We have needed a new water heater for a few months, since discovering that our hot water was slightly discolored with rust. (Harmless, but kinda gross and indicative of bigger problems with our nearly 20yr old water heater.) That need increased this week, when I discovered that it had begun to leak.
Thus, research ensued. I was already familiar with the Federal incentive for high-efficiency home improvements. (30% of cost, labor included. Learn more at the energystar.gov website.) I also learned that our power company, PSE offers a 150$ or 200$ rebate (for units with an efficiency rating of .82 or higher, or .90 or higher accordingly. link), depending on the efficiency of the model. For water heaters, the only options on the market that meet the efficiency requirements set by the government program and PSE are what are called ”tankless water heaters”.
This was enough info to start calling contractors… I used highly rated listings on the convenient Angie’s list website to find the best price, and the best product offerings. Most tank based systems sounded like a ~1500 replacement, which would have been even less if our old unit wasn’t a more costly direct vent model. The premium is required of a water heater that can vent out a side wall instead of the roof. (Traditional tank-based systems are closer to 1000$ installed.)
This put tankless systems in a competitive price point, with the combination of PSE and Federal rebates. I found that the Fast Water Heater company had particularly good prices, and they offered a extremely interesting product for a great price. They had a traditional tankless system by Noritz with an efficiency rating of .82 for 2229$ installed, which seemed like a good price. They also had a “hybrid water heater” by Eternal for 2569$. (eternalwaterheater.com)
The hybrid offered a couple benefits over the traditional tankless unit:
- Even higher .96 efficiency rating. (eligible for additional 50$ rebate from PSE.)
- It is designed around a small 2 gallon “tank” which means that you get hot water more quicky, since it doesn’t need to start up the gas to get hot water flowing.
- It is self cleaning, meaning that there is less need for regular cleaning of the heating element, which is required for tankless systems.
My enthusiasm for the feature list was slightly moderated by some real concerns too: The Eternal product has a great 10 year warranty, but it is hard to know how reliable it is since it is based on 3 year old technology. The hybrid units are also larger than the true tankless units; It would save space compared to the old 50 gallon tank, but not as much.
I decided to go for the hybrid for the reasons identified above. I felt like the point of the Federal incentive is to drive the adoption of new technology, and in a way, the government is paying us to take a gamble on new technology, which will over time result in greater adoption and better quality products. I sure hope that I bet on the right product, but only time will tell. What I can say now is that it is pretty nice to be able to clean out the hot tub, and fill it right back up with hot water; no need to wait a day for the water to heat up.
Note: There is one important detail that is not entirely clear when comparing tankless units. They all come with a GPM rating, which is used to determine which model is big enough to meet your home’s needs, but this rating is misleading. You might calculate that your home needs 5gpm of hot water for peak usage. (ex: washer, dishwasher and a shower) This does not mean that a unit rated for 5gpm unit will meet your needs in a location like Washington. The rating on the unit is based on the assumption that the water heater only needs to increase the water temperature by a certain amount, maybe 30 degrees. In Washington State, the water temperature coming into the house is quite cold, so it will take more energy, and a higher powered unit to raise the water temperature by a greater amount. The eternal unit we purchased is rated for up to 14.5gpm, which will probably be closer to 7gpm maximum here in WA.