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Community and Q&A

Electric vs. Propane Direct Vent Water Heater

user-322250 | Posted in Mechanicals on

Hi All,

My water heater is nearing the end of its lifespan and I am trying to decide the best option for replacement. My main criteria is lowest energy cost. Secondary criteria are installation cost and overall efficiency/greenhouse gas emissions.

Right now, I am limiting my search to storage units (no on-demand).

The unit I have right now is a direct vent propane heater. I pay about $4/gallon for propane (well over 4X the wholesale price ! Don’t get me started about the unjust economics of residential propane). My electric rate is about $0.20/kWH.

I am assuming that if I go with gas again, it will need to be direct vent (sealed combustion/horizontal exit flue with external air intake).

I have run the numbers based on ~60% percent efficiency for the direct vent unit and it looks like costs are pretty comparable but I am not sure I am accurately modeling all the variables. In particular, I suspect my standby losses are unusually high.

Three specific questions:

1. Is 60% efficiency a reasonable estimate for a direct vent water heater ? Are there different direct vent technologies that might be more efficient than what I have right now (passive direct vent with no forced ventilation) ?
2. My water usage is quite low which makes standby losses a bigger issue. It seems like the electric would be a winner in terms of standby losses because it does not have a pilot light and can be insulated better than a system with a flue (I would probably invest in an external insulating jacket).
3. I have binned out heat pump units because the water heater would be located in a small first floor utility closet. There is no way that a HPWH would benefit me during the heating season, although I could probably get some energy benefit in the summer. Also, I worry about noise because it is only separated from living space by a closet door. Am I thinking the right way here ?

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  1. STEPHEN SHEEHY | | #1

    I ruled out a heat pump wh because of the noise. One benefit to electric is you can seal the old vent from the gas heater.

  2. Dana1 | | #2

    A condensing 95% efficeincy direct vent propane water heater would deliver over 85% efficiency for a moderate-volume user, over 90% for a high volume user, but still over 70% for a single person taking one 6 minute shower every day (within 10%). A 60% estimate would be on the very low side, but would be on the exremely high side for a low-volume user if it's a non-condensing burner.

    Water heaters with sanding pilot lights burning 24/7 don't meet current US standards, and aren't generally available in the US..

    A heat pump water heater can't live in a closet anyway- it needs to communicate with a large volume of air.

    A standard electric tank has VERY low standby losses compared to even the best condensing propane water heaters, and is probably your best bet.

    The levelised 20 year cost of rooftop solar is cheaper than your retail electric rate. If net metering at retail is allowed for solar in your area an electric tank + rooftop solar is a worthwhile investment.

  3. Jon_R | | #3

    Here is a device that allows direct connection of solar panels to an electric water heater. The concepts appear sound but I have no experience with it.

    ebay: Solar-Water-Heater-EZ-Kit-Save-No-Pipe-Changes-Hot-Water-System-PV-MPPT

  4. wisjim | | #4

    We replaced an electric water heater with a direct vent unit over 10 years ago. The LP (propane) direct vent unit doesn't have a pilot light, but has electronic ignition so we control it with a simple 110 volt plug in timer. It comes on at 4 am and off at 8 am and we have plenty of hot water for morning showers and baths and still have hot water at the end of the day for washing dishes or another shower. We pay anywhere from $1.50 to over $4 a gallon for LP, depending on the year and also the time of year. I'm thinking of replacing the LP unit with an electric when the time comes that we need a new water heater, and may run it directly off of some PV panels since I have some that aren't installed yet. We have a surplus of electrical energy most of the year, even after getting a Leaf electric car and installing 2 Fujitsu mini splits in our 120+ year old farmhouse.

  5. user-2890856 | | #5

    Either of these should make you very happy . The first link product cost is about 1,700.00 and the second is just over 2,000.00 .

    Both of these would be top of the heap within the category Dana D mentioned

  6. user-322250 | | #6

    Thanks. This is exactly the info I was looking for.

    Based on Dana's estimates, a condensing unit might (might) be a tiny bit cheaper for me to to operate vs an electric unit but not by much. If I understand correctly, there is a substantial cost premium for a condensing unit vs a non-condensing unit.

    An electric tank is looking like my best option.

  7. user-2890856 | | #7

    If electric tank type is your decision you might as well get the best in class there also .

    I do not understand what math may have convinced you that the electric would only be a bit worse though .

    Can you not get wholesale propane in your location or is your storage device not large enough to qualify as such ?

  8. jkstew | | #8

    Regarding the insulating blanket for the electric heater; my city utility company promoted these to their users and when people installed them there were high numbers of prematurely failing heating elements. Many folks went through a number of heating elements before they discovered that the blanket was the cause of the failures.

  9. user-322250 | | #9


    Dana estimated something slightly over 70% effective efficiency for a condensing propane unit with low usage/high standby losses. I am assuming at least 85% efficiency for an electric unit. With $0.2/kWh and 4$ a gallon propane, I calculate about $0.06 per useful kBTU for the propane and about $0.07 per useful kBTU for the electric.

    The last time I bought propane it was actually closer to $5/gallon than 4. I agree this is outrageous. I have already jumped thru hoops to try to get this lower but anyone who has not experienced the residential propane market in new england would have trouble believing. I actually had someone threaten to "report me to the authorities" because I was calling around asking for quotes on replacing my rental tank with one that I would own. Companies in my area will routinely refuse to quote rates until they have established weather you are currently a customer (rate is lower if you are not currently a customer). With a substantial upfront investment and alot of inconvenience, I could probably lower what I pay but the hassle is just not worth it.


    This is surprising. Any idea what the failure mechanism was for electric heaters with a blanket installed ?

  10. Dana1 | | #10

    In many areas propane is a micro-monopoly: The propane company owns the tank, and is the only one allowed to fill it, and it comes with a cost-prohibitive "removal fee", if you want to change vendors.

    I'm aware of a situation where a homeowner replaced his propane fired HVAC with a ground sourced heat pump, and replaced the kitchen appliances with induction burners, etc to make it all-electric. The propane vendor first accused him of having someone else filling the tank, in contravention of the contract. He pointed out that he had converted everything to electric, and that the contractor was free to take the tank, along with the remaindered fuel. The propane guy insisted on collecting the $2000 removal fee, the homeowner refused, and 3 years later the tank was still there.

  11. user-2890856 | | #11

    Stand by losses in an electric or NG / LP with similar / same insulation will be similar or same .

    The products I linked to that are gas would have a combustion efficiency no lower than 87% , That would be when bringing a tank back up to storage setpoint . At all other times that combustion efficiency would be greater than 90% due to cold entering water , more condensing happening .

    The thermal efficiency of those gas units is 96% so standby loss is almost non existent or at a minimum , the same as the Everlast electric unit .

    Dana , Pretty remarkable , the mindset of some vendors of things isn't it? Leave a tank somewhere for years not earning because you are greedy and are trying to collect the fee that was made high to keep you on site . He will never win in court either , at least not to the tune of 2,000.00 to take something away . In New Jersey I would have had the right to have it removed with no penalty within 3 months of me telling him to remove it . If he did not remove it within that time I could do whatever I wanted with it , including sell it ti this fine gentleman here . Maybe a law like that exists in Mass or wherever your friend is located . Given the fact that the tank also contains potentially dangerous hazardous material I would bet your friend has good legal standing .

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