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Best water heater for efficient small home with low usage?

kurtgranroth | Posted in Energy Efficiency and Durability on

I’m designing a small energy efficient guest home in Phoenix AZ and now I’m trying to find the “best” water heater for it.  “Best” means as energy efficient as possible, but with some limitations and factors due to the house size and usage amounts.

It’s not as obvious as I’d like it to be.

Some more assumptions:
* Ground water temp is 60 F or so
* Only two people in the guest house
* Relatively low hot water usage — maybe 30 gallons per day at the very high end.  Could be half that, most days.

If this was a full size house with a family then I’d choose a hybrid electric in a heartbeat.  But the 50 gallon tank is massive overkill and the space requirements for the heat pump are completely fatal to a small home without notable ducting.

Maybe solar heat, since we are in AZ?  Much too expensive!  Solar water heaters are ungodly expensive and can take up a lot of space, to boot.

Electric tankless?  I love the ultra small size and the fact that it can adjust to actual use instead of estimated use.  But I’d likely need a 13 kW or even an 18 kW unit, which would be pulling on the order of 50 – 70 amps.  I was planning on 50 amps total for the house!  Plus we might be going 100% off the grid with solar in the future and a spike like that could be problematic.  Some back-of-the-envelope calculations assuming $0.13 kWh costs on average suggests maybe $150 a year.

Propane tankless?  Natural gas isn’t an option.  I like it for the same reasons as the electric tankless, but now with no spike in electricity (more PV friendly).  But… now we’re dealing with propane tanks and the wildly fluctuating costs of propane.  My experience with propane is severely limited, too — essentially just the 20lb tanks for the grill.  Is it worth the hassle of dealing with the tanks?  My calculations with the same assumptions as above but with propane running $2.40 / gallon suggest $175 a year — similar to but slightly higher than the electric.

I’m unable to find propane water heaters with 20 gallon or similar tanks, so it’s difficult to include them in the mix.

And so now I’m down to a standard electric water heater with a 20 gallon tank.  Trivial to setup; no electricity spikes; would definitely work.  But I’d never even consider a standard electric heater in a normal case, so it’s weird to be considering it now.  Since this is so small, though, maybe it wouldn’t cost very much to run.  But…I’m also having a very hard time finding any reliable numbers on what it would cost per year to run one in this case.  Online calculators give me numbers ranging from $150/year to $300/year — essentially making those numbers useless.

What do y’all think?  Is there an obvious choice here that I’m just not seeing?  Are some of my assumptions just flat out wrong?  This choice can’t be this hard!

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  1. BrianPontolilo | | #1

    Hi Kurt,

    If you are sure that usage will be relatively low and you are serious about installing a PV system sooner-than-later, an inexpensive electric tank-style water heater may actually be your best bet. In this article from 2012 Martin wrote, "Many American households use a lot of hot water, and our inefficient plumbing systems result in a lot of waste. However, it doesn’t make much sense for families that use average or below-average amounts of hot water to invest in an expensive high-tech water heater. The savings are too small to justify the investment." Though the article is dated, Martin covers most of the options that you are considering. And he wrote something more recently that affirms this option and will offer a few more things to think about. Here are the links:

    From 2012:

    From 2016:

    Let us know what you decide and how it works out.

    1. kurtgranroth | | #8

      Thank you! That was finally the push I needed to get GPA Prime so I'll definitely be binging in the near future.

  2. GBA Editor
    Martin Holladay | | #2

    The solution for an on-grid house won't be the same as it would for an off-grid house.

    If your house is off-grid, you can't possibly have an electric water heater. (Do the math -- especially on battery sizing.) Your options are propane (by far the most common), solar thermal (expensive to purchase), or wood-fired (possible but rare).

    Since you are grid-connected, buy and install a small electric-resistance (tank-style) water heater. If you are serious about going off-grid, everything will change, including many of your appliances. More info here: "How to Design an Off-Grid House."

    1. jackofalltrades777 | | #5


      As an Arizona resident. Most non-Arizonans wouldn't know this but wood-fired appliances are ILLEGAL in Phoenix/Maricopa C0unty due to the pollution laws. Older homes (pre 1998) are grandfathered in but no new wood fired appliances, stoves or fireplaces are allowed within Maricopa County. Only natural gas fired is allowed. During the winter they have NO BURN days which makes it illegal to even have an outdoor fire pit or even pre 1998 homes on that day cannot use their wood burning fireplaces. If they do and are caught, they get fined $250.

      The pollution is so bad in Phoenix during the winter due to inversion. It's horrendous. When I lived there before moving north, I suffered from horrible sinus and respiratory problems in winter due the pollution. Phoenix is one of the top 3 most polluted cities in the USA while up in Northern Arizona, it has the most cleanest air in the entire USA per the American Lung Association. 100 miles north and 4000 feet of elevation make a huge difference in air quality.

