Looking for a new water heater?  Ours is getting old and with the Federal Tax Rebates for energy efficiency, it was time to look into the area.

AO Smith makes the Vertex 100 water heater that is very efficient at 96% thermal efficiency. The 50-gallon Vertex delivers hot water output that exceeds a 75-gallon atmospheric gas water heater. The Vertex can deliver continuous hot water flow of over 4 gallons per minute. It has a LCD display allowing precise temperature control. The Vertex 100 has a dedicated loop for radiant hot water heating systems. Dimensions are similar to a standard 50-gallon power-vent water heater. 100,000 BTU input per hour. Jay Leno and Ed Begly Jr have these units.

Vertex 100 does requires PVC, CPVC or ABS pipe venting not traditional metal venting. It also requires a separate intake PVC airline. The unit requires AC power to run its fan. This fan makes this unit’s operation a bit noisy.  It is probably best suited for a garage. Vertex 100 water heaters cost roughly $2000+ installed minus the Federal and any local utility rebate. Our local utility PG&E has a $50 rebate.

How does it compare to a ‘normal‘ energy saving water heater? AO Smith’s Conservationist series 50 Gallon model has an Energy Factor of 0.62. and 40,000 BTU input per hour. Approximately 80% efficient. It costs about $1300.

An entry level model, ProMax 50 Gallon Water Heater costs about $600 and has an Energy Factor of 0.58. Approximately <80% efficient.

It it worth spending $800 more for the Vertex 100? Will you recoup the price difference over the unit’s six year lifespan?

Clearly without the rebate, the price difference is a huge.  A rough estimate of saving $10 a month in gas x 6 year lifespan = $720.  If it lasts longer than six years, then you are in the right zone. If you need to install a new PVC exhaust an intake pipe, there goes the savings. Consumer Reports states “..high cost offsets much of the roughly $70 per year the Vertex will save you.”

We recently installed The Vertex 100 water heater and so far so good.

Alternatives to the Vertex

Phoenix Evolution is a 96% efficient, 135,000 BTU water heater that can provide hot water for the domestic system, radiant heating, hydro air and even solar assist all in one appliance that qualifies for the Federal rebate.  55-119 Gallons. It also needs PVC Venting. The catch, the Phoenix costs several thousand dollars.

Heat pump water heaters

Heat pump water heaters are another way of keeping your energy bill down. General Electric Co. and Rheem Manufacturing Co. make these heaters, which suck up heat from the air in a basement or garage to assist heating water for the home. It’s like a refrigerator working in reverse. According to Rheem officials, this machine has an operating cost of $225 and $280 per year or about half of a common electric water heater. These heaters are not cheap, costing nearly $1500 for a 50 gallon model, three times more than a normal electric water heater, and five times more than a natural gas powered one. Payback time could be three to four years.

There is a Federal Energy Efficiency Tax Credit on Qualifying Gas, Oil, Propane Water Heaters as well as Electric Heat Pump Water Heater and Solar Water Heaters. If your water heater is on its last legs, you might as well upgrade now and save some money. Newer water heaters require less energy and time to heat water. Reduce the waiting time between showers and doing laundry.

For 2011, the Federal Tax Credit for energy efficiency drops to 10%, up to a $500 maximum. (2010 Federal Tax Credit information)

• $300 cap for water heater
• Gas, Oil, Propane Water Heaters must have Energy Factor >= 0.82 or a thermal efficiency of at least 90%
• Newer Hybrid water heaters are also available
• Electric Heat Pump Water Heater requirements are the same as ENERGY STAR: Energy Factor >= 2.0.

• Existing home and principal residence.   New construction and rentals do not qualify.
• Expires December 31, 2011 – Consult the What other rebates are available? below for other possible rebates.

The 2011 tax credit reverted to  2005-2008 levels. Anyone who previously took advantage of the program can’t apply for incentives that exceed $500.  IE If you claimed $500 between 2005 – 2008 on a previous energy efficiency project, or at least $500 tax credit from 2009 – 2010, you are ineligible for the 2011 energy efficiency tax credit.

If you used say $200 of the $500 energy efficiency tax credit from 2005 – 2008, and did not utilize the 2009 – 2010 energy efficiency tax credit, you would still have a $300 credit available.

Federal Energy Efficiency Tax Credit on Qualifying biomass fuel stoves or Wood Heat Stoves, Pellet Stoves, Fireplace Inserts.  There is also a Federal Tax Credit for Energy Efficiency on Water Heaters, Wood Heat Stoves, Pellet Stoves, Furnaces and Boilers, Geo-Thermal Heat Pumps, Windows, Doors, and Skylights.

