Cost/Payback of Tankless Gas vs. Heat Pump Electric

Discussion in 'Tankless Water Heater Forum' started by DIY_Steve, Feb 19, 2014.

  1. DIY_Steve

    DIY_Steve New Member

    Messages:
    18
    Location:
    Portland, OR
    Hi Everyone, thanks in advance for your help.
    I'm remodeling my laundry room and have decided to replace my electric water heater as part of the project. I'm deciding between gas tankless and a heat pump electric. I have two quotes for each in hand. Here are the details:
    Navien NPE-210A $3,350 installed
    Airgenerate ATI-66 $1,900 installed
    Above pricing is after all rebates, tax credits, etc.
    Using this site http://energy.gov/energysaver/artic...cy-storage-demand-and-heat-pump-water-heaters
    I calculated my expected annual operating costs (Portland, Oregon) as follows:
    Gas: $158
    Electric: $221
    Thats a 21.5 year payback on the extra cost for the gas.
    What do you all think, are these numbers legit? I would prefer the gas option due to unlimited hot water, lower footprint, etc. Also have a little fear of the heat pump since they are new technology. But was hoping for a much better cost comparison between the two...gas option sure is pricey...
    Appreciate your input!
    Steve
  2. Dana

    Dana In the trades

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    Location:
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    Assuming you did the math right on your retail gas & electricity rates the ATI-66 is located in a garage or something you'll probably better off with the ATI-66.

    If it's located inside of conditioned space and not taking it's heat from outdoor air, half the heat is coming from your heating system, and in Portand's 8-9 month heating season that's an additional cost that doesn't show up on the power use of the water heater.

    AirGenerate is a small TX startup (manufacturing is in China) but has been around for more than 5 years, and has sold tens of thousands of their retrofit heat pump units that hang on the top of standard electric ho water heaters. The ATI-xx units are among the highest efficiency heat pump water heaters in the industry, but on a 2012 in-situ field monitoring study for the NEEA on early revision ATI-66 there was more than a 10 % early failure rate (3 out of 28 units.) The warranty is good, and the stainless steel construction should give it a 20+ year lifecycle, but pay attention to it's behavior in the first year or so. If it starts running 24+ hour heating cycles on a regular basis it may need to be checked out.

    Navien is a Korean company (Kyung Dong Boiler) that has been around for decades. Their north American support is a bit spotty, and their quality control isn't quite up to the levels of the big Japanese vendors, so if you're going that route be sure this isn't the contractor's first tankless installation, and hopefully they've taken the distributor/factory training from at least SOME tankless HW heater vendor. Installed by competent installers most will do just fine, but in the event that there are any issues with it you want the installer somebody who isn't a clueless newbie on the job.
  3. DIY_Steve

    DIY_Steve New Member

    Messages:
    18
    Location:
    Portland, OR
    Yes the heat pump water heater would be located in the garage, so no hidden costs from scavenging the furnace heat. One provider said it would be best to vent the cold air out the back of the garage, whereas the other said it would be better to put it into the attic, which would help cool the house during summer. Who is "right"?
  4. Reach4

    Reach4 Well-Known Member

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    Location:
    IL
    Interesting. How about a damper to let you bring the cool air into the living space when desired?
  5. Dana

    Dana In the trades

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    Assuming you have insulation in the attic and the brevity of the cooling season in Portland there's zero advantage to venting the AirTap to the attic. Injecting the cool air into the attic would increase the heating load a tiny bit for 8-9 months of the year, and lower the cooling load at tiny bit 3-4 months of the year, but the effects of either would be quite small even if you had only R19 for attic insulation. But in a heating dominated climate that's a tiny net-negative, not a net-positive.

    Any time you're exhausting or injecting air it's depressurizing or pressurizing the space, which can affect air-inflitration rates. Most garages are leaky enough that very little of the air would be sucked from the living space and add to the heat load there, but it's worth checking for air leaks at the partition wall to the conditioned space, including the plumbing & electrical penetrations and the weatherstripping on the door. That NEEA study did some measurements of the infiltration drives imposed by the water heater under different configurations, but didn't fully assess the impact on home heating/cooling energy from that air.

    Most of the units in the study were likely from first-year production, which may partially explain the failure rate.

    Other factors to consider, assuming a 20 year lifecycle for either unit: Natural gas pricing built in to your recent gas rates is running near historical lows, but it's likely that as more gas-fired power generation comes on line and as the export market gets built up that is likely to change. Electricity prices in the PNW have been flat or falling for decades in inflation-adjusted dollars, despite population growth. As federal efficiency mandates continue to be implemented as well as the now fairly substantial wind & solar development in the region, that's likely to continue to be the case over the next 20 years, even if more people start driving plug-in cars. The perceived 21.5 year payback of the difference using 2014 utility rates could easily stretch to 30, given these trends. (Could b rong, offen am...)

