Domestic Water Heater Replacement

My cousin Michael is a plumber in New England and has done his fair share of water heater repairs.  Anytime someone asks him to fix their hot water heater, he says “Surely it must be broken, why would someone want to heat water that is already hot!” It’s his sarcastic way of informing you that its called a water heater, not a hot water heater.

We currently have a A.O. Smith ProMax Model GCV50 101 that was installed when our house was built in 2006.  This 50-gallon propane water heater has a 6 year warranty, and given the amount of lime found in our water supply this tank is operating on borrowed time.  We expect it to fail sooner, rather than later.  Since installation it has been problem free and provides ample hot water for our household. This unit is doesn’t win any awards for efficiency.  With an energy factor of .58 (today’s lowest EF values are .62) it is estimated to use 284 thermal units per year.   The cost of propane has been steadily climbing and is now $2.20 per gallon, as a result we pay approximately $625 annually to heat water. I learned quite a bit over the last few months about water heater installation and operating costs and have concluded that we will continue to maintain our existing 50-gallon propane water heater because its just not cost effective to replace it. Over the summer I replaced the anode rod with a magnesium version and it is flushed twice per year which may explain why it has surpassed its mean-time-between failure (MTBF). Replacement cost of our existing propane water heater is currently $599.95 at PEXSupply.com.

In an effort to be prepared when the unit fails I contacted a solar installer in Austin, Texas to get a quote on solar water heating.  Prior to receiving a quote I was sold on the idea of the “free” hot water, that the sun could supply.  Our electric provider, Pedernales Electric Cooperative (PEC), does not offer any rebates for solar domestic water heating solutions.  If we were inside the city limits we could take advantage of the generous offers available through the City of Austin.  Our initial quote was $6,800 before Federal incentives.  The solution would also include a standby electric water heater that the installer said would cost about $20 per month to run.  I was surprised at the required investment for switching to solar, without state, federal, and utility rebates it’s cost prohibitive and we would never see a return on our investment.  Since professional installation costs were prohibitive I started to investigate other sun powered alternatives.

Last year I also looked at affordable solutions from Heliatos such as the Complete 8 Panel Solar Water Heater Kit which retails for $1080.  Their easy to install do-it-yourself kit seemed like the perfect solution. Unfortunately at the time the Heliatos kits did not offer freeze protection, however today they two new offerings the GS and the GH which offer freeze protection down to -17 degrees.   The pricing on these kits is very competitive and is an option we will investigate further.

Another easy do-it-yourself idea is to create a Batch Solar Water Heater. Kyle Bostic whom also lives in Texas  built his own batch water heater watch his well documented video Batch Solar Water Heater 4 Month Update on YouTube.  Batch water heaters are typically used to preheat water before it enters your existing water heater.  They are used in addition to your existing water heater, not as a replacement. The cold water line from the street would go to the batch water heater cold input and the hot output line from the batch water heater would go to the cold input of the water heater inside your home. In order for me to install a similar solution I would have to place a batch water heater close to the house.  Running water pipes underground over long distance would cool the hot water produced by the batch heater rendering it ineffective.  Although I did identify a potential location close to the house, it doesn’t receive sunshine throughout the day.  The location of my existing cold and hot water lines introduces additional challenges, I would have to drill through the concrete masonry exterior of my home to connect the batch water heater to my existing tank.  I considered placing a batch water heater on the roof, for a second… It would be incredibly difficult to lift a 40-gallon water heater onto the roof and since each gallon of water weighs 8.34 LBS a full tank would tip the scale at almost 450 pounds which would surely require additional reinforcement of the roof.  With recent freezing temperatures in Austin, Texas  careful consideration must be taken to ensure that the pipes are well insulated and do not burst, this may result in draining the system during a short period of time in the winter.  I found Kyle’s solution very effective implementing a batch water heater to preheat water is an incredibly cost effective solution at under $150.

