Thursday, April 12, 2012

Replacement Water Heaters: Solid Options

I've had a run of questions recently about Water Heaters in the last few weeks, so today we'll share our recommendations with you in case you find yourself in the market for a new one in the near future.  

All the details after the jump.

We'll start with our favorite, the Solar Water Heater.  These aren't very popular yet, due to upfront costs ($1,500-$4,000), longer payback (8-10 years) and lack of dynamic incentives (with no extra state incentives). The savings could be $400-500 annually.   

If you can't shell out that kind of money for a water heater, you still have some good options--regardless of whether you are heating with electric or gas.  As usual, we present these with the incentives for the largest utility provider in our part of the state (Ameren).  It should be noted that some of the electric co-operatives are selling High Efficiency 50 gallon Marathon Water Heaters directly to co-operative members at about $150 under the retail price.  Talk to your co-operative to see if they are participating.   
Heat Pump Water Heaters -- Electric

--Consumes 50-60 % less energy than other water heaters
--Saves about $200/year
--If replacing an electric water heater, $300 rebate check from Ameren.                                                                                                               

Ace Hardware, 60 gallon (online) --  $1,600

Home Depot, 50 gallon -- $1,300

Sears, 50 Gallon -- $1,000 

.67% Efficiency Factor (EF) Water Heaters -- Natural Gas

--Consumes 20-30% less energy
--Saves about $75/year
--$50 rebate check from Ameren

Ace Hardware –Can’t locate a unit this efficient on their website

Home Depot, 40 gallon (Power Vented) -- $600  

 **Water Heaters with a .67 EF qualify for $50 Ameren rebate check

 Tankless Water Heaters – Natural Gas

These are pretty neat. 

--30% energy savings over standard water heater, about $100/year
--They heat water only when you need it and send it through the line. 
--A lot of these are super high-efficient (.82 EF!) and can handle the load of a typical 3 bedroom two bath house. 
--They are much smaller than typical water heaters because they don’t have a 40-50 gallon tank attached.  
--They provide endless hot water for one major usage at a time.  Since most people probably don’t take a shower at the same time they fill up the washing machine and wash the towels on ‘hot’ this isn’t an issue for most people. 

Ace hardware, $720

Home Depot, $700
**Water Heaters with a .70 EF qualify for $75 Ameren rebate check

Ideas for achieving super-low upfront cost

If you have just experienced sticker shock, another option would be to buy a gas water heater timer for $110 and pair it with a baseline unit ($300).  You will improve the performance of the cheaper water heater, and the timer can be set to run it less hot between something like 7pm-4am.   The timer will pay for itself in less than 3 years. 

Also buy an insulation jacket for the gas hot water heater at a cost of $25.  It will pay for itself in less than 12 months.      

These measures will help the cheap water heater, but it won’t qualify for an incentive and it may not be rated to last as long as the high-efficiency models.  In addition, the power-vented model and the tankless model have spent gases like carbon monoxide directly vented to the exterior through a connected pipe.  The less-expensive models are natural draft water heaters that could allow that exhaust air to mix with the air in your home.  We like safety.

Best bet:  If the upfront cost doesn’t scare you off, the Heat Pump water heater is well worth it, but the tankless system is where it’s at.  When you compare it to the baseline model, the extra expense of the Heat Pump heater is paid back in about three years.  The payback period on the tankless water heater is just under two years.   

In addition to the Ameren rebate, you may be able to get a federal tax credit.  However, the old credit expired at the end of 2011.  There is language in the Highway Bill being debated in the US House right now (it passed the US Senate) that would reinstate the tax credits for energy efficient equipment, insulation, etc.  But it hasn’t passed yet.  Reinstating the old incentives would mean a $300 tax credit for the Heat Pump water heater.  It would mean a $300 tax credit for a super high-efficiency water heater—like a tankless model--which has a .82 EF or above.  

These tax credits could be claimed in addition to the Ameren incentives, if and when they are reinstated.