What contractors need to know about new water heater changes
Unless you have had your head in the sand, you know that, in one month’s time, the water heaters we have known and loved will disappear from the U.S. market. With the new National Appliance Energy Conservation Act efficiency requirements kicking in on April 16, 2015, the change-out of a water heater will become much more complex. Plus, a new water heater may not fit into the space of the old water heater.
The U.S. Department of Energy claims that, with the increased energy savings, there will be a payback on the new water heaters. Apparently, the federal government is unaware that plumbing contractors need to make a profit. I have looked at the increased price of installation used to justify a possible payback. Depending on which DOE report you read, the increased cost of installation ranges from $70 to $158 for a 40-gal. water heater. It estimates the energy savings for a 40-gal. gas-fired water heater is $26 per year and that a water heater will last 13 years.
At press time, definitive pricing on many of the new water heaters is unknown. I spoke to a few sales representatives and even they didn’t know all the prices yet. So how can anybody realistically do a payback analysis? One manufacturers representative informed me that the new water heaters will average $150 more in cost to the contractor. There goes the government’s payback analysis. That would mean the increased labor cost would only be $8. Again, the government doesn’t know how contractors price an installation.
Simply stated, there is no payback for the new water heaters. Don’t kid yourself. The water heaters will cost more, the installation will cost more, and we don’t use a lot of energy to heat water. That might be an anti-green statement, but it is the truth.
I’m as green as the next person, maybe even greener. But I hate having the DOE put out phony numbers to justify a savings in energy. We are beyond paybacks for water heaters. As one of my friends said, “We are now spending dollars to save pennies.”
First of all, we don’t spend a lot of money on energy costs for water heaters. Let me put it into perspective. If you turn off your air conditioner in a hot climate for one month, you saved the equivalent energy needed to heat the water for a period of about two years in a typical home. In other words, the large energy users in a home are heating and air conditioning, not heating potable water.
As you have figured out, air conditioning is the highest of the energy uses in a home. So, if you have to spend an additional $500 to $800 on a more efficient water heater, the end result is that it costs more to install and use. There are no savings.
Will a newer water heater installation cost $500 to $800 more? That depends on how you price the installation of the new water heaters. What we do know is they will cost more. When you add efficiency, the manufacturers have to charge more. As to how much more, we’ll soon find out. In the next few years, prices will probably stabilize. At first, expect to see fluctuation in prices between competitors.
The different quirks
Your cost and time to install the newer water heaters will increase. Some water heaters that never had an electrical connection (virtually every gas-fired, residential tank-type water heater) may now require such a connection for the spark ignition system. This would be for the larger water heaters. I’ve heard some manufacturers may try to do the ignition with batteries. We’ll just have to see what hits the market.
Some of the new dampers for gas-fired water heaters may require an electrical connection. Again, we’ll have to see what is required for the new water heaters.
The size of the water heater will be larger, which will play havoc with existing water heaters that are squeezed into a closet or under a counter. I foresee apartment complexes going crazy if they installed the 20–gal. water heater under the counter for one-bedroom, one-bath units. Many of these units exist throughout the United States.
If you need a larger space yet no space is available with the existing water heater, it is going to cost more. Either you will have to relocate the water heater or you might have to switch styles, such as installing a tankless water heater. You already know that tankless water heaters cost more to install than tank-type water heaters.
The space requirements also translate to more space needed in your shop to store water heaters. In addition to more space, the newer water heaters will be heavier. It is anticipated that a water heater will require two people during installation, as opposed to possibly one person.
Some water heaters will require a drain for the condensate. That will cost money to install. For some basement installations, it may require a condensate pump if no drain is available in the floor. Some of the water heaters will require plastic vents. Now you have to figure out where to run the vent in an existing home.
For gas-fired water heaters, the question of venting also may add more cost to a replacement water heater. A standard chimney or Type B vent may not be adequate for venting a high-efficiency water heater.
One additional factor to consider is noise. Current water heaters are basically quiet. OK, you can hear the burner kick on for gas-fired water heaters. Newer water heaters may have a blower or fan operating. Hence, noise will be associated with the newer versions.
For new installations, it isn’t a big a deal. The home can be planned around the new water heaters. However, it is estimated that 80% of the residential water heaters installed each year are replacement water heaters. So, for the next 10 years, there will be some havoc with replacement water heaters.
If you plan on hoarding old-style, tank-type water heaters, you better have started a long time ago. Supply houses are running out.
My one big piece of advice with the new high-efficiency water heaters is: Read the installation instructions. All the manufacturers are emphasizing the importance of becoming educated on the new installation requirements. Just be sure to follow what they say in the installation instructions.
It should be an interesting time with replacement water heaters over the next few years.