Both electric storage tank and tankless water heaters can not earn the ENERGY STAR because they have limited energy savings potential. All Water heaters sold in the US must have an Energy Factor of 0.904 or greater, set by the federal minimum standard. The most efficient electric storage tank water heaters on the market have an Energy Factor of 0.95, which represents 4.8% savings over the minimum federal standard (Energy Factor = 0.904). Electric tankless water heaters fare only slightly better. The best performing electric tankless water heaters have an Energy Factors of 0.99, which represents a savings of 8.7% in comparison to the Federal Standard (Energy Factor = 0.904).
This technology has little to no room for improvement. The perfect electric (storage tank or tankless) water heater could not exceed an Energy Factor of 1.0 due to this technology's physical limitations.