# Payback period for new water heater?



## wahoowad (Dec 14, 2006)

I haven't owned my house since 1987 (year built) but I'm inclined to believe my water heater is original. I've been here 9.5 years and it looked old then. Fortunately it has never fully failed although once in a very rare blue moon it will not have hot water in it. It _can_ run out after two people take back to back long showers. I also do not have as hot a water as I'd like coming out of my kitchen sink faucet. So I'm contemplating replacing it and hope I get hotter water and more efficiency. I know I can try to remove silt to increase capacity (did this before), I can also replace heating probes. But I'm thinking why bother on such an old unit.

Brands/quality aside (I've seen the recent rants) I'm pleased to see standard units available for $300 -$350. Anybody know how much electricity a 1987 era unit might consume so I can estimate my potential payback period? I really have no idea. It has always just been two of us living here with morning showers and moderate laundry usage, so we haven't placed a lot of demand on the water heater. But it probably isn't a 'smart' unit so I guess it used resistance heating elements off and on all day long to keep the water hot even during daytime or late at night. Newer units seem to have some intelligence or programming available to tune in heating times.


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## kevinmoelk (Dec 14, 2006)

Is there an energy tag on the old unit?  Frankly, I wouldn't be concerned about the energy savings.  They are probably going to be on the small side in terms of realizing a payback.  I, as everyone knows, bought a whirlpool unit.  But I did so under pressure, had guests over, needed hot water NOW type situation.  If I had more time I'd do a little reserach as to the brands and makers.  Afterall, this is an appliance you'll have to live with for many years.

In the end, the new heater will indeed perform better then the old, supply more consistent hot water, be more energy efficient, etc, just by the virtue of being new regardless of brand.  If you are running out of hot water, you may want to consider having a unit with a larger tank installed.  But then you'll have a higher cost to run the unit.  Ah, the dilema.

-Kevin


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## Fish MT (Dec 14, 2006)

I am in the same situation.  I know the heater is going to fail soon I just hope I can save enough money for a heat on demand unit before it does.  I was skeptical of them at first, mostly because of reliablity over time.  However, it seems like they have this problem fixed.  The only thing is if you have a large distance from it to the outside it will cost a fortune.  They recommend a stainless steel vent for these units and anything over 5-10' will increase the cost to where it might not be beneficial.  Luckily I only have a little over 3' so I think that is the path I will take.  If I can find the link to the websites that I primarily used to reseach these I will post it (They are in an email somewhere).

Costs more but I think the pay back is actually measurable, plus there is the $500 tax credit.


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## Rhone (Dec 14, 2006)

How much do you pay for electricity (take an electric bill, and use the total kw used and the price you have to pay to determine, don't follow what the eletric company says you pay per Kw they usually add service, transmission, renewable, efficiency, transfer charges per kW to boot).  Then, what would your choice be for other types of fuel for the water tank such as either LP, oil, etc?  

For me, every dollar in heating hot water I spend in oil costs me $2.66 to do the same using electricity.  My wife & I are pretty conservative on our water use and we go through 221 gallons oil/year.  That's $596.479/year for oil and to replace it with an electric tank will cost us $1,586.64/year for hot water instead.  There's no way an electric tank is a wise decision around here.  So, what is your kW as stated on your bill, and how much would it cost/gallon for another fuel choice.


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## wahoowad (Dec 15, 2006)

If you mean me, Rhonemus, I don't have oil or gas as an option. I think I pay 5.6 cents a KWh here in Virginia.

My unit does not have one of those energy tag or a product tag with a date of manufacture. It is a 50 gallon Bradford-White 'Energy Saver' unit that uses two 4500W heating elements (although the tag also said it was a 4500w unit overall, yet I seem to have two 4500W elements?). It did say it complied with ASHRAE code 90A-1980. I see a one inch foam pad as insulation.


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## Sandor (Dec 15, 2006)

If you want an electric water heater, this is the best and most efficient. Some utilities give you a rebate for purchasing one:

http://www.marathonheaters.com/

If you want a gas water heater, this is the most efficient:

http://www.americanwaterheater.com/WHBrowser/commgas/polaris50.cfm

Note that the first ones out had some problems, but they all seemed to be fixed.

Comparing todays energy rates does not really matter. As we have seen in the last several years, the price of natural gas and oil have fluctuated radically. And IMO, will only get worse (and more expensive).

My strategy is to buy the most efficient anything I can, and ignore the payback.

Also, consider a solar water heater setup.

P.S. To get your true electric rate, look at the bill and divide the total bill by the KWH hour used. That five cent thing is only the fuel charge and does not facter in the tranmission costs, taxes, etc.


