Water heater -- natural gas or electric?

[wells conklin]

I'm planning on replacing the old 40-gallon gas water heater. We are considering the on-demand type or may opt to stay with the tank style. (The chimney is all set up for the gas burner, but the electric panel is close-by, so it's six of one, or half dozen... you get the idea.) My concern is with the economis of natural gas vs. electric. Any suggestions? Thanks!

[Zach England]

I'm planning on replacing the old 40-gallon gas water heater. We are considering the on-demand type or may opt to stay with the tank style. (The chimney is all set up for the gas burner, but the electric panel is close-by, so it's six of one, or half dozen... you get the idea.) My concern is with the economis of natural gas vs. electric. Any suggestions? Thanks!

I have always understood that natural gas is FAR more efficient, but never really researched it. I have just assumed it was fact. When I replaced mine I did not even consider electric.

[Paul Ryan]

Actually Electric is far more efficent than a gas heater. 99% of all gas water heaters sold today still are not much more than 80-85% efficient. Were a electric water heater is 100% efficient. Now in the past electricity was much more expensive than gas so it didn't pay to go electic. But natural gas and propane has shot up like crazy the past few years. So you really need to check the trends of what natural gas has been running, this summer it was real cheap but that was do to the economy. If you live in town and pay around .15 a kilowatt it is a wash between gas or electricity. I live in a rual area and get all kinds of breaks on electricty as long as I am on a load managment program. They shut down my water heater and heat pump for short periods of time when the demand is high. I also got a 80 gallon water heater for $200 that will last 20-30 years because it is plastic and not a steel tank. Since I am on that program I only pay .035 a kilowatt. Switching to the electic water heater from a 38 gallon gas to an 80 gallon electric saved me about $300 last year alone. Bottom line see if there are any programs for your area and what the fuels cost, electricity compared to gas.

[Aaron Wingert]

I regularly inspect gas and electric tankless units. My opinion is that I'd never opt for a tankless unit unless you're running out of hot water on a regular basis. And even then, I think an additional "slaved" tank unit or a larger tank is better. The installation and parts costs on the tankless units are much, much, much higher and under normal household use you shouldn't expect much of any return on your investment. They're not usually DIYer friendly either, like tank units are. You've got to buy tankless for the added convenience that you can do laundry, dishes and take five showers in a row without running out of water...That is worth the added cost to some folks...Not the economics, because you'll very possibly be disappointed in the long run.

Personally, I'd never switch from gas to electric regardless of tank or tankless.

Spend your money on a well insulated gas tank unit in my opinion. It'll likely be more efficient than the older one you're replacing anyhow. The recent federal mandates for sealed combustion on gas water heaters to mitigate ignition hazards certainly didn't hurt efficiency either.

[Randal Stevenson]

In the tank style, electric is more efficient. What about the on demand? I've heard, but no experience, that the electric's are fine for things like sinks, but won't supply enough for things like showers. Then I have also heard the gas on demand ones (you may have to increase your gas line size), have issues with these as well. (verses a tank style)

[Jim Tobias]

I switched from a (propane powered ) water tank to an "on demand" natural gas powered(Rinnai) for our house last year. In our home, gas is used for heating water, stove, and 2 fireplaces. I know prices are better now than they were then, but I also know that my costs for the most recent 6 month comparitive period was around 60% less. It should pay for itself in another year. And a sdie benefit is as much hot water as you ever need as any given moment.

Jim

[Rick Moyer]

If you are strickly speaking economy, you will have to find out what your costs are per BTU for each heat source in your area. We moved from an all natural gas home last year to an all electric home. While I like the new home better, I miss the natural gas. I had a gas fireplace and if the electricity went out I still had heat. Is that a consideration for you (hot water)?

[Jim Becker]

Gas would (and is) my choice. I have both a high-efficiency tank style water heater in the original part of our home and a tankless system in the addition. The latter is outstanding. The only issue we've had is with a particularly low-flow shower head in our guest suite...it doesn't allow the minimum .8 gal/min flow rate that the tankless system requires to turn on. That will be rectified as soon as I can figure out how to bugger the shower head...in the mean time, turning on the faucet brings the flow level up enough. The essentially unlimited hot water it brings is wonderful. Relative to cost to run, using the summer months when the only gas use is for cooking and hot water, the gas bill only increased by maybe $5-10 a month over what it used to be with just the tank hot water and cooking prior to the addition being completed...like from about $28 to about $35, give or take.

The downside to tankless is the very specific venting requirements, both in design and materials. You often cannot use existing chimney facilities, so don't assume you can use the same setup as you did with the retiring water heater. There is more up-front cost in that regard, but over time, the savings still prevails, IMHO. And even if there is no savings, you have the peace of mind that you are not burning fuel unless you are actually using the results and you can take a two hour shower if you want to without getting cold.

