Compare cost electric tankless water heater to propane storage heater
Natal gas is cheaper than propane & electricity ... How much can I save by converting from propane storage heater to electric tankless hot water heater? Example below
We have shown that a great deal of money can be saved by converting from a hot water storage heater using propane gas to a tankless hot water heater using Natural gas ... but what about converting to an electric tankless heater for your whole house hot water needs.
The cost of the energy source for hot water heaters is critical bearing in mind that electricity generally is most expensive per unit of energy. But cost of energy unit is not the whole story and you will see that considerable savings can be achieved by converting from Propane storage heaters to electricity tankless hot water heaters
Energy factor ... there are significant differences in terms of energy factors between electric tankless (also called instant, instantaneous or on demand hot water heaters) and propane 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
Electricity cost in Wisconsin is $0.0861 per kWhr
Be aware that these prices change monthly.
The range and average Energy Factors for Propane and Natural Gas hot water storage heaters are
| Maximum Energy factor | 0.65 |
| Minimum Energy factor | 0.46 |
| Average Energy factor | 0.56 |
Now just consider the following (very important) ....
Person number 1 buys the least efficient Propane Gas storage hot water heater and person number 2 buys the most efficient electric hot water tankless heater and they both use 65 gallons per day of hot water (152 Therms of gas at 100% efficiency or in kWhr terms this would be 152 x 29.3 = 4,453 kWhr per year)
Person 1 actually has to buy 152/0.46 = 330 Therms of Propane gas per year at $1.366 per Therm and spends $451 per year to heat hot water
and Person 2 actually has to buy 4453/.99 = 4,498 kWhr of electricity per year at 0.0861 per kWhr and spends $387 per year to heat hot water
Person 2 saves $64 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 storage water heater using propane will cost you 15% more than using a high efficiency electric hot water tankless water heater.
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