You may have heard that the federal efficiency standards for water heaters increased in April 2015. Perhaps you have also noticed the propane industry using this change as an opportunity to encourage homeowners to trade out their electric water heaters with propane models. The truth is, electric water heaters remain a convenient, efficient and cost-effective choice. Here’s what you should know:
Propane claims the new standards will make it more difficult to replace your existing electric water heater.
What may not be clear is the efficiency standard applies to ALL water heaters, not just electric models. Electric water heaters smaller than 55 gallons are now required to meet an energy factor (EF) of .95 rather than the previous standard of .91. That means electric water heaters of this size must be 95% efficient. For propane and natural gas models of the same size, the EF increased from .58 to .60. Most residential water heaters on the REC system are between 40 to 50 gallons. Manufacturers are easily meeting these standards on water heaters in this size range so most members should have no trouble upgrading when the time comes. In fact, REC has recommended water heaters with an EF of .95 for many years.
For water heaters larger than 55 gallons, the standards have increased in both electric and propane water heaters as well. The EF for electric water heaters of this size has increased to 2.0 (requiring models to be 200% efficient) while propane water heaters require an EF of .75. To accomplish the required EF in these larger models, manufacturers are using more advanced technology.
Electric water heaters at this capacity have transitioned to heat pump or hybrid water heaters, while propane and natural gas water heaters larger than 55 gallons need to be draft induced models.
While REC members with 60 – 80 gallon electric water heaters will be affected by the new federal standards if their existing water heaters require a replacement, they do have options. They can install a highly efficient heat pump water heater (for which incentives may be available) or downsize their tank to one of 50 gallons with an EF of .95.
Propane claims to be more efficient.
The standards for electric water heaters allow for 5% of the electricity used to heat the water to be wasted, while the standards for gas models allow for up to 40% of propane used to go up the chimney as waste heat.
The efficiency of all water heaters can be increased by insulating about 5 feet of hot and cold water lines on top of the tank. Further, efficiency of an electric tank sitting on a concrete floor can be improved by placing a 2’ x 2’ x 2” sheet of blu-board foam insulation beneath the tank to reduce conductive heat loss. A propane tank may not be insulated in this fashion because of where the burner is located and the potential fire hazard.
Propane Claims to be more cost effective.
A new 50 gallon, 95% efficient electric tank can be purchased for around $535. A 50 gallon 60% efficient propane tank will cost around $585 plus an additional $200 – $300 worth of parts and labor to hook-up the propane line and vent it through the roof.
While the larger 55+ gallon electric heat pump or hybrid models start at $200 more than the smaller models, an equivalent propane draft-induced water heater can cost twice as much as its smaller counterpart (and still requires the additional parts and ductwork).
According to the yellow EnergyGuide label, the most efficient 50 gallon electric water heater will use 4,624 kilowatt-hours of electricity per year. At the current REC rate of 6.42 cents per kWh, that equates to $264 a year or about $22 a month. At $1.98 a gallon a .60 EF propane water heater will cost about $488.93 a year or about $40.74 a month. Plus, propane rates tend to be far more volatile than electricity, often rising in the winter when usage is highest.
Propane tanks also require a constant supply of outside air for combustion. In the winter months that adds up to an energy penalty as cold air enters the home and the heating system kicks on to warm that air. It costs probably $10 to $20 per winter to heat that outside air. Electric tanks require no outside air.
Electric water heaters have other advantages as well. An electric tank can be placed in a closet, basement or crawl space – just about anywhere it will fit. Propane tanks allow less design freedom because they must be vented up through the roof or out through the exterior walls. Not to mention, electric water heaters pose no risk of combustion or emitting dangerous carbon monoxide fumes, which account for nearly 500 deaths in the United States each year.
If you have questions or need help selecting an electric water heater please contact our Member Services department.