[Tom Godley]

I think you will find that natural gas will be the cheapest way to heat the water unless you happen to be in one of the rare areas of the country where electricity is unbelievably cheap.

You can find the relative cost of different fuels using one of the calculators available on the internet - you simply input your costs of each fuel and it will give you the comparison.


The point of the instantaneous units is they eliminate standby losses from holding hot water in a tank. So they are great for homes or areas of homes where hot water is used infrequently or where you may require a large load all at once -- say to fill a large whirlpool tub or for your four daughters to take showers. To design a conventional system for those higher loads would require a larger hot water heater and the standby loss would be greater than a standard 40 gallon unit.

You can also spend a little more and get a standard 40 gal unit with a larger burner - this will get you a much quicker recovery.

I spent the past week at a vacation house at the coast -- it has a lot of bathrooms and an instantaneous gas unit for hot water. It always drives me crazy. The unit is on the second floor to service the master bath w/ tub and three other baths and the washer/dryer. With eight people especially in the summer - no tank can keep up. But it takes forever for the hot water to stabilize in the kitchen and even at the closer bathrooms you must run the water for quite a while before it gets up to temp.

[wells conklin]

Rick, you are so right about the plus side of having gas-fired hot water even if your electricity goes out. Thanks gentlemen for your input. I appreciated it so much I sent a contribution today to help with my part in keeping our forum up and running! Godspeed, and a good new year to all.

[Dan Friedrichs]

Something to consider: Most electricity comes from burning coal or natural gas. Why burn something to make heat hundreds of miles away from you, convert that heat to electricity (at less than 100% efficiency), then use lossy transmission lines to bring electricity to you, just to convert that energy back into heat? From an energy efficiency standpoint, gas is MUCH better.

[Chris Stolicky]

Gas would (and is) my choice. I have both a high-efficiency tank style water heater in the original part of our home and a tankless system in the addition. The latter is outstanding. The only issue we've had is with a particularly low-flow shower head in our guest suite...it doesn't allow the minimum .8 gal/min flow rate that the tankless system requires to turn on. That will be rectified as soon as I can figure out how to bugger the shower head...in the mean time, turning on the faucet brings the flow level up enough. The essentially unlimited hot water it brings is wonderful. Relative to cost to run, using the summer months when the only gas use is for cooking and hot water, the gas bill only increased by maybe $5-10 a month over what it used to be with just the tank hot water and cooking prior to the addition being completed...like from about $28 to about $35, give or take.

The downside to tankless is the very specific venting requirements, both in design and materials. You often cannot use existing chimney facilities, so don't assume you can use the same setup as you did with the retiring water heater. There is more up-front cost in that regard, but over time, the savings still prevails, IMHO. And even if there is no savings, you have the peace of mind that you are not burning fuel unless you are actually using the results and you can take a two hour shower if you want to without getting cold.

I have had similar experiences - costs, flow rates, and venting requirements.

I also believe that the expected life of tankless units is much longer than tanks. My research indicated over 20 years for the tankless units. Also, the federal energy tax credits may apply, which will bring down the upfront cost. They did a couple of years ago when I installed mine.

With that said, I am leaning towards the installation of a small tank downstream of the tankless unit just for those times when you want a little bit of water and don't want to crank it and wait. Probably just a small 10 gallon, 110v, tank with a set temp below the temp of the tankless unit.

[Steve Peterson]

Converting electricity to heat is 100% efficient, but this does not consider the inefficiency of generating and distributing the electricity. If the electricity is generated from coal or oil, then the overall efficiency is probably somewhere between 50% and 75%.

Generating heat directly from gas is the most efficient method. This is much more efficient than burnng gas/oil/coal to generate electricity 100 miles away, then turn that electricity back into heat.

Where I live, the first few KWh of electricity costs ~11 cents. Then it jumps to ~13 cents, then ~20 cents, and eventually as much as ~40 cents per KWh. Adding additional large electric loads could bump you into the really expensive electric rate.

My vote is to stay with a direct heat source (gas).

Steve

[Belinda Barfield]

We installed an electric on demand unit for our office/shop three years ago. We didn't buy the best one out there because basically we wanted hot water for the dishwasher (used rarely), and the occasional shower taken at the office. It takes a couple of minutes for the water at the kitchen faucet to get hot and I feel guilty standing there with the water running. The tankless has worked well for us, but as I said, we rarely use hot water.

[Ed Hazel]

I went through this a few months ago when my water heater started leaking.

Natural Gas is cheaper than electric by far in my area.

I looked at the on demand type units and the cost difference including new venting was about $1500 more for a decent one.
My NG bill in the summer with only hot water and cooking is around $30/month, I figured if my hot water costs $30/month and and the on demand unit saved me 25% of that or $7.50/month it would take 200 months to recover the cost. Think the on demand unit will last 16 years?