Recently we took a hard look at residential water heaters. We tried to make real sense of the many sustainable claims and options available on the market in search of the best investment for our clients. We scoured many sources, including Consumer Reports, the U.S. Department of Energy, manufacturer’s testing data, consumer blogs and reviews, industry professional experiences and many more. What we found was surprising.
While it’s true that a solar tank or a gas tankless unit will normally use the least amount of energy thereby lowering your monthly bill; we found their upfront costs and installation can offset much of the monetary savings for years to come. However, if you plan to stay in your home more than 10 years then the investment will likely payoff.
Below is our comparison breakdown of water heater types and estimated annual operating costs. These figures are our estimates for a typical family of four based on national usage data published by the U.S. Department of Energy.
While utility prices vary across the nation, in general the heating costs of electric versus gas is approximately a 2:1 ratio, i.e. for every $1.00 spent for electric an equivalent usage using gas would cost $0.50. In some places where gas is readily processed it may be as much as a 3:1 ratio.
ELECTRIC TANK – 50 gallon
Annual Operating cost: $500 / year
Investment: $750 for non-metalic (plastic) tank
Tank lifespan: lifetime warranty (will eventually replace parts in 12-15 years but not the tank if you purchase a new plastic type tank – all metal tanks will need to be replaced in 12-15 years).
GAS TANK – 50 gallon
Annual Operating cost: $300 / year
Investment: $810 for low emissions metal tank
Tank lifespan: Full replacement in 12-15 years
Savings Payback Period over electric tank: less than 1 year
HYBRID HEAT PUMP TANK – 50 gallon
Annual Operating cost: $350
Tank lifespan: Full replacement in 12-15 years and likely servicing of heat pump prior
Savings Payback Period over electric tank: 3-5 years
SOLAR TANK WITH ELECTRIC ASSIST – 50 gallon
Annual Operating cost: $250 (avg. 50% savings over electric tank)
Investment: $2,500 plus. Note a federal Tax Credit up to $300 is currently available.
Tank lifespan: Full tank replacement in 15 years (not solar panels)
Savings Payback Period over electric tank: 7-10 years
Consumer Reports found solar tanks operate at about 50% efficiency overall in ideal orientation circumstances. This conclusion was also reached by the Department of Energy – unless you live in Florida, where you’ll operate at greater efficiencies.
Annual Operating cost: $375 / year (avg. 25% +/- savings over electric tank)
Investment: $750 per unit +/- plus added electrical wiring may be required. Note a federal Tax Credit up to $300 is currently available.
Unit Lifespan: 15-20 years – requires regular system flushing with vinegar solution to prevent mineral buildup and corrosion of heating elements.
Savings Payback Period over electric tank: 1-2 years (adding a second unit may add several years)
Flow-rate with 55 degree ground water: 3.5 gallons per minute with the largest unit available on the market. This should serve two small bathrooms OR one bathroom plus kitchen and laundry. Typical flow rates: in general each fixture (a shower head, kitchen sink faucet, washer, etc.) is 2.0 +/- gallons per minute (combining both hot and cold water) depending on efficiency.
Annual Operating cost: $225 (avg. 25% +/- savings over gas tank)
Investment: – $2,000+ (unit is $1200 plus required gas venting). Note a Tax Credit up to $300 may be available.
Unit Lifespan: 15-20 years – requires regular system flushing with vinegar solution to prevent mineral buildup.
Savings Payback Period over electric tank: 8-10 years (6-8+ over gas tank)
Flow-rate with 55 degree ground water: 6.5 gallons per minute — this would serve a typical house with a family of four.
When it comes to electric tankless units it’s vital to fully understand the product flow-rate charts. The colder your climate the greater the temperature rise required to heat your incoming cold water which results in lower flow rates. This means if you live in Florida the largest electric unit on the market may be able to serve a full 2 bathroom house, but in Maine that same unit may only be able to serve a single bathroom requiring additional units to be installed for each point of use throughout the house and increasing your investment costs. Generally this is less of an issue with gas tankless units because they have greater flow-rates to begin with than electric units.
Tankless units, in particular electric, require annual flushing with a vinegar solution to prevent mineral buildup which leads to clogging and lower flow rates and eventual corrosion. If you live where hard water is prevalent you should flush your system at least twice a year.
In the end the choice of a water heating system should take into consideration your water usage, what energy sources are available at your property, how long you plan to reside in the home, and what space you have available. Each system has pros and cons depending on your specific situation.
Feel free to contact us if you’d like further information.