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## tutu_sue (Dec 15, 2006)

If the unit is that old, it's probably running even less efficiently than when it was new, due to deposit buildups in the tank and on the heating element.


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## wahoowad (Dec 16, 2006)

I don't think my utility gives any rebate. I just searched their website for "rebate" and found nothing.


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## saichele (Dec 17, 2006)

If you have an electric, then the whole 'efficiency' aspect associated with combustion is out the window - 100% of the electricity turns to heat.  So that has to go into Rhone's calculations.  Most combustion ones are going to be in the 80-90% range.

So for energy savings, look at the insulation.  Last fall I did an experiment with my $250 Lowes special (NG).  one month it used 40 ccf.  Put a $20 foil backed fiberglass blanket on it (r13, I think) and the next month dropped to 21.  The other thing is management - keep the heat las low as is feasible, because then the gradient from the tank to the surrounding air will be minimized.  Also good for the tank to crank water through it, although a 17 yr old tank is likely on borrowed time.

If it ain't broke, and especially if it's in an unconditioned space, I'd wrap that sucker and see what happened.  

Steve


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## frwinks (Jan 26, 2007)

I'm in the market for a new heater as well.  Our tank is about 10 years old 50gal. and kicks on about three/four times per hour even when not in use (roughly $40/month worth of LP).  Since the furnace is always in the OFF position  , it's the only appliance on LP.  
Have you looked into tankless systems (hot water on demand)?  I've been looking at various (electric/LP) tankless systems but would love to hear from anyone who's actually had one in use for a while.


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## wahoowad (Jan 26, 2007)

Your $40/month cost sounds high, but I honestly can't tell you just how much my electric one costs. I'll be replacing it soon though and probably getting the standard 50 gal. electric one from Lowes. I plan to first try and drain it this weekend and see if it is filling up with silt. Mine still works but whoever takes the second shower in the morning tends to run low. I could have a thermostat or a heating element gone bad but my unit is so old I'm just gonna replace the whole damn thing.


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## kevinmoelk (Jan 26, 2007)

Wahoowad, read my thread about my whirlpool water heater, and others comments.  You may change your mind about buying at Lowes.  If I wasn't broken down and in a pinch I would have bought a different unit.  My research has indicated Marathon water heaters as the best choice for an electic unit.

-Kevin


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## jjbaer (Jan 31, 2007)

wahoowad said:
			
		

> If you mean me, Rhonemus, I don't have oil or gas as an option. I think I pay 5.6 cents a KWh here in Virginia.
> 
> My unit does not have one of those energy tag or a product tag with a date of manufacture. It is a 50 gallon Bradford-White 'Energy Saver' unit that uses two 4500W heating elements (although the tag also said it was a 4500w unit overall, yet I seem to have two 4500W elements?). It did say it complied with ASHRAE code 90A-1980. I see a one inch foam pad as insulation.



If it's Old Dominion, it's 6.3 cents/Kwhr plus a $7 surcharge but still low when compared to most other states.


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## begreen (Jan 31, 2007)

wahoowad said:
			
		

> If you mean me, Rhonemus, I don't have oil or gas as an option. I think I pay 5.6 cents a KWh here in Virginia.
> 
> My unit does not have one of those energy tag or a product tag with a date of manufacture. It is a 50 gallon Bradford-White 'Energy Saver' unit that uses two 4500W heating elements (although the tag also said it was a 4500w unit overall, yet I seem to have two 4500W elements?). It did say it complied with ASHRAE code 90A-1980. I see a one inch foam pad as insulation.



Only one element runs at a time depending on how much cold water is in the tank.


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## berlin (Jan 31, 2007)

"If the unit is that old, it’s probably running even less efficiently than when it was new, due to deposit buildups in the tank and on the heating element"

not true. electric resistance. same efficiency now, as when it was new. the only way an electric water heater will be more "efficient" is from better insulation of the tank, to reduce off-cycle heat loss. if you want to increase efficiency further, wrap the water heater as well as all hot water piping in the home.


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## sgcsalsero (Feb 1, 2007)

frwinks said:
			
		

> I'm in the market for a new heater as well.  Our tank is about 10 years old 50gal. and kicks on about three/four times per hour even when not in use (roughly $40/month worth of LP).  Since the furnace is always in the OFF position  , it's the only appliance on LP.
> Have you looked into tankless systems (hot water on demand)?  I've been looking at various (electric/LP) tankless systems but would love to hear from anyone who's actually had one in use for a while.



