Water Heating in All-Electric Homes

April 30, 2016
May/June 2016
A version of this article appears in the May/June 2016 issue of Home Energy Magazine.
Click here to read more articles about Hot Water

When I started working in the home energy field (in the mid-1990s), I never imagined I’d be suggesting that all-electric homes could be among the most efficient, sustainable, and practical choices in cold climates. In some warmer parts of the country—for example, in Florida, where cooling loads dominate and gas infrastructure is limited—all-electric homes have always been common. But in colder parts of the country, electric-resistance heat was to be avoided at all costs. The air source heat pumps (ASHPs) of the 1990s offered no solutions; they switched to resistance heat at mild temperatures (often in the 30–40°F range). In the north, ASHPs got a horrible reputation as systems that negligent landlords installed when they didn’t care about tenants’ utility bills.

Things have changed. Two of the biggest changes:

  1. ASHPs have improved tremendously. Systems are available now that operate (in heat pump mode) below 0°F at efficiencies much greater than what electric resistance can offer.
  2. The building industry’s knowledge of envelope systems, improved construction practices, and rigorous energy codes have dramatically reduced the heating loads in new homes.

The 1-ton heat pump provides all heating and cooling for this Passive House in western Connecticut. (Credit: SWA)

Heat traps can reduce thermosiphoning energy loss from tank water heaters. (Credit: SWA)


Each of 20 homes in this community has a solar DHW system. (Credit: SWA)

Monitored Water Heating Energy in One Homes

Monitored Water Heating Energy in One Homes
Figure 1. Solar water heating systems were a major part of the design of homes in a community in Greenfield, Massachusetts.

Olive Street Development converted an abandoned school building into 12 efficient apartments. Evacuated-tube solar collectors totaling 372 square feet act as awnings over the southern windows. (Credit: SWA)

DHW Monitoring Results

DHW Monitoring Results
Figure 2. DHW monitoring results for the first year in the 12-unit building.

The managers of this apartment building tried to keep the closet warmer with a resistance space heater, but it was a losing battle. A HPWH simply doesn’t make sense here. (Credit: SWA)

HPWHs can work well in basements, where there is a large volume of air from which to draw heat. They do not work well in closets. (Credit: SWA)

There are more and more examples of Passive Houses or zero energy homes where loads are reduced to minuscule levels. The Connecticut Passive House uses a single, ductless heat pump for all mechanical heating and cooling.

But the all-electric trend is crossing over into more-mainstream home construction as well. Even in colder climates, homes that meet Energy Star requirements or even the 2012 or 2015 International Energy Conservation Code (IECC) often have design heating loads of 20,000 Btu per hour or lower (many furnace capacities start at 60,000 Btu per hour). The operating cost of natural-gas heating is typically lower than the operating cost of electric heating, but not by a huge margin. We’ve seen situations where heating a new home with a good ASHP may cost $500 per year and heating with gas may cost $350 per year. Gas still costs less (by $150 per year), but as homes get more efficient, this margin shrinks.

Operating cost is not the only factor for many people; first costs are often much lower where a single system (ASHP) provides all heating and cooling for a home. There may also be plumbing and infrastructure savings without gas, and monthly gas utility fees are often $8–20 a month; these fees alone can negate annual operating savings. Some homeowners want to avoid on-site fossil fuels, and some choose to offset on-site electricity consumption with on-site PV to achieve net zero energy consumption.

Regardless of the reasons, more builders and developers are considering all-electric buildings. But there’s another big thermal load in homes. What do you do about water heating?

Hot Water Use

Before talking about how to heat water, it’s useful to take a look at how much water we need to heat. Reducing consumption, of course, is the most direct way of reducing energy use. The good news is that domestic hot-water (DHW) consumption has been dropping—thanks to more-efficient appliances, low-flow fixtures, and perhaps more-conscious home occupants. Steven Winter Associates (SWA) has seen this trend in our studies and evaluation projects. In 2001, when we performed an evaluation for a New England utility, we found average DHW consumption of 60–70 gallons a day in single-family homes. In a similar study ten years later, we found average DHW consumption of 40–50 gallons a day. In extremely efficient new homes (such as zero energy homes or Passive Houses), we typically see DHW consumption of 30–40 gallons a day. These are small examples (each of our three studies monitored between one and two dozen homes), but there are similar trends nationwide. For instance, the DOE method for testing and rating the efficiency of water heaters is changing. The older test procedure called for a hot-water draw of 64 gallons per day. In the new procedure, most 40- and 50-gallon electric tanks will be tested at 55 gallons per day. DOE’s Residential Energy Consumption Survey (RECS) also shows a 17% drop in water-heating energy per household from 1993 to 2009. Some of this is certainly due to more-efficient water heaters, but the trend is in the right direction.