    Also, the Navien will likely need some maintenance every 3-5 years (if not sooner), so you need to take a WAG at what it will cost to replace the flame sensor in 10 years, cleaning or changing the filter (assuming you don't DIY that one.) At Portland's municipal water hardness levels it's unlikely you'd ever have to descale the thing, but if you're outside of town and on a private well it could be another cost to factor into the 20 year cost of ownership.

    By comparison, heat pumps are pretty dumb & reliable things- most refrigerators & freezers last several decades with zero maintenance. So as long as it was charged correctly initially and the loop is hermetically sealed, it should just keep chugging away. If the electric resistance elements see a lot of cycles you may have to replace one in 10-12 years, but if you operate it in heat-pump only mode that won't be an issue.
  6. jacobsond

    jacobsond DIY Junior Member

    Messages:
    59
    Location:
    ND
    Have you considered the cost difference between just a regular water heater vs the heat pump also? 20yr payback on anything is just plain silly. If you even get to the payback its going to be time to buy another.
  7. DIY_Steve

    DIY_Steve New Member

    Messages:
    18
    Location:
    Portland, OR
    Good question, I decided to focus on "green" options that will complement my pex home-run/manifolded system, since there are so many incentives on the heat pump models out here right now its hard to ignore...
  8. Obama care from the government is another great thing that they are touting too.....

    a 20 year payback is not gonna happen for you......
    the heaters made today are lucky to get 10 years out of most of them

    if you just install a normal heater with
    a blanket on it, you will probably do much better over a long haul......
  9. Runs with bison

    Runs with bison Member

    Messages:
    892
    Location:
    Midwest
    Doubtful. Anyone with any sense knows that an insurance industry based system isn't going to work and will be the most expensive around. Single payer would be several times more efficient (wiping out whole layers of middlemen and bureaucracy--but that's not what conservatives want.) That's why we have the most expensive and least cost effective healthcare system in the world. Nearly every other industrialized nation has a better system.

    FYI, Obamacare was originally a conservative plan, it is what the insurance industry wanted. That said various stipulations attached to it it did reform some of the worst aspects of the insurance industry.
  10. DIY_Steve

    DIY_Steve New Member

    Messages:
    18
    Location:
    Portland, OR
    LOL I'm surprised to see that my thread has become political. I'm just going to avoid talking healthcare on a DIY plumbing forum...

    So we are still working through this decision. Basically feeling like we want the tankless for the benefits of small footprint and the peace of mind of knowing we can't run out of hot water. Just wishing it wasn't so much more expensive. Does anyone have any experience to say that a tankless water heater is better for house resale values? Any other input on this decision?

    Thanks!
  11. Dana

    Dana In the trades

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    Location:
    01609
    Don't count on getting anything out of either option on resale value, unless you're selling to a green-flavored character straight out of a "Portlandia" episode or something. :)

    The heat pump solution won't have the cold-water sandwich and low-flow temperature fluctuation/flame-out quirks or the maximum flow rate limitations that you'd get with the tankless.


    If your hot water performance anxieties are about cold showers, you can substantially extend the the showering time you get out of an Ati-66 with $600 drainwater heat exchanger, which is often a DIY-able installation. (A 4" x 48" returns more than 50% of the heat going down the drain to the incoming cold water stream, at fully tested 2.5gpm flow, and even higher return rates at lower flows.) In heat-pump-only mode it won't put the Ati-66 into endless shower territory, but back-to-back 10 minute showers won't be a problem. At heat pump water heater efficiencies and Portland's power rates it would take on the order of 10 years to "pay back", but since it's at least a grand cheaper than the installed cost delta between the Navien and the Ati-66, it could arguably "up front savings", if it gives you the showering performance you want for less money up front. You probably still get a small kick back from the state on them too, but most likely only if it's installed by a pro.

    [​IMG]

    If it's slab-on-grade you'd need the shower to be on the second floor, since you need about 5-7 feet of vertical drain section downstream of the shower to install one big enough worth putting in there. The lengths of the runs to the water heater hardly matter, but shorter is easier, so it may mean installing the Ati-66 in the basement near the main drain or something for total ease of installation rather than in a garage.