Consider an on demand Tankless Water Heater if your situation allows for it.  Most need ready access to a good sized gas pipe and exhaust vent.

Solar Water Heaters are covered if they are EnergyStar certified. The Federal Tax Credit for solar water heaters is 30% of the cost including installation and labor. It expires December 31, 2016.

AO Smith makes the hi tech Vertex 100 water heater that is very efficient, but requires PVC pipe venting not normal metal venting. Also consider installing radiant floor heating instead of using a gas furnace as these newer water heaters support radiant heating.

This credit reduces the amount of tax you owe. The credit is a reduction of total income tax at the bottom of your return. This tax credit is a non-refundable tax credit. Consult your tax adviser for details. Use it or lose it!

Double dip! Local utilities like PG&E have their own rebates for Energy Efficient Appliances.

Note: It is difficult to find larger sized water heaters with Energy Factor’s not qualify.

Be sure to check out our reduce water heater use, water saving tips and ways to save energy.

Here are a couple easy ways to reduce the amount of energy your water heater uses:

1) Lower the setting so that water is heated to about 110-120 degrees. Many are set to 140 or higher.

2) Wrap the water heater in an insulating thermal blanket. Cost about $10. Possible savings of 4-9% on your water heating bill. Also insulate the hot water pipe, cost about $2 per foot.

3) Use less hot water.  Take faster showers and use low flow showerheads and faucet aerators to save water.

4) If you are in earthquake territory, strap your water heater to the wall and install flexible hoses.

5) Wash your hands with cold water. Hot water hasn’t been proven to remove germs better.

Consider a tankless water heater when replacing a water heater. These new models heat water on demand, not continuously.  They have Energy Factor (EF) ratings of about 0.80. They are not for everyone, I was unable to use one because of the gas pipe and exhaust requirements.

Alternately you could replace your water heater with a modern more efficient unit.  Natural Gas models have up to 0.67 Energy Factor (EF) ratings now. Modern electric ones have a 0.93 Energy Factor.

A Tankless Water heater produces hot water as hot water is requested.  Traditional water heaters have large tanks to store and heat water, so they continually have to keep the water heated.

A Tankless Water heater uses electricity or gas to quickly heat water that is needed.  Different units are capable of product hot water at different rates. Gas units generally perform better.  Large units or multiple units are required if you need to have say a kitchen sink, shower, and other things operating at the same time. Savings up to 30% can be realized.

everun even makes a stylish tankless water heater that you need not hide. They cost from $200 to $1200.

Some key items to look for are electrical or gas needs of the unit, and venting requirements. Many gas units require a certain size of gas inlet and exhaust vent size.  I found these requirement prohibitive in my installation attempt.  Electric tankless do not require expensive vent piping.

Climate is also a factor. Those living in very cold areas with water barely above freezing in the winter should think twice before going tankless.

Federal tax credits for energy efficiency are available to help reduce the cost. Many local gas utilities also have rebates.

Be sure to also consider Hybrid Water Heaters or an Energy Efficient water heater.

Reduce Water Heater Energy Use with your present water heater.

We recently covered Tankless Water Heaters. A new product is the Hybrid Water Heater. Like ones from Eternal and GE.  Hybrids have 2 modes of operation. With low flows it has a fixed gas input rate from the preheated water, with higher water needs, it uses a flow sensor like a tankless water heater. GE claims their electric, Energy Star Qualified Geospring Water Heater uses up to 62% less energy than a conventional water heater, and saves $300 a year in energy costs. It has a high energy factor of 2.35. Consumerreports.org has a mini review, their October 2010 print issue has a bigger review.

Hybrid Water Heaters are much higher in efficiency than a regular water heaters, but holds less hot water, usually less than 50 gallons.  Recall that Tankless water heaters may not have the capacity to satisfy multiple water uses at the same time and have issues when temperatures are cold. Energy Star standards are emerging for these new items. These units can be up to 50% more efficient.

Downsides:

1. They are taller, up to 7 feet tall
2. Hybrid water heaters need space to capture uncooled air, upto 1000 sq ft
3. If you do no have a nearby drain, a condensate pump ($150) is needed
4. They are noisier than conventional water heaters

These items are not cheap, they start around $1600 – $2000 for a 50 gallon, 15GPM GE GeoSpring Hybrid Water Heater model. It is projected to have a 56% annual savings, resulting in a short 4.5 year payback time with Federal Tax Credit.  10 year warranty.

The 50 gallon Rheem HP50RH hybrid water heater is slightly cheaper at $1600 – $1750, 58% annual savings, 4 year payback, 10 year warranty.

Most Hybrid Water heaters are covered by the 2010 Federal Energy Tax Credit, so you can save additional money by purchasing it.