Before choosing a water-heating system, be mindful of water consumption. Low-flow showerheads, faucet aerators, and efficient appliances can dramatically reduce hot-water use and energy use.

Electric Resistance

Electric-resistance tanks have been the default electric water-heating system, and they’ll be around for a while yet. Heating elements convert electricity to heat at 100% efficiency. Hot water systems are less than 100% efficient because of standby and distribution losses, but these can be minimized by

  • selecting very well-insulated tanks and/or applying additional insulation outside tanks;
  • keeping DHW pipe runs short (in new homes);
  • installing good pipe insulation (in all homes);
  • installing heat traps to reduce thermosiphoning; and
  • using demand-controlled recirculation (if recirculation is necessary).

Tankless resistance water heaters eliminate standby losses, require much less space, and have prices similar to those of really well-insulated electric tanks. The sole reason they are not used more often is their current draw. A tankless resistance heater needs a much-larger heating element (maybe 10 times larger) than a storage tank water heater to heat water as it is used. The following equation can be used to assess the electric-current needs of a tankless water heater. Using 240 volts to heat water from 65°F to 125°F (a rise of 60°F) at a rate of 4 gallons per minute requires nearly 150 amps.

These high current draws can lead to larger (and more costly) electric services. Point-of-use water heaters require less current and reduce distribution losses, but multiple units are usually required in a home, and these can still lead to larger service requirements.

If high current draw is not a deal breaker, look for water heaters with precise temperature delivery and modulation, both of which are typically achieved with TRIAC controls. These controls can result in less energy use and very consistent water temperatures.

Solar Water Heating

Solar water-heating systems were a major part of home design in a community in Greenfield, Massachusetts. The developer, Rural Development, Incorporated, installed a solar system on each of 20 homes, and we were able to monitor one system in some detail. After several initial operational problems were worked out, the systems provided most of the water-heating energy—80% in the home we monitored (see Figure 1). We also monitored the gas use and efficiency of the auxiliary tankless water heater. Annual gas costs for water heating were only $36; the solar system offset $134 per year (at $1.40 per therm). The $36 per year was great, but without substantial financial incentives, the cost of the solar DHW system ($9,600) was difficult to justify with an annual savings of $134.

Substantial financial incentives are available in many areas, which can reduce the up-front cost of solar water-heating systems by 50% or more; but high up-front cost is certainly a barrier to wider adoption. In cold climates where indirect solar systems are necessary for freeze protection, installed costs are often near $10,000. In climates that remain above freezing all year, direct water heaters (such as thermosiphon and integral collector storage systems) can cost less than $5,000. In most of North America, however, indirect systems are necessary. The cost picture looks better when solar offsets more-expensive water-heating methods (such as electric resistance), and many utility, state, and federal incentives can bring the price down dramatically. But in single-family homes, indirect solar DHW can be a costly way to heat water.

In multifamily buildings, however, the cost picture is a bit different. Because of the better scale, one study found that multifamily solar DWH systems cost 28% less than single-family systems (based on average cost per collector area). SWA was able to monitor performance of a small multifamily solar system, also located in Greenfield, Massachusetts (see Figure 2). This system cost about $31,000 ($83 per square foot of collector compared to $110 per square foot for the nearby single-family systems). The federal tax credit, state incentive, and utility incentives offset most of the installed cost, and the system saved $630 a year in natural-gas costs. In the developer’s next project, the plan is to forego fossil fuels entirely and rely on solar thermal with electric resistance or heat pumps for backup.

Heat Pump Water Heaters

Most of heat pump water heaters (HPWHs) we’re seeing in homes are packaged, tank systems. Typically, the heat pump components (compressor, evaporator, fan, and so on) are mounted above a hot-water storage tank. As HPWHs have been discussed in two previous Home Energy articles (see “Navigating the New Market,” HE July/Aug ’12, p. 38, and “What’s New in Water Heating?” HE Sept/Oct ’12, p. 48), we won’t go into much detail here on how they operate, but heat is removed from the surrounding air and moved into the water in the storage tank. Our studies have shown that the average HPWH uses about half as much electricity as a resistance water heater.

