Normally people tend to wait until hot water heater failure before replacing a hot water heater. But I’m going to argue if you have an electric hot water heater, you should do it now regardless of age.
If you have an electric hot water heater you know they’re expensive to run – estimates for a common household are about 5000kWh annually which means about $550/year for an average power cost. Electric heat pump water heaters however are about 4-5 times more efficient than a traditional unit.
The cost of heat pump water heaters has fallen significantly since their introduction – Lowes carries a 50 gallon unit for under $1000. While that’s double the cost of a traditional unit there are a few things to consider. First off rebates abound – PSE and Seattle Light have $500 rebates basically eliminating the cost premium. On the flip side you do have to consider installation (if you’re not into DIY) and recycling (some scrap metal places will pay you for the materials, others will charge a disposal fee).
Best case you’re paying $600 with tax after rebate and DIY install. Worst case figure $1500 with install and no rebate. In Western Washington PSE territory you could save about $350/year – meaning you could reach ROI in 2-4 years. If you live in SoCal and have SDG&E you’ll get only a $250 rebate but with power rates of 20-43¢/kWh, the heat pump water heater can save upwards of $720-1548/year meaning it will pay for itself in 1-2 years.
So what’s the downside?
Heat pump hot water heaters make noise and will cool the space they’re placed in (they move heat from the room into the water). They’re best suited to utility rooms or garages rather than closets.
Why not Tankless?
Tankless is a great technology but still less efficient than a hybrid – while you don’t lose heat from the tank, the actual method of heating water is much less efficient than a hybrid. It also requires massive electrical upgrades to make it work. For example you may need 2-3 40 amp, 240v circuits – which for example is more power than the power feed to many homes. So tankless is a great technology which an be impractical to implement for many homes. On the flip side a heat pump hot water heater generally requires no or minor infrastructure upgrades when replacing a traditional water heater.
The Eco Side
Of course any time you can save power it makes a big impact on the environment. Over the life of a heat pump hot water heater you’ll not just save thousands of dollars but also tens of thousands of pounds of CO2 – an average 44000lbs over a decade.
Heat pump water heaters can deliver great ROI with a modest upgrade cost. If you have an electric hot water heater today, replacing it now rather than waiting for failure can save a nice wad of cash (not to mention avoid a flooded basement).