    Of course it doesn't raise your home-resale values or lower your health care premiums either, but that's a lot to ask of a dumb heat exchanger, eh? ;-)

    It raises the SCRAP value of your home though, since it's a goodly chunk of copper! LOL
  12. Oh my god>> i agree with dana





    I totally agree with you on this ...
    it will raise the scrap value of the home if he goes tankless.
    with that copper coil on the stack..
    you are working way too hard and spending too much just
    to recoup so little.....

    why not just install a wood burning stove in the basement if
    you wish to really save some energy......


    anybody sign up for Obama care yet??
  13. Dana

    Dana In the trades

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    Location:
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    Installing a wood stove in the basement runs afoul of building code requirements that the combustion air/make-up air inlet come from an elevation no higher than the fire box of the stove, which in many instances will be impossible.

    And even when it's possible to install it in a code-compliant manner it's not saving energy, only changing energy sources, and not necessarily even saving MONEY. Cord wood in my neighborhood runs about $12/MMBTU, and burned at 75% efficiency in a wood stove is more expensive than my recent-months $1.20/therm natural gas burned in and 80% efficiency boiler.

    For a typical family the energy returns on a ~50% efficiency drainwater heat exchanger is on the order of 5-8 MMBTU/year. Assuming an installed cost of ~$1000 that a fairly long financial payback in 50 cent/ccf gas areas, but a fairly short payback at $4/gallon 85% heating oil or propane, or 20 cent electricity. But where there's a pay back of reduced performance requirements on the rest of hot water heating mechanicals (as is potentially the case here) the "payback" is immediate.
  14. houptee

    houptee Member

    Messages:
    182
    Location:
    Monmouth County, NJ
    Did you look into Takagi tankless water heaters?
    The price is much more reasonable than the brands you were quoted.
    Google Takagi and you will see they are sold along with Navien and Rinnai.
    Compare btu and flow rates side by side for each brand.
    Don't forget the venting costs if the unit requires stainless steel venting the adapter elbows wall thimble and outside vent hood can cost another $200 depending how long the vent is.
    When the units use PVC venting the cost of the unit is much higher so it may be more cost effective to use the models that require stainless venting if you can go directly out the sidewall hence the minimum amount of venting parts needed.
    Last edited by a moderator: Mar 6, 2014
  15. DIY_Steve

    DIY_Steve New Member

    Messages:
    18
    Location:
    Portland, OR
    The heat exchanger is a pretty neat concept, I think it could work here but I'm just not that ambitious on this project. I decided to forego the heat pump water heaters as part of this decision because it was hard to find a contractor that had much if any experience with them, I don't mind being cutting edge but bleeding edge is another story. Just IMHO.

    So using the same calculator I can just keep my 80 gallon electric heater going at $633 per year operating, plus about $100 to relocate it (DIY). Thats a 6-7 year payback vs. the instant gas. Or I could buy a new efficient electric 50 gallon and DIY install it for $550, with annual operating cost of $534, for 7-8 year payback. Since we expect to be here for another 10-20 years plus the footprint and quantity advantages the tankless is now making sense. Any other thoughts here?

    As for Portlandia, yes its exactly like that show here 100%. And please contact me if you want to invest in bridges or swampland, I am an agent for some really good properties...

    As for Obamacare, I have good friend, full on republican his whole life, outspoken type, gets cancer. Couldn't get healthcare because of job loss and preexisting condition. Now has healthcare, outlook is positive. Ask him about it, doesn't have much to say. Hmmm...
  16. Dana

    Dana In the trades

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    Location:
    01609
    There is more cost to tankless HW heaters than just the fuel use, but if you're a pretty-good DIYer and stay ahead of it it's not terrible. In a place with the low water-hardness of Portland you can probably get something like 20-25 years out of the heat exchanger, but expect to clean the filters and flush the thing every year or so, and expect to replace the flame sensor &/or flow sensor by age 10.

    It's been decades since I've called Portland home (though I visited last summer), but the Portlandia has some funny send-ups of some of local/regional stereotypes. Portland has one of the nicest collection of bridges of any US city IMHO- can I really buy stock in them? :)
  17. DIY_Steve

    DIY_Steve New Member

    Messages:
    18
    Location:
    Portland, OR
    I don't mind a little annual maintenance. What is the approximate cost of these flame sensors and flow sensors?

    Yes Portland is a good laugh sometimes although to this Portander the ratio of good skits seems a bit low. Best ever is the Battlestar Galactica skit IMHO.
  18. Dana

    Dana In the trades

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    You'd have to ask the manufacturer or distributor for replacement-part costs, but it's small money compared to just the labor cost of a factory certified tech to install them.

    I'm not a big enough fan of Portlandia to watch it regularly, but sometimes friends will ping me with an episode that caught their fancy. It's pretty droll stuff, to be sure.
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