In Hot Water…and Loving It

 

As a general rule, the last words that someone in the process of renovating, retrofitting, or building a home wants to hear are "you're heading into hot water" -- especially from a lender, appraiser, or inspector. But every once in a while these words can bring a smile to a homeowner’s face and result in dollars saved: now, at tax time, and over the lifespan of the project.
 

There's never been a better time to consider upgrading, replacing, or choosing a new water heater, and for those who do so within specified time periods, the financial incentives have never been better.
 

Upfront: Although water heaters can account for a whopping 14 to 25 percent of the average household's consumed energy, they aren't terribly sexy to think about, talk about, or show off to friends at the next neighborhood barbeque. For folks building new homes, water heaters are often one of the last things considered in the building plans – and then only with regard to their possible role in radiant heating or their proximity to the laundry room or some other place that unattractive appliances get stashed away.
 

Furthermore, for most homeowners, the thought of renovating a home often revolves around the cosmetic -- either for their own aesthetic pleasure or because they're thinking about putting the home on the market. Bamboo flooring, new skylights, and granite kitchen countertops tend to score far higher on the "sexy" list than a machine used to keep people, clothes, and dishes clean.
  

For a new breed of homebuyers -- and their lenders -- this may be an old way of thinking. In the past, it wouldn't have been uncommon for a smarter-than-average homebuyer to ask about the capacity or age of a water heater, while a home inspector might have checked it for leaks. However, today's buyer is more interested in energy efficiency, sustainability, and cost savings. 
 

Luckily, there are savings to be found for everyone: homeowner, home buyer, home renovator, and home builder. A water heater chosen carefully and responsibly may qualify for rebates and tax credits offered by the manufacturer, the utility company, and state and federal government programs. Because some of these credits expire this fall or at the end of the year, read on ... quickly!
 

Traditional tank water heaters consist of a glass-and-steel tank sized to hold between 40 and 80 gallons of water. The water enters cold and is heated by natural gas, propane, or electricity. The water is kept at a set temperature using these energy sources and, unless the heater is connected to a timer, energy is used on a constant basis, 24/7, to maintain that temperature.  
 

Although very similar in appearance and physical size to their predecessors, most of the electric-, gas-, propane-, and oil-heated water heaters manufactured today are more energy efficient than those manufactured even a few years ago. 
 

Probably the most recognizable of the energy-efficient water heaters are those bearing the Energy Star name and logo. Created by the U.S. Department of Energy and the Environmental Protection Agency, the Energy Star brand, guidelines, and program hold manufacturers and their products to minimum levels of efficiency to qualify for certification. This system gives consumers an easily identifiable measurement to help with purchase decisions.
 

The Energy Star designation -- now an international standard and logo -- can be found on many appliances other than water heaters. Think washers, dryers, computers, refrigerators, air conditioners, and so on. However, for water heaters, it represents a major step up in efficiency. While the estimates vary by both calculation method and product model, a minimum savings is between 20 and 30 percent, and some units can produce energy savings of more than 40 percent over non-energy-efficient models. That means bottom-line cash savings every month to a homeowner. Here in New Mexico, there are a variety of discounts available at time of purchase in the form of utility company rebates, including a rebate from PNM, and federal rebates and tax credits. While some of these savings can be combined, others cannot. Also, some discounts apply not only to the appliance cost, but to reasonable installation costs.
 

Often small enough to mount on a wall or be stowed underneath a sink cabinet, a tankless water heater is pretty much just that: a heating appliance that doesn't store large amounts of water and therefore has no tank, per se. Working on a principle not unlike that of an electric tea pot or immersable heating element used for making hot water, a tankless water heater -- sometimes referred to as an "on-demand water heater" -- heats water only when a homeowner actually turns on the hot water tap or turns a washer's temperature dial to "hot." Water flowing in from the normal water source – a well or water system -- enters the chamber of the tankless system cold, but, thanks to a highly effective heating element, reaches the user hot moments later. Energy savings, often calculated at between 25 and 35 percent depending on hot-water usage within a household, occurs due to the fact that hot water is not created in large quantities and then stored until use.
 

With a price ranging from $800 to $1500, a tankless water heater is a substantial upfront investment, often averaging 30 to 50 percent more at purchase than a traditional "tank style" water heater. However, due to its energy efficiency, a homeowner can often realize an equal amount of savings on the utility bill within two to three years. Plus, the price of tankless water heaters has declined in recent years due to increasing popularity and manufacturing advances. Simultaneously, the rebates and tax credits have never been higher than they are now.
 

Solar water heating, while universally considered the most planet-friendly system and the cheapest in terms of actual heating costs, is a classic example of the chicken-and-egg principle when it comes to evaluating cost effectiveness: it costs far more at the purchase and installation phase, but this expense is recouped over its years of use.
 

The two primary features of solar water heating are water storage tanks and solar collection plates. From there, one can choose between an active circulating pump and a passive system. There are also choices in solar collection method: flat-plate, ICS or batch system, or evacuated tube. There is also a choice of direct versus indirect circulation. 
 

Many books, online sites, and videos offer more substantial information on the features of each choice, as well as the differences amongst them. However, some choices are far more suitable to Santa Fe's snowy winters and the strong potential of unheated water left in a collector to freeze. Indirect circulation systems address cold winter issues.
 

Like the other water heater styles mentioned, solar-water-heating systems are eligible for significant rebates and tax credits at the state and federal level. Furthermore, some lenders -- including Santa Fe's own Permaculture Credit Union -- offer preferred interest rates on the most energy-efficient energy systems, including solar-water-heating systems, incorporated into renovation or new construction projects. 
 

Because of some rapidly expiring rebates and tax credits, most of the mentioned savings have focused on dollars-and-cents economic benefits. Of perhaps equal or greater value is another benefit: common sense sustainability, which allows our local community and our planet to survive in a thrifty, healthy, viable manner. Reduced energy usage -- whether in electricity, propane, or natural gas -- means a healthier outcome in every possible way, and that does make your water heater awfully close to being sexy.