I would be cautious about tankless, they make for great segments on DIY shows, but can' recall reading any rave reviews.  I checked with at least three people in the trade (plumber, furnace) last three years and they were not in favor.  When Lowes came out with a fancy flyer on the Bosch tankless NG I did a couple of googles and found some disappointing commentary on epinions, I think one guy actually said that Bosch recommended hooking up a small electric hot water heater to supplement . .


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## sstanis (Feb 1, 2007)

Love this topic, I have crunched all the numbers: backwards, forwards, sideways:

First off, in regards to your water heater, what are your venting options?  Is your water heater close to your dryer?  If so, what you could do you can go with a Propane power vent water heater and if dryer is in close proximity you can get a gas dryer that can also run off propane.  Power vent water heaters use PVC as their vent pipe.  First off, the most efficient heating option is the one used only once.  Using electricity to heat anything is wasteful.  The vast majority of electricity is from coal.  Burn coal once to create electricty (40% efficient).  use electricity to create heat (100% efficient).  So matter how much you crunch the numbers.  electricity heating is actually wasteful.  Ok.  so if propane is not an option, then you (like me) you must use electricity.  Although, I could use propane; however, I just moved into my house 4 yrs ago, and former owner just b4 I moved in replaced electric water heater and purchaed new electric dryer (which was included in sale).  I, in my case, have day/night electric rates so hooked up timer to unit and have cut my total electric bill by 1/3.

So, elctricity is your mode.  Ok, then spend the extra $300.00 and order a Marathon electric water heater.  Then you will never have to replace water heater.  Even if you have to borrow the money do it.  Long term cost savings is worth it.  Moreover, if yoou have day/night rates for electric hook up timer to water heater.  Do not, I repeat do not, go with an electric on demand water heater.  Yes, if you add the numbers they can save you money; however they will cost you money in other areas.  On avg, it takes at least one minute of running water b4 you will get any warm water with them.  So, on avg, you will waste water with your minimum daily events like washing hands, showering, doing dishes in sink.  Now one could argue, that is minimal; however over the course off time it does add up.  Moreover, if you have well water like me, it will over time shorten your pump life.  Moreover, electric demand water heaters kill the power grid.  Electricity is calculated in "peak demand"  Power producers build power plants based on peak demand.  With coal, those plants are always running.  Over time, we will have to build more power plants, and with NIMBY (not in my backyard) and carbon caps (which are coming), electricity will become more costly.  Even better argument, is that electric demand water heaters require at a minimum 60amps.  which will require an electrician to install.  So after paying an electrician, it would take 15 yrs to realize any savings.

People have said solar, which I agree with; however, solar is best done on new home building rather than retrofits (unless you get some wonderful rebates, tax credits from your state).  On avg, a solar system will run you 4 grand.  

Hope all this helps.  Would like feed back from other posters


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## jjbaer (Feb 1, 2007)

wahoowad said:
			
		

> I haven't owned my house since 1987 (year built) but I'm inclined to believe my water heater is original. I've been here 9.5 years and it looked old then. Fortunately it has never fully failed although once in a very rare blue moon it will not have hot water in it. It _can_ run out after two people take back to back long showers. I also do not have as hot a water as I'd like coming out of my kitchen sink faucet. So I'm contemplating replacing it and hope I get hotter water and more efficiency. I know I can try to remove silt to increase capacity (did this before), I can also replace heating probes. But I'm thinking why bother on such an old unit.
> 
> Brands/quality aside (I've seen the recent rants) I'm pleased to see standard units available for $300 -$350. Anybody know how much electricity a 1987 era unit might consume so I can estimate my potential payback period? I really have no idea. It has always just been two of us living here with morning showers and moderate laundry usage, so we haven't placed a lot of demand on the water heater. But it probably isn't a 'smart' unit so I guess it used resistance heating elements off and on all day long to keep the water hot even during daytime or late at night. Newer units seem to have some intelligence or programming available to tune in heating times.



I have a thought: I calculated that for my NG hot water heater that about 50% of the cost goes to simply heat-up the water as it cools down even if I'm NOT using any hot water So....an extra insulation blanket that someone else mentioned is a good idea however, the nature of the beast also begs a second solution. I've often thought that if it were just me and if I didn't have to worry about a wife and kids using hot water "out of cycle" (meaning at times other than a narrow time window) then I could cut my costs to virtually nothing by doing this: buy a small electric hot water heater, say 30 gallons and leave it TURNED OFF for 23 hrs a day. I'd then turn it on about an hour before I needed it (time required depends on the heater element size) and I'd let it heat up the 30 gallons of, say, 60F water up to, say, 115F, then shut it off. Heating 30 gallons from 60F to 115F takes about 13,000 BTU's which is about 3.9 KW-hrs and, at my 10 cents per KW-hr, this would cost 39 cents per day (about $12 per month).............I know that if it were just me, that I could get by on even a 20 gallon tank...enough for a hot shower and some for the dishwasher and that would only cost me about $8/mo........see what we Americans pay for the "luxury" of having hot water "on-demand"........? We pay dearly....... 

