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Weighing the 'green' option for hot water

Marc Lefkowitz  |  05/23/12 @ 2:00pm  |  Posted in Home efficiency

Being a first-time homeowner is often scary, messy, costly and ultimately one of the best providers...of valuable life lessons. When it comes to repairs-especially the emergency kind, like a hot water tank gushing 40 gallons of rusty water on to the basement floor -there's no better time to evaluate your sense of preparedness, budget and income.

Let's just say, when I got the call to "hurry home, there's rusty Niagara Falls in our basement" I wasn't rubbing my hands thinking, "great, here's my chance to 'green' my energy use." And I'm someone who cares about this stuff. No, like most families these days, the budget never seems to be at the ready for a big ticket repair, let alone in a position to upgrade or green my home.

We can't say we weren't warned. If you're lucky, you have some advance warning in the form of a slow leak. Ours highlighted an important lesson that pits my 'wants' to be greener in our home with the needs of budgeting on a limited income. If income wasn't an issue, I would have told the plumber when we first noticed the leak to order the most energy efficient tank. Instead, we did what most people do – we called the plumber when Niagara Falls broke loose and he picked up a 'good enough' standard tank; the brand and model that they like for reasons that probably balance a little bit of everything (with an emphasis on affordability and durability).

I consider our story fairly typical–we were happy they could bring a new unit right over. If I was a betting man, I would wager most people get whatever the plumber chooses because they would rather have a hot shower the next day.

Sure, hot water tanks going are the extreme case – most opportunities to green your home energy use thankfully can be mulled over. Unlike our insulation project, I didn't get around to researching all of the options for hot water tanks and decided based on what met our threshold for cost and efficiency.

In the case of hot water tanks, most of us aren't prepared-and maybe shouldn't-pay double the going rate for a high efficiency hot water tank. There are some major caveats to this- most notably, if you plan on staying in your house for the next 15 years.

Now that our new fully functioning hot water tank is installed, I'm interested in knowing, would it have been worth it-with an eye on how long it would take to pay for the difference-between a standard efficiency tank like we got (58%) versus a high efficiency tank (which can be rated in the 90% range) in natural gas saved?

The leak did force us to confront the issue early-we had estimates on replacement. I really thought that I would take advantage of the early warning and make an informed decision that could lead to a better, more energy efficient outcome. The plumber came out a few weeks ago and shared his opinion on domestic hot water. He's not very excited about the new fangled tankless on-demand units (solar-powered didn't even cross his mind). Cost-which he quoted around $2,500-$3,000 installed-is an issue since the amount of gas a hot water tank uses on an annual basis is small, he said, relative to our gas-fired boiler. It would take the entire lifespan of the unit to pay for the premium of a tankless with the energy savings (especially with natural gas prices dropping like a stone. If you're staying put for 15-20 years, it might be worth it.)

Positives for the tankless-it uses less natural gas, a fossil fuel contributing to climate change-and it's a good option for a big family, like three kids and two adults, in providing unlimited hot water for showers and appliances.

He has installed high-efficiency tanks and says customers are happy, reporting "significant" reductions in their gas usage. EPA's EnergyStar site claims that the 'average' American household racks up 15 percent of its energy use from heating water. High efficiency water heaters use 10 to 50 percent less energy than standard models, EPA writes, saving homeowners money on their utility bills.

Using this online payback calculator for hot water tanks, a 92% high efficiency, powered-duct tank versus our 58% efficient model saves around $56 a year for our scenario which is two adults and a young child using about 40 gallons of warm water a day* with energy costs per 'therm' in Cleveland averaging $0.731. The upfront cost difference between these two is about $800-1,000. Over the course of 13 years, the savings with a high efficiency unit is $736.

Other sources make a more conservative estimate on the savings. This post on the site HouseLogic explains that high-efficiency gas storage are just like standard gas water heaters, but with more efficient burners, better insulation, and other upgrades that make them about 7.5% more efficient, saving the average household about $30 a year. At their estimated 13-year lifespan, a high-efficiency model saves $390, meaning on a pure cost basis you wouldn't break even.

In retrospect, if I would have spent another $800 or so, could I have done something more sustainable by using 7% less gas year over year? Maybe I'm telling myself this to feel better, but with a new unit versus the leaky 25-year old one, by default did we gain efficiency (new tanks have more insulation and an electric starter for the pilot adds efficiency)? In the end, I'm comforting myself by listening to the plumber when he tells me to (try and) save up the extra couple of thousand dollars for a high efficiency boiler. Meanwhile, I might splurge for one of those $25 fiberglass insulating blankets. Trade-offs should be expected on the long road to a green home.

*Our household's estimated daily hot water use: Two adults taking avg. 8 minute showers @ 2 gal./min., a toddler taking roughly a 20 gal. bath every other day; the dishwasher using an average of 6 gal., averaging roughly 5.5 gal. in warm wash for clothes per day plus about 2 gal. incidental.

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