That is a very good question.
In spite of major improvements made to water heater insulation, the tank still loses some of its heat to the air around it. In winter, if the space where the water heater is installed is heated, the heat loss can help heat the room. However, if the water heater is installed in a room that is not heated, the heat it loses will be greater and won’t be offset by a decrease in heating needs.
We do not recommend installing a water heater in an unheated room. If you don’t have any other option, you can reduce heat loss by adding insulation to the water heater as well as to the pipes carrying the hot water leaving the tank.
In addition, we encourage you to leave a smaller environmental footprint by opting for a three-element water heater. The price is comparable to that of a conventional two-element water heater and the overall demand for electricity during peak periods is lower, which benefits all Quebecers. For more information go to our specialized Web site on three-element water heaters.