I can’t drive 55

Sept. 5, 2014
I’m not opposed to heat pump water heaters Current models have installation limitations What to do when faced with the choice between installing a heat pump water heater or installing two smaller electric tanks? Selling heat pump water heaters will effort to present customers with solid financial reasons  

Neither can Sammy Hagar, but he wasn’t talking about water heaters. Replacing an 80-gallon residential electric water heater yesterday prompted me to reread the Contractor Magazine article “New Efficiency Standards for Residential Water Heaters are on the Horizon”, http://bit.ly/VFqSH3, by Candace Roulo. The 55-gallon line-in-the-sand for increasing the EF (Energy Factor) ratings in 2015 (EF = 2.057) would have required we replace that 80-gallon electric model with a heat pump water heater.

I’m not opposed to heat pump water heaters, but current models have installation limitations that would have rendered yesterday’s job impossible. The home is buried back into a hillside and its cave-like mechanical room lacked both the necessary cubic volume of free-air (generally 800-cubic feet, or more) and access for ducting to the outdoors would have required digging. The good news is, according to several manufacturers, models currently relying solely on the mechanical room’s cubic volume of air will have the ability to be ducted.

Who picked that number 55! Bruce Carnevale, Executive Vice President of Sales and Marketing for Bradford White Corporation, graciously shared several hours with me more than a year ago. During the visit, we discussed the pending regulation changes. Bruce asked me what I thought plumbers would do when faced with the choice between installing a heat pump water heater or installing two smaller electric tanks to avoid the added cost for their customers.

I answered his question with a question: When will Bradford White bring a heat pump water heater to market? Less than a year later, I had my answer: Please see the PDF at http://www.bradfordwhite.com/sites/default/files/pdf/MakeSwitch_AeroTherm.pdf.

In answer to the first question, my response was: If there is room for a second tank, or the space is too small for cubic air volume, or the customer is offered the choice while only being given the up-front costs, in goes a second electric 50-gallon model!

A successful end run around the DOE 2015 regulations, but is it wise?

If we install a second tank, we need another 220-volt 30-amp breaker and copper wiring between the breaker panel and second electric water heater with a disconnect switch in many cases. Either series or reverse-return water piping will need to be added with isolation valves and a bypass line. The bypass line will allow uninterrupted use of DHW for the eventuality of one breaking down or its failure while waiting for service or replacement. 

Rounding off numbers, let’s check on the up-front costs and include a 4.5-gallon thermal expansion tank:

80-gallon electric tank-style water heater installed for $2,400.

  • Water heater $1,200
  • $200 miscellaneous parts
  • $1,000 for labor 

Twinned 50-gallon electric models installed for $2,900.  

  • Electrical work $350
  • Two 50-gallon water heaters $1,050.
  • $350 miscellaneous parts with added piping/valves
  • $1,200 labor

An 80-gallon heat pump model installed for $3,650.  

  • Heat pump water heater $2,788.
  • $200 miscellaneous parts.
  • $1,000 labor
  • Subtract the $300 rebate.

The up-front cost reduction (after the new DOE regulations) of $750 for twinned tanks certainly looks attractive. If your sales presentation stops here, you’ll be installing the twinned electric water heaters. Is that really the best move for our customers? Is there a way to present this in a favorable light to help customers clearly see which option is the best option?

An 80-gallon tank indicates we either have a large family or high-DHW-demand fixture like a whirlpool tub. Municipal cold-water delivery-temperatures average 40°F to 80°F over the course of the year. This is true for all areas of the country because the bury-depth varies based upon geographic weather conditions. If the average daily draw of DHW equals 100-gallons and electricity costs 13 cents per kWh in 2015, the cost for comparing annual usage is as follows for municipal water:

  • Twinned electric 50-gallon tanks with an EF of .97 = $763.36
  • 80-gallon heat pump tank with an EF of 2.4 = $289.44

Whoa there Nelly! A first-year reduction in operating cost of $473.92 is impossible to ignore. Keep in mind too that electricity has historically increased in cost by 3.5% every year.  The added investment of $750 yields a first-year ROI of 63.2%. ECV value over a 15-year cycle with a 3.5% increase in annual cost for electricity reveals your customer will have avoided paying the utility company $9,144.61.

Selling heat pump water heaters will take a bit of effort on your part to present customers with solid financial reasons that truly are in their own best interest. Given the choice of keeping their hard earned $9,144.61 or giving it to the power company is an easy choice. While I rarely bring up the word “payback” when discussing long-term ECV, this is a personal rule-breaker with its less-than-two-year payback! Fail to illustrate the value and you’ll be stuck driving 55.

All Dave Yates material in print and on Contractor's Website is protected by Copyright 2014. Any reuse of this material (print or electronic) must first have the expressed written permission of Dave Yates and Contractor magazine. Please contact via email at: [email protected].         

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