A good hot water heater is a must in today’s homes. A good unit is also a major component of both energy and water consumption, so it’s important to choose the most energy-efficient model you can afford. So how much does a new hot water heater cost?
Much of this is determined by the heater’s efficiency. Though the Energy Star rating has not yet been applied to water heaters, you can check the Energy Guide to determine the efficiency – which is usually indicated by a sticker on the tank itself. The Energy Guide provides the estimated annual energy consumption and cost of operation for each model. Depending on your needs and your budget, you could spend anywhere from $175 for a 2.5 gallon capacity electric water heater to $6000 on a solar-powered water heating system.
It’s important to consider your old water heater’s performance when purchasing a newer model. If you had little or no problem maintaining enough hot water for your household, a similar size will work for you. On the other hand, if you had difficulty generating enough hot water to meet your needs -- and you know it wasn’t a malfunction of the old heater -- you should probably upgrade to a larger capacity water heater. You should also consider how your water heater is vented. If it’s vented though a chimney, the old chimney must be inspected and brought up to current fuel codes. You may want to consider a power-vented or sealed-combustion water heater, since these types do not require a chimney to vent exhaust gases.
For those who live alone or for couples whose children have left the nest, an instantaneous or “on demand” fuel-fired water heater can be quite efficient and provide ample hot water for the household. Many come with an “Energy Factor” of .8 or higher, which may qualify for a federal tax credit up to $300. This type of heater is expensive, and few models are suitable for use in homes – in spite of the energy savings.
When evaluating the cost of your water heating selections, bear in mind there are two types of costs you evaluate: purchase costs and operating costs. Life-cycle costs take both factors into consideration. When looking at hot water heaters from this perspective, understand that the least expensive heaters (conventional electric storage models) initially cost less, but they wind up costing significantly more to operate over a 10-13 year period than other types (such as solar powered water heaters). An electric heat pump can be costly in the beginning, but it tends to cost much less to operate and is more efficient. The most expensive water heaters – which are the solar powered systems -- are the least expensive to operate over time. They actually pay for themselves in energy savings over a 10-13 year span.
You can expect to pay at least $300-500 for a high-quality hot water heater from most home improvement or hardware stores. For similar performance and capacity in storage-type heaters, prices are about the same for natural gas and electric. Many stores offer low-end heaters for as little as $275. With the other end of the price spectrum at approximately $6000 or more for a solar system, the low cost of conventional water heaters can be enticing. Just remember that when it comes to purchasing new hot water heaters, you tend to get what you pay for.