Water Heaters

When we think about where our energy dollars go, we notice the obvious choices we see every day around the house – lights, kitchen appliances, television, and air conditioning and heating. But we tend to overlook the expense of heating water for our daily needs, however 25% of each energy dollar goes to heat water.

Like most appliances, water heaters have improved greatly in recent years. Today’s models are much more energy efficient. That’s why you probably couldn’t replace your existing water heater with the same exact model – and you probably wouldn’t want to. Instead, you may be able to purchase a more efficient water heater that will save you money on energy each month. That’s why you shouldn’t just consider the initial purchase price – think about how much it costs to operate. You could save hundreds of dollars in the long run.

Look at it this way – some cars get 15 miles to a gallon, while other, more efficient vehicles can go 30 miles or more on a gallon of gas. In the same way, some water heaters use energy more efficiently. Buy one of those and you’ll spend less money each month to get the same amount of hot water.

Water Heater Design

The average life expectancy of a water heater is 13 years. That’s how long you’ll be living with the decision you make now. If you choose a water heater that saves you money, the savings will continue for years.

If your new water heater saves an average of a dollar a month in energy costs, that amounts to a savings of $12 a year – or $156 over its expected lifespan.

Electric vs. Gas

Your first decision should be whether to buy a gas or electric model. If you’re replacing an existing water heater, check to see what type you have now. Is it gas, electric or even propane? Do you have a natural gas outlet available at the water heater, or only an electric outlet? Many homes are not equipped with natural gas. Obviously, it would not be a good idea to buy a gas water heater if you have an all-electric home.

Which is better – gas or electric?

In almost all of Michigan, natural gas is the most economical way to go. It usually costs three times as much to heat the same amount of water with electricity as it does with gas.

If you have an electric water heater and a gas furnace or stove, you may save money in the long run if you extend the gas line to your water heater.

If you live in a rural area that has propane service instead of natural gas, propane is usually less expensive than electricity.

Tankless or On-Demand Water Heaters

Tankless Water heaters are also called on-demand water heaters. These provide hot water right where you need it, when you need it, without a storage tank. Using electricity, gas, or propane as a heat source, tankless water heaters, in some cases, can cut your water-heating bill by 10 to 20 percent. The savings come by eliminating standby losses – energy wasted by warmed water sitting around unused in a tank.

Units large enough to supply hot water for an entire house can be located centrally. More commonly, tankless water heaters usually sit in a closet or under a sink where its hot water is used.

A tankless water heater can supplement a regular water heater in a distant location, or it can be used for all your hot water needs. But be aware that they aren’t appropriate for all applications, and that sometimes they won’t save that much energy or money.

Residential-sized gas-fired models that are now on the market supply only five gallons of water heated by 90 degrees per minute – a comfortable enough output for a house with one or two people. If you have a large family, however, and need to do laundry and wash dishes at the same time others shower, a tankless system probably won’t meet your needs. Electrically heated models provide even less hot water than gas models – more like two gallons a minute, heated 70 degrees.

Advantages and Disadvantages

Here are some advantages to on-demand water heating:

  • Tankless water heaters are compact in size and virtually eliminate standby losses – energy wasted when hot water cools down in long pipes or while it’s sitting in the storage tank.
  • By providing warm water immediately where it’s used, tankless water heaters waste less water. People don’t need to let the water run as they wait for warm water to reach a remote faucet. A tankless water heater can provide unlimited hot water as long as it is operating within its capacity.
  • Equipment life may be longer than tank-type heaters because they are less subject to corrosion. Expected life of tankless water heaters is 20 years, compared to 10 to 15 years for tank-type water heaters.
  • Tankless water heaters range in price from $200 for a small under-sink unit up to $1000 for a gas-fired unit that delivers 5 gallons per minute. Typically, the more hot water the unit produces, the higher the cost.
  • In most cases, electric tankless water heaters will cost more to operate than gas tankless water heaters.

Here are some drawbacks to on-demand water heating:

  • Tankless water heaters usually cannot supply enough hot water for simultaneous uses such as showers and laundry.
  • Unless your demand system has a feature called modulating temperature control, it may not heat water to a constant temperature at different flow rates. That means that water temperatures can fluctuate uncomfortably – particularly if the water pressure varies wildly in your own water system.
  • Electric units will draw more instantaneous power than tank-type water heaters. If electric rates include a demand charge, operation may be expensive.
  • Electric tankless water heaters require a relatively high electric power draw because water must be heated quickly to the desired temperature. Make sure your wiring is up to the demand.
  • Tankless gas water heaters require a direct vent or conventional flue. If a gas-powered unit has a pilot light, it can waste a lot of energy.

Buying Smart

Now that you know whether you want a gas or electric water heater, to buy smart, determine the size you need.

To do this, estimate how much hot water your family uses during its busiest hour. We call this the “First Hour Rating.”

Determine your “First Hour Rating” with this chart.

Your house has:
How many bathrooms? 1 to 1.5 2 to 2.5 3 to 3.5
How many bedrooms? 1 – 2 – 3 2 – 3 – 4 – 5 3 – 4 – 5
You need a First Hour Rating of: 43 – 60 – 60 60 – 70 – 72 – 90 72 – 82 – 90