    2. kurtgranroth | | #9


      I will certainly read your article on off-grid homes... but I will say that I'm already super concerned about your response since my water heater is always going to be a very small fraction of the electricity usage compared to my AC units. I would expect that I would use more electricity to power my AC units in July alone than I would spend in an entire year on any water heater.

      So... if even an electric water heater couldn't work with PV + batteries, then that strongly suggests that it would be beyond impossible to run multi-ton AC units.

      Are we then saying that it's physically impossible to go off-grid with PV + batteries for any nominal (or bigger) sized home in Phoenix?

      1. BrianPontolilo | | #11


        Just to be clear. Are you sure you mean off-the-grid and not net-zero-energy? When I first read your post I thought you meant net-zero-energy, even though you did write "off the grid." Obviously, there's a big difference and using a PV system to get off-the-grid has implications that trying to achieve grid-tied net-zero-energy does not.

        1. kurtgranroth | | #14


          I combined a short term vision with a long term vision in my question. The short term is a net-zero small home in the form of our guest house. That was what the question was focused on. However, I did have a long term plan of converting the entire property (including the much bigger main house) to be entirely off grid sometime in the future. That's an ethereal plan at this stage and one I mentioned only because I didn't want to back myself into a corner by choosing a completely incompatible solution now.

          But yeah, the goal that really matters now is net-zero, not off-grid.

      2. GBA Editor
        Martin Holladay | | #13

        I'm saying that it would be nuts (and extraordinarily expensive) to try to operate multi-ton AC units with an off-grid system. The battery cost would be in the tens of thousands of dollars.

        Fortunately, you don't have to go off-grid, because you are already grid-connected. Thank your lucky stars that you have grid electricity, because grid electricity is a good thing -- and it's far, far cheaper than the batteries required for an off-grid system.

        ( Very few off-grid homes have air conditioning.)

        1. kurtgranroth | | #15


          Thank you! In the short time I've been on GBA, you have already prompted me to think of a surprising number of things in new ways.

          I'll admit that my long term plan to take my entire property off-grid in the future was at a "just a thought" phase. I would do it entirely myself, so I blindly assumed maybe in the $30k range.

          Well... at your prompting, I did actually track down some solar and battery calculators and when I inputted my actual high and average kWh usage... gak! It could potentially be spiking in the $80k-$100k range!

          So "off-grid" is definitively off the table even as a tenuous future plan unless we were to prove able to _dramatically_ drop our current usage in ways I can't even think of at the moment.

  3. this_page_left_blank | | #3

    Sometimes the obvious solution is just that. The lower the usage, the less the efficiency matters, and the more the initial cost dominates the equation. That spells a straightforward electric, tank heater.

  4. irene3 | | #4

    What about point-of-use electric water heaters? I thought they didn't draw nearly as many amps as the whole-house ones, and you'd save a certain amount of water, which is surely a consideration in Arizona.

    1. kurtgranroth | | #10


      The on-demand electric water heaters I was looking at ARE point-of-use, technically speaking. My thinking what that I'd need 1.5-2.0 gpm just to run a single shower at a time and so that was what I was targeting. The units that can sustain that rate with a base water temperature of 60 F appear to require 13kW to 18kW or 50-70 amps.

  5. Expert Member
    Dana Dorsett | | #6

    A small electric water heater now makes sense.

    If/when you decide to take it off-grid an evacuated tube batch solar water heater would work great in Phoenix's climate. That's cheaper than the amount of PV & battery it takes to keep running the electric tank, but still too expensive to warrant installing one on a guest house that sees only intermittent use. It's the go-to solution in similar climates in Asia, Africa, the Carribean, and Latin America. In parts of China where grid power is unreliable or too expensive it's also an extremely common solution, which an on-grid heater element for backup for days when the grid is working but the solar inputs are low.

    In Phoenix 82% of the days in a year are sunny, so the need for backup is low, and a vacuum tube batch heater might be financially rational as your primary water heat input in the main house too. Ground mounting is an easy option since the structural requirements of the tank of water may exceed that of an existing house, but it also means it can be tucked away out of sight rather than sticking out like a "roof ornament". In India it's common to find them installed on a flat patio-roof (that often serves as living space in that country) mostly obscured from street view by the parapet.

  6. user-2890856 | | #7

    20 gallon Propane , modulating water heater .

    1. Expert Member
      Dana Dorsett | | #12


      But at USD $1.5K- $2K it's several times the cost of a purty-good Chinese 150 liter (40 gallon) batch water heater on Alibaba.

      If you're the kind of person who would install a gazing ball in your yard, the Mexican Solesyto batch heater might be preferable to an evacuated tube batch water heater:

      In Phoenix if the lines to/from a batch heater are buried even 12" the risk of freeze up is zero.

  7. tommay | | #16

    Do you see freezing temperatures? If not a small propane tankless in conjunction with solar hot water may be best. Here's a spot where you can get some ideas for cheap do it yourself SHW for outside showers and/or connection to the tankless which you can put in series or parallel. A simple switch can turn the tankless off and on when needed. If freezing occurs, it's easy enough to drain the solar and use the tankless seasonally.

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