Domestic Hot Water costs can vary depending on your use and the cost of various energy sources.
Getting a Hot Water Heater installed can be quite costly due to the newer technology and the high cost of labor. A range of $500 to $4,000+ is typical with the lower costs being for replacement of an existing small Electric or B-Vent (existing chimney) Gas tank-typie heater. For low or modest users of hot water it may not pay off to purchase the premium newer systems. (continued below the calculator)
What does hot water cost each year?
A simple operating-cost comparison for a household of about three people. All six heaters provide the same amount of hot water.
Estimated fuel cost per year
Change the prices to match the usage charges on your bills. This compares energy cost only; equipment, installation, maintenance, fixed service charges, and heating or cooling effects on the surrounding room are excluded.
See and adjust the assumptions
Default efficiencies: electric resistance tank 90%; condensing gas/LP tankless 93%; conventional gas/LP tank 65%. Heat pump calculation blends compressor COP with backup resistance use; its resulting simplified COP is —. The 20% backup setting is a favorable scenario, not a measured national average; 35% is a useful comparison from field reporting. Appliance efficiency and actual use vary. For propane, 91,500 BTU/gallon is assumed; a therm is 100,000 BTU and a kWh is 3,412 BTU.
My own experience is a good indicator of these choices. Our Florida cottage has a 30 gallon tank type electric hot water heater and the electric rates are quite low. When this needed replacement we used the same size and type of tank – $600 installed.
Our larger New England home had an 80 Gallon Gas tank hot water heater vented through the sidewall (power vent). We replaced this with an instant gas hot water heater (condensing type) which resulted in a very large reduction of our gas use. Since the existing tank was 20 years old a replacement was due – so stepping up to a more efficient system paid off. If we didn’t have reasonable Nat Gas (and expensive Electric!) at this home, I would have considered a heat pump water heater. As it stand, the tankless gas model saves us over $300 a year in energy costs.
Note: These are all rough calculations and only take cost of the fuel into account. If you live in an area where a good % of your Electricity is generated by renewable (hydro, solar, wind), you might consider a heat pump water heater due to the lesser use of fossil fuels.
In the end, these are individual decisions – this article and calculator are simply examples of one part of the decision making process.