Lower Electric Bills with a New Hot Water Heater

I recently faced one of the dreaded homeowner experiences - replacing an appliance. In this case, my hot water heater started going bad on Christmas Eve. So I went to Home Depot and started looking at hot water heaters. Most were in the $250 to $350 range. The cost per year to operate one of the standard water heaters was about $520 per year.

I wondered if I could pay a little more for an energy efficient hot water heater and save money in the mid to long term. I was not too optimistic because in the past, I did the math on solar panels on my roof and other energy saving devices and concluded that the payback time was way too long. My neighbor installed a solar hot water heater for $5,000 with an $50 dollar a month estimated savings. An 8-year pay back is still a little too long for me.

However, I stumbled across hybrid electric heat pump water heaters and EUREKA!

My current electric water heater is similar to the Whirlpool 50-Gallon 9-Year Regular Electric Water Heater that costs $398 at Lowe's. It costs $508 per year to run this hot water heater. I compared that to the more expensive GE GeoSpring 50-Gallon 10-Year Hybrid-Electric Heat Pump Water Heater that costs $1,199. This hot water heater costs $195 a year to run. That is a savings of $313 per year or $26 a month on my electric bill.

The difference in the purchase price of the two water heaters (after taxes) was $857.07. With a savings of $313 per year on my electric bill, I will have covered the difference in the cost in less than 3 years. After 4 years, I will have paid for the cost of the entire water heater. Since the Water Heater has a 10 year warranty, lets say that it dies in 10 years and 1 month (Murphy's Warranty Law). Over the life of the water heater, I will have saved $3,130 dollars.

Of course, I'm not going to just stop my research by looking at the money side. What does Consumer Reports say about Hybrid Water Heaters? "These have a conventional electric storage heater paired with a heat pump that extracts heat from the surrounding air and uses it to help heat the water. Models we tested used about 60 percent less energy than standard electric heaters, which account for about half of all water heaters sold. And while hybrids cost more than electric-only models, installation is similar and payback time is short.

Consumer Reports also tells me of the downsides (that is why I love that site). But hybrids also have their downsides. Because the heat pump is usually on top, they need as much as 7 feet from floor to ceiling. You'll also need up to 1,000 cubic feet of uncooled space to capture enough heat from the air, along with a condensate pump (about $150) if there's no drain nearby. Hybrid heaters are noisier than conventional storage-tank heaters, exhaust cool air, and can rob some heated air in winter." Click Here for the link to the full Consumer Reports Article.

So let’s see if I meet the minimum requirements:

• Ceiling at least 7 feet high – CHECK I have an eight foot ceiling in my garage.
• 1,000 cubic feet – CHECK with an eight foot ceiling, I only need a 10 x 12.5 foot area
• A condensate pump if no drain nearby – CHECK The heater is by the wall, so I can just drain it through the wall like my A/C unit
• Additional Noise – CHECK This in the garage so it won’t be a problem

For your convenience, here is a list of hybrid water heaters at Amazon.com.