A neighbor suggested that I investigate tankless water heater solutions.  He said that he watched the episode of This Old House – How to Install a Propane Tankless Water Heater and Expert Richard Tretheway stated “They are more efficient than tank water heaters”.  Heck even the he U.S. Department of Energy’s Energy Efficiency and Renewable Energy website, states that tankless water heaters can be 24 to 34 percent more efficient than a traditional tank-style water heater, depending on a home’s daily demand for hot water.  With claims on 34% efficiency I was pretty excited! It certainly seems plausible given that tank water heaters keep the water inside them heated throughout the day, whereas tankless water heaters only need to heat water on demand.  I spent a month casually researching tankless water heaters and I was surprised to learn that in some cases they can consume more energy that a tank water heater.  Tank based water heaters take time to heat water.  Electric water heaters generally heat water at about 20 gallons per hour whereas gas water heaters easily double that figure.  On the other hand tankless has to be able to heat the water on demand, as a result they can consume a significant amount of energy in a shorter period of time.  As an example, my existing tank based propane water heater generates 37,000 BTUs compared to the proposed replacement tankless unit that generates 190,000 BTUs.   Furthermore, like a propane tank based water heater, tankless units also have a pilot light that remains running 24/7.  Tankless unit controls also require electricity to run which remains on 24/7.  I spoke with an honest plumber in Leander, Texas who has installed over 100 tankless units and his first question was, “Why do you want tankless?”.  His goal was to attempt to dispel any myths that I may have believed about tankless solutions.  Surprisingly his first comment was that I most likely wouldn’t see a significant decrease in propane consumption.  I sarcastically spouted off, “But what about the 34% potential savings stated by the US DoE!”…and he giggled.  He also told me that the technology had advanced quite a bit over the past several years and they are very reliable, however when components do fail they are generally more expensive to repair.  One of the most common problems is lime scaling.  If there is lime content in your water supply you will have to flush the tankless system as they become less efficient with lime deposits.  He mentioned that you could pay a plumber $150 to do it, or you could do-it-yourself for about $10 with a jug of vinegar and 40-minutes.  This process should be done two to three times per year.  Matt Risinger put together a great YouTube video Tankless Water Heater Descaling – How to Flush that details the process. While we were discussing the installation over the phone he directed me to Michael Chandler’s article - Why add a tank to a tankless water heater which was published in Fine Home Building magazine.  Michael proposes solutions to two other common tankless problems; the Cold Water Surprise effect a.k.a. “Cold Water Sandwiches” and the Dropping Pressure effect.  After our brief conversation, I felt confident that the installer was well educated on tankless installations and decided to get a quote.  I sent him pictures of my existing water closet and he was able to give me a quote for a Rinnai based system.  Fortunately the diameter of my propane line was wide enough to accommodate the unit and I already have a water recirculation pump however I would need a new vent to support a tankless solution.  His quote for the tankless water heater was $999.95 and installation was $1,500.

The plumber from Leander, Texas stated “I have tankless at home, and if I were to redo my home I would stick a 50-gallon gas water heater in and be done with it”.  He said that if I really wanted something that was more efficient I could consider  Vertex or Effex models from AO Smith for propane which sell through PEXsupply.com for $2129.95 and $792.99 respectively.  Stephen Foskett replaced two 50-gallon water heaters with one Vertex unit and his use-case may be the best defense for the high cost of the Vertex model – three pre-teens!  See his article A High-Tech Water Heater? Yep! Introducing the A.O. Smith Vertex.

Although I don’t currently have a 220-volt connection in my water heater closet, I know enough electricians that it would be easy to get one setup quickly.  The benefit of electric water heaters is they are incredibly efficient.  Wait, did I just say Electric water heaters are efficient?  Yep, I sure did!  Every watt of power generated into the heating elements is transferred directly into the water, making them 100% efficient.  They are also dirt cheap, a 50-gallon GE Medium 6-year water heater (model GE50M06AAG) costs $254 at the Home Depot, and the 9-year (model PE50T09AAH) runs for $338.  The highly rated Rheem 50-gallon Marathon electric water heater (model MR50245) is available for $754. For electric efficient solutions he recommended looking at the GE Geospring Hybrid Water Heater which sells at Lowes for $1199.00.  It’s the cost per kWh that really gives electric water heaters a bad rap.  Even though electric is more efficient, it is a more expensive form of energy in most parts of the country.

I was beginning to see why the majority of homeowners have a standard tank based Electric or Gas water heater.  Most of the efficient solutions are simply too cost prohibitive.  The lackluster return on investment (ROI) for upgrading to that highly efficient unit does warrant its purchase.  As an example to replace my existing water heater with a tankless unit I would spend an additional $1900.05 ($2,500 parts/labor/installation of tankless solution – $599.95 replacement cost of existing 50-gallon propane water heater) to save $270.60 annually.  Assuming no maintenance costs the payback for tankless would be just over 7 years.

With these extended payback periods its easy to understand why most consumers don’t opt for more efficient solutions.    There are many ways in which we can optimize the existing tank to ensure that it is performing efficiently.  

If you plan on keeping your existing solution there are several opportunities to improve its efficiency see waterheatertimer.org’s 9 ways to save money with a water heater.  The easiest cost savings exercise is to turn your water heater off when you are not using it, such as when you leave for vacation or when you are sleeping.  My father has a circuit panel inside his home and he turns on his Electric water heater 15-minutes prior to showering, and off after getting dressed.  This is a bit easier said than done with a gas fired water heater.  Although it is estimated that the pilot light alone uses 2.75 gallons of propane per month, it would be too tedious to turn off the gas and reignite it 90-minutes before showering each day but you could easily make an argument for turning it off when you leave for vacation.  If the manual process of turning your water heater on/off is too labor intensive, consider investing in a timer.  Waterheatertimer.org’s Compare 16 Electric Water Heater Timers Plus Two Gas Water Heater Timers post is an exhaustive list that provides incredible detail on support solutions.  In an effort to reduce our propane consumption we installed a gas water heater timer from American Pacific and combined it with the APC Power-Saving Timer Essential P4GC.  Although it took a few weeks to get the schedule just right we found that we have reduced our propane consumption considerably.  The biggest challenge was identifying the exact time to restart the water heater to ensure that the water was hot before we jumped in the shower.  With a recovery time of 37.87 gallons per hour restarting the water heater 90-minutes before we get out of bed in the winter was perfect.

When the time comes to replace our existing water heater I now feel better prepared, I hope this information helps you make a more informed decision on your next water heater as well.