Compare propane or LPG & natural gas hot water heaters
Save Money ... Use Propane & natural gas for hot water heaters ...
How much can I save by converting from propane storage heater to tankless hot water natural gas heater. Answer is a great deal as you will see below
The two gases used in different types of hot water heaters (tankless water heaters and storage heater types) are propane also called LPG and natural gas. Propane normally costs more than natural gas for domestic whole house water heating purposes
The cost of the energy source for hot water heaters is also critical bearing in mind that electricity generally is most expensive but in this section we will consider gas fired hot water heaters only.
1. Energy factor ... there are significant differences in terms of energy factors between gas tankless (also called instant or on demand hot water heaters) and gas storage heaters. Some gas hot water heaters are able to burn either natural gas or propane but generally they are designed to run one or the other gaseous fuel.
The energy factor is important and is used to calculate the amount of energy wasted. Cost of gas used as $ per Therm (1 Therm is = 100,000 BTU) obviously is very important. Average US cost per Therm in Wisconsin in February 2004 was as follows (ref Jim O'Neale energy analyst contact tel (608) 266-8971 ....
Natural gas $0.922 per Therm (100,000 BTU)
Propane or LPG $1.366 per Therm
Heating Oil (for comparison) $0.972 per Therm
Be aware that these prices change monthly.
The range and average Energy Factors for Propane and Natural Gas hot water tankless heaters are
| Maximum Energy factor | 0.85 |
| Minimum Energy factor | 0.64 |
| Average Energy factor | 0.75 |
Now just consider the following (very important) ....
Person number 1 buys the most efficient Natural Gas tankless hot water heater and person number 2 buys the least efficient Propane gas hot water tankless heater and they both use 65 gallons per day of hot water (152 Therms of gas at 100% efficiency)
Person 1 actually has to buy 152/0.85 = 178.8 Therms of Natural gas per year and spends $164.87 per year to heat hot water
and Person 2 actually has to buy 152/0.64 = 237.5 Therms of Propane gas per year and spends $324.42 per year to heat hot water
Person 1 saves $159.55 per year on hot water heating bill by making the correct purchasing decision. Put another way it can be generally stated (and certainly in Wisconsin) that buying a low efficiency tankless hot water heater using propane will cost you twice as much as using a high efficiency Natural gas hot water tankless water heater.
Now lets do a similar exercise to discover what could be saved by going from a low efficiency storage hot water heater using Propane in Wisconsin to a high efficiency tankless hot water heater using Natural Gas in Wisconsin .... Use the values in the table below and again assume 65 gallons of hot water per day from both types of hot water heater
Annual propane cost to heat hot water in storage heater would be $451 (energy factor 0.46 meaning 330 Therms of propane gas required for heating water at $1.366 per Therm of propane gas)
Annual Natural Gas cost for tankless hot water heater would be $164.87 (see above calculation)
Conclusion .... by converting from propane gas hot water storage heater to natural gas tankless hot water heater annual saving in Wisconsin would be about $286 per year. This is a very significant saving
This table below shows Energy factor difference between best and worst units for different types of tankless and storage tank hot water heaters. This table clearly shows that tankless hot water heaters are certainly more efficient than storage hot water heaters ... but do not forget that this is only one factor that will determine your final choice
| Type | Energy Factor Parameter | Energy Factor |
| Storage Propane Gas heater | MAX value | 0.65 |
| Storage Propane Gas heater | MIN value | 0.46 |
| Storage Propane Gas heater | AVG value | 0.56 |
| Storage Natural gas heater | MAX value | 0.65 |
| Storage Natural gas heater | MIN value | 0.46 |
| Storage Natural gas heater | AVG all values | 0.56 |
| Storage Dual gas heater | MAX value | 0.63 |
| Storage Dual gas heater | MIN value | 0.48 |
| Storage Dual gas heater | AVG value | 0.57 |
| Tankless Hot Water Heaters ... gas | MAX value | 0.85 |
| Tankless Hot Water Heaters ... gas | MIN value | 0.64 |
| Tankless Hot Water Heaters ... gas | AVG all values | 0.75 |