Water Heater Replacement – Explore Your Options

Date Published: May 4, 2016

It has happened to the best of us. The fateful day where you finally have to change out that old dinosaur of a water heater living in your basement – hopefully because you knew it was nearing the end rather than waking up to a basement full of water. Whatever the cause, water heater replacement isn’t ever a fun thing to do. However, there are a few different options that must be considered before you make a major investment in your home. Here are a few things to consider:

To Tank Or Not To Tank (Do I need a tankless water heater?)

Often times, people go with the cheapest option for a water heater replacement, but there is a ton of advantages to purchasing a new tankless water heater system instead. Tankless units come in both gas and electric models and can be a direct replacement for a conventional tank unit.  Most tankless units mount on a wall and are roughly the size of a medium suitcase.  When a faucet or fixture is turned on and hot water is needed, the tankless unit immediately turns on, consuming only the amount of energy relative to the amount of hot water demanded at the faucet or fixture.  Sometimes these units are referred to as instant or on-demand water heaters. Although the hot water does heat instantly within the unit, it still has to travel through the piping to reach the faucet – so it can still take time to get hot water, similar to your old tank unit.  But without the tank you are not heating water in your unit all day long; you only heat water when it is needed or called for.  Also the efficiency of a gas tankless unit is typically considerably higher than a standard gas tank unit, saving costs.  The up-front costs are higher, but the long term savings from reduced operating costs can far outweigh the added installation and purchase costs.

Conventional water heater replacement vs tankless system

How much does a water heater cost?

Tankless vs traditional vs high efficiency: Certainly the cheapest up-front cost is to install a standard mid-efficiency tank water heater, likely similar to what you have in your home now.  In doing so, you miss an opportunity to balance your up-front cost with the lifetime operating costs.  A standard mid-efficiency tank unit may cost you less to install, but by taking the time to research your options and weigh the overall cost of ownership, you may find that upgrading to a high-efficiency tank unit, or a tankless unit, or even a solar hot water system might be right for you.  We recommend that you take the time to explore these options with your local plumbing expert, and that you consider the overall cost of ownership when making a water heater replacement decision.

What is involved with water heater installation?

In reality, a water heater is one of the simplest appliances in your home.  You have cold water in, hot water out and a power source.  If you have an electric unit, there is usually a 220V connection to your unit.  If it’s a gas unit you have a natural gas or propane pipe connecting to the gas valve built into the unit.  Replacement involves shutting off the water supply, disconnecting the power connection, draining excess water and off you go.  If you are upgrading to a tankless or high-efficiency unit, there may be additional considerations related to venting, proper gas line sizing, etc. where the services of a professional are absolutely needed.  Overflow drain pans are recommended on all tank units with new and replacement installations.  Do your homework on what type of system you want to install, and be prepared to ask questions of your plumbing professional so you can make an informed decision.

Solar Hot Water Heater Panels

Water Heater Replacement with a Solar Hot Water System

Advances in solar technology and storage systems make it a great time to consider installing a solar hot water system.  The systems from the ’70s have come a long way in many respects. However the concept remains the same – pull some energy from that big orange thing in the sky and convert into heat for your hot water system.  Most solar hot water systems consist of a number of solar panels mounted outside; piping and a pump system to circulate a water or glycol mixture through the panel; and a special storage tank inside the home that collects the circulated liquid, which heats water in that tank.  Typically another conventional water heater is present for cloudy days, but the majority of the heating is done by the sun.  We have even seen tankless units acting as the backup source, but the incoming water is pre-heated by the solar system, and the tankless unit only does the small amount of work to raise the temps up to your desired level, if needed.  Give this option some consideration when replacing your water heater.

What is the best water heater system for you?

Each home and each homeowner has unique needs.  There is no silver bullet.  And while the type of water heating system you own isn’t the sexiest decision you will make as a homeowner, you do have an opportunity when considering water heater replacement to make an informed, educated decision. Explore all options and consider the long-term cost of ownership in your decision.  There are many really good options that can have long-term impacts on your monthly operating costs and performance of the system.

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About the Author: Chris Scott

Chris Scott is an ASHI certified home inspector with multiple years of experience in home inspections, blower door testing, duct leakage testing, and Boulder Rental License Inspections. Chris is also the Website Coordinator for Scott Home Inspection.

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  1. RealEstateBrokers@juno.com'
    V May 4, 2016 at 11:08 pm

    We would have liked if your article had some price/cost ranges for each possibility. Maybe assume a typical 2000sf 3br/2ba home of 3.
    StdHWH $500-800; install $300-400
    HiEffHWH $850-1000; install ??
    Tankless ??; install ??
    Solar ?? Install??

    • George Scott May 12, 2016 at 4:58 pm

      We are reluctant to quote costs since this blog post can be read across the country, and pricing and installation costs vary greatly. Our goal was to highlight options to consider when replacing a water heater, versus just installing a standard tank unit and missing your opportunity to consider other options. We recommend consulting with local plumbers to get quotes for the options proposed.

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