeUnit PriceTotal Including Installation
エコキュートJPY 200,000 to 500,000JPY 400,000 to 700,000
エネファームJPY 1,000,000 to 2,000,000JPY 1,500,000 to 2,500,000
エコジョーズJPY 100,000 to 250,000JPY 150,000 to 350,000
エコフィールJPY 150,000 to 300,000JPY 250,000 to 400,000
ハイブリッドJPY 350,000 to 550,000JPY 500,000 to 800,000

If cost performance is the priority, エコジョーズ is a strong option. If the goal is to reduce running costs over the long term, エコキュート deserves close consideration.

Can You Use Subsidies or Grants?

In some cases, national or municipal subsidy programs can be used when installing an energy-efficient water heater. Subsidy amounts often range from several tens of thousands of yen to over one hundred thousand yen, and eligible equipment and conditions vary by program. Because application deadlines apply, it is best to check early when you begin considering installation.

What Should You Watch Out for When Installing One in a Rental Property?

Understanding the points specific to rental properties will help prevent trouble.

Confirm the installation space

Because エコキュート and エネファーム require a large tank to be installed, you should check the pipe space and balcony size in advance.

Noise control

Heat pump systems generate low-frequency noise during operation. Please consider the impact on neighboring units and review measures such as installing vibration-damping mats.

Establish a maintenance structure

Energy-efficient water heaters require regular maintenance. If you have a maintenance agreement with the management company or manufacturer, responses to failures will be smoother.

Explain usage to tenants

It is important to communicate usage precautions to tenants, such as how to avoid running out of hot water with エコキュート and how to handle エネファーム during an extended absence.

Frequently Asked Questions (FAQ)

Q. How long does an energy-efficient water heater last?

As a general guide, the lifespan is about 10 to 15 years. However, this can vary depending on usage frequency and maintenance conditions.

For rental properties with limited installation space, the compact エコジョーズ is a popular choice. For all-electric properties, エコキュート is well suited.

Q. Is it possible to replace an existing water heater with an energy-efficient model?

In principle, yes. However, if the fuel type changes, such as from gas to electricity, additional piping work will be required.

Q. Can rent be increased after installing an energy-efficient water heater?

In some cases, a rent increase of around JPY 1,000 to 3,000 per month may be accepted as part of an equipment upgrade. Because tenants also benefit from lower utility costs, it is often easier to gain their understanding.

Q. By when should a subsidy application be submitted?

Many programs set budgets on a fiscal-year basis. Some may close early once the budget cap is reached, so once you decide to proceed, you should submit the application without delay.

Daisuke Inazawa, President & CEO of INA&Associates Inc.

Author

President & CEOINA&Associates Inc.

President & CEO of INA&Associates Inc. Leads real estate brokerage, rental leasing, and property management across Greater Tokyo and the Kansai region. Specialises in income-property investment strategy and advisory for ultra-high-net-worth individuals.

Daisuke Inazawa is the President and CEO of INA&Associates Inc., a Japanese real estate firm headquartered in Osaka with a Tokyo branch. He leads the company's three core businesses — real estate sales brokerage, rental leasing, and property management — across the Greater Tokyo Area and the Kansai region.

His areas of expertise include investment strategy for income-generating real estate, profitability optimisation of rental operations, real estate advisory for ultra-high-net-worth individuals (UHNWIs) and institutional investors, and cross-border real estate investment. He provides data-driven, long-horizon advisory to investors in Japan and overseas.

Under the management philosophy "a company's most important asset is its people," he positions INA&Associates as a "people-investment company" and is committed to sustainable corporate-value creation through talent development. He also writes and speaks publicly on leadership and organisational culture in times of change.

He has passed eleven Japanese professional qualification examinations: Licensed Real Estate Broker (Takken), Certified Real Estate Consulting Master, Licensed Condominium Manager, Licensed Building Management Supervisor, Certified Rental Housing Management Professional, Gyōseishoshi Lawyer (administrative scrivener), Certified Personal Information Protection Officer, Class-A Fire Prevention Manager, Certified Auctioned Real Estate Specialist, Certified Condominium Maintenance Engineer, and Licensed Moneylending Operations Supervisor.

  • Licensed Real Estate Broker (Takken)
  • Certified Real Estate Consulting Master
  • Licensed Condominium Manager
  • Licensed Building Management Supervisor
  • Certified Rental Housing Management Professional
  • Gyōseishoshi Lawyer (Administrative Scrivener)
  • Certified Personal Information Protection Officer
  • Class-A Fire Prevention Manager
  • Certified Auctioned Real Estate Specialist
  • Certified Condominium Maintenance Engineer
  • Licensed Moneylending Operations Supervisor