I'll tell you one that's even easier....many of the NG units that vent using PVC pipe are only able to drive the exhaust gas temp down to the point where it won't melt the PVC by using a fan to entrain (pull-in) room air to mix with the hot exhaust gas to cool it before allowing it to go into the PVC pipe. This means they CAN'T operate unless the interlock system on the water heater system first senses that there's power to the blower and that the blower has actually come on..... These blowers are low current devices and are plugged into the wall using normal 120 volt outlets. I've often thought that they are prime candidates to be plugged into an electronic timer that plugs in the wall...so I could program the device to only provide power at, say 8 pm at night and go off at, say 9 pm and then I'd shower, wash dishes, etc., in this time period. The key point to be made in both these examples is that when I'm NOT using hot water that I'd also NOT be getting charged to keep it hot as it cycles between hot and cold through natural cooling and this, in-turn, would cut my bill down substantially.......


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## WarmGuy (Feb 1, 2007)

Here's my story on tankless water heaters.  

*Bottom line: Highly recommended.  *

You save big bucks, and never run out of hot water.  Only disadvantage is that there is a longer delay before the hot water reaches the faucet.  This is because with a tank, the hot water diffuses into the pipes.

If you're getting a new heater, or even if you're not, I'd recommend looking into it.

I had mine installed in May of 2005.  Here's a post I made somewhere else after it had been in a month.

Last month we had a tankless water heater installed.  Here's what I've found.

Financial

The total cost, including installation, was 1599 + $20 to dump the old water heater at the dump.

In the month prior to installation we used 38 gallons of propane, and in the month since installation we've used 21 gallons.  Note however, that it has been warmer this last month, so we've hung laundry out instead of using the dryer.  The only other thing we use propane for is the stove.

Total savings from these three changes was 17 gallons, which at a price of $2.00 per gallon is $408 per year.  In addition, the propane price fluctuates between about $1.11/gal in summer and $2.63 in winter.  So, if we can make it through the winter months without buying any propane, we'll save significantly more [we've easily made it through the winters with our 300 gal propane tank, so I only need to buy propane when it's cheap]. 

Estimated Savings

Old: 38 gal/month * 12 * 1.66 (avg price we've paid) = 756.96
New: 21 gal/month * 12 * 1.20 (estimated summer price) = 302.40

Annual Savings: $455
Payback in 3.5 years

Esthetic

My main concern was that with the new system, when we were using several hot water devices at the same time, the flow/temperature would drop.  This has not happened -- we've had plenty of hot water.

I expected that the amount of time for the hot water to reach a faucet or the shower would be the same as with the tank system.  However, I didn't realize that hot water from the tank in the old system diffused into the the pipes somewhat.  As a result, with the new system you have to wait longer for the water to get hot.  

In the kitchen it takes 32 seconds before you get full hot water.   So, if you want to wash your hands with warm water, you have to wait.

Bathroom faucets about the same.  But for some reason I haven't yet figured out, the shower doesn't reach full temperature for 2 minutes.  It's usable after 30 seconds, but not hot (120 degrees) until 2 minutes.  Luckily we don't pay much for water.

The delays are a bit of a bother, but not too bad.  I'll probably install a small undersink heater in the kitchen for instant hot water.

Also, we will never run out of hot water when multiple people take showers.

Overall I've concluded that it was a worthwhile investment.


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## sstanis (Feb 1, 2007)

Warm guy

I should ahve included an option in my post concerning propane tankless water heaters.  I agree if they are an option, then on should go with a propane tankless.  I am not knocking gas-fired tankless.  Just knocking electric tankless for the reasons stated.  But you are correct a propane tankless combined with propane dryer is an excellent option.

What scares me is that at least in the Northeast rural areas, not urban or suburban, developers are going into areas without supply.  So as a cost savings to them, they only run one supply=electric.  Then all appliances, heat, and so on are all electric.  We are achieving a point that at "peak times" the grid becomes taxed.  Especially around in a 100 mile radius of NYC, where when ConED, LIPA, PSEG, or LIPA try to put up a new plant they always get stopped in the development stage.

The real issue when you look at it is storage.  No one has invented a viable, non-costly way to store electrical energy.  Considering that other than peak loads alot of energy is wasted.  Not like one can just shut-down a coal powered plant or a nuke plant, they go full bore 24/7 other than maintence.  I guess alot of that has to do with fed gov't.  B4 oil crises of 70's a good portion of electricity was produced by fuel oil.  The fed gov't realizing that economic activity is directed tied to stable energy supply and prices gave huge incentives for coal, since it was domestically produced and no foreign power could "choke us off."  Now with global warming and other things, the "real" cost of electricity is going to go up.  Now turbines, which can be gas-fired or oil fired, and are on avg 60% efficient are a viable option but the power suppliers just get stuck on trying to put one up.


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## cbrodsky (Feb 4, 2007)

sstanis said:
			
		

> Warm guy
> 
> I should ahve included an option in my post concerning propane tankless water heaters.  I agree if they are an option, then on should go with a propane tankless.  I am not knocking gas-fired tankless.  Just knocking electric tankless for the reasons stated.  But you are correct a propane tankless combined with propane dryer is an excellent option.
> 
> ...



I agree with the comments that electric tankless "on-demand" heaters are setting up the power grid for major problems with peak demand as millions of people all take showers in the morning.

I think one of the best long term solutions could be to continue using traditional tank heaters connected to an intelligent utility network where they could serve as storage devices that can absorb off-peak demand, and help alleviate spikes during peak demand periods.  IBM and other companies have programs in this area and I think it is a great opportunity.  As noted above, storing electricity is not easy, but a highly insulated electric water heater is a pretty darn good place to store excess power being generated in the middle of the night that can't be sold.  For example, a user can be pretty sure that there will be large blocks of time that they will not be taking consecutive showers that would strain the hot water heater.  During these periods, a much lower setpoint could be tolerated, but if excess low-cost electricity is available, it could "store" this in advance a bit by going to a higher setpoint.  This just requires more focus on reducing losses from poor insulation.

One of the most interesting electric storage projects I've seen was on top of a mountain next to Chattanooga, TN.  They cratered out the top of the mountain, build a gigantic reversible pumping/generation system deep inside the mountain and a huge shaft from a nearby river to a lake in the top of the mountain.  In the middle of the night, they pumped up the lake with low-value excess electricity, and in the afternoon, they'd drop the water back down to generate high value peak electricity.  Instead of a dam, you build a lake, and it's somewhat "green."  I was an engineering undergrad student at the time and had a real problem with this entire tour until someone finally explained to me the peak vs. non-peak pricing more than overcame the thermodynamic foolishness of such a cycle 

-Colin


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## TrailRunner (Feb 7, 2007)

I didn't believe the claims of those selling tankless water heaters and I couldn't find any utility that really did the calculations, so I created this spreadsheet, which is attached.  The spreadsheet allows you to compare tankless electric vs. tankless natural gas vs. conventional gas.  It shows you the cost of ownership from year 1 through year 15.  For me, it was going to take over 10 years to pay off the tankless units.  You can customize by saying how many gallons you use, cost of units and installation, efficiency ratings, and the utility rates in your area.  If you get rich off of my spreadsheet, send me a postcard.

Cheers,

Dan


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## TMonter (Feb 9, 2007)

> The total cost, including installation, was 1599 + $20 to dump the old water heater at the dump.
> 
> In the month prior to installation we used 38 gallons of propane, and in the month since installation we’ve used 21 gallons.  Note however, that it has been warmer this last month, so we’ve hung laundry out instead of using the dryer.  The only other thing we use propane for is the stove.
> 
> ...



This scenario is somewhat flawed as you are including other behaviors into the mix.

To compare here is my situation:

I used on my old Tank-type heater on average 35 therms a month at $1.16 per therm. The old water heater had a new efficiency of 0.58

When I looked at the Bosch Aquastar it was going to cost me about $1600 to install one and efficiency was 0.87

A new tank-type heater with R-20 insulation and an efficiency of 0.64 was going to cost me $425

So to do a direct comparison

Delivered energy in the initial case was 35*100,000 or 3.5 million btu, actual usable energy was 3,500,000*0.58= 2,030,000

With a Bosch Aquastar I would have to purchase 2.33 Million Btu of heat for the same amount of water. This is about 23.3 Therms

With a Standard Tank type I need: 3.17 Million Btu of Heat delivered or 31.1 Therms

So the monthly savings on a Tankless over a tank-type is: (31.1*$1.16)-(23.3*$1.16)= $9.048 per month or $108 per year

Therefore to make up the cost of a tankless unit, assuming no repairs or problems with either unit, I would have to run the tankless unit at current prices for 11 years. That's a long payback when I can put $1200 bucks in a mutual fund at a return of 8% average and in 11 years have $2800

Tankless type heaters under most situations do not make sense financially.


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