According to the Energy Information Administration, the average home with an electric water heater uses 2,675 kWh per year for water heating. At the average U.S. residential electric rate of $0.127/kWh, a HPWH could reduce annual water-heating costs from $341 to about $170. Costs for HPWHs certainly vary, but we’ve seen premiums of $700–2,500 (over conventional resistance water heaters). As with solar, there are often utility or government incentives that can lower the costs.

learn more

To learn about DOE’s methods for testing and rating the efficiency of water heaters: (older version) and (newer version).

Read DOE’s Residential Energy Consumption Surveys from 1993 to 2009.

See a map of freeze risks for integrated collector storage solar systems.

See monitored performance of a small multifamily solar system located in Greenfield, Massachusetts.

For more information on types of solar water-heating systems, see Chapter 3, “Solar-Thermal Water Heating,” in High-Performance Home Technologies: Solar Thermal & Photovoltaic Systems. Vol. 6 in the Building America Best Practices Series. Prepared by Pacific Northwest National Laboratory & Oak Ridge National Laboratory for DOE, June 4, 2007.

See the Solar Rating and Certification Corporation’s performance requirements.

Because they can cut water-heating costs in half, HPWHs make sense in a lot of single-family homes. But there are a few caveats to be aware of before installing a HPWH.

Cooling effect. Because the heat pump moves energy from the surrounding air to the water, the HPWH cools (and sometimes dehumidifies) the surrounding space. During warm weather, this can be an added benefit. During heating season, it can consume a bit more space-heating energy. The cool air can also make the area around the HPWH feel chilly, so bear this in mind when deciding where to locate the unit.

Space and volume. HPWHs need a rather large volume of air from which to draw heat (several installation manuals recommend at least 1,000 cubic feet). It is usually unwise to install a HPWH in a closet, because it will cool the closet air so much that the heat pump won’t be able to operate effectively.

Noise. Most HPWHs aren’t terribly loud, but they’re certainly much louder than a resistance water heater. Bear this in mind before you locate a HPWH near bedrooms or other occupied spaces.

<Size matters. Most HPWHs have electric-resistance elements that turn on when the heat pump can’t keep up with the load. To maximize efficiency, use of these resistance elements should be minimized. One simple way to do this is to install larger tanks and keep them hotter. This is counterintuitive to most equipment-sizing guidelines, but an 80-gallon tank kept at 140°F can provide about twice as much hot water as a 50-gallon tank kept at 120°F before resistance is needed. To prevent scalding, it is good practice to temper valves when keeping tanks very hot.

As the cost of PV systems has plummeted over the past several years, some people are finding that installing an extra 1–1.5 kW of PV to power a HPWH is more practical and less expensive than investing in and using a solar water heating system. This certainly depends on local rates and incentives, and the HPWH caveats above still apply, but it can sometimes be a good approach.

What’s Next?

All of these nonfossil systems have pros and cons:

  • Electric resistance has very low first costs, but high operating costs (though operating costs can be reduced through water conservation measures).
  • Solar-thermal systems can offset most water-heating energy, but they often have high first costs and sometimes high maintenance costs.
  • Operating costs of HPWHs are often half as much as those for electric resistance, but first costs are higher and there are limitations on where HPWHs can be used.

There may be no “perfect” system for all applications, but there are some new heat pump products coming that may address the limitations of packaged, tank-type HPWHs. Several manufacturers may soon introduce split HPWHs in North America. In split systems, heat is drawn from the outdoor air and moved to a tank located indoors. There may also be outdoor HPWHs available soon that use CO2 as a refrigerant. These will probably be more expensive, but they promise higher efficiencies and could solve many of the problems posed by tank HPWHs as described in this article. Stay tuned.

Robb Aldrich has been with Steven Winter Associates in Connecticut since 2000. At SWA he has specialized in home energy systems: researching new technologies, monitoring performance of systems, and working with builders and developers across the country to create better, healthier, more efficient buildings. Before joining SWA, Robb received a master’s degree from the Building Systems Program at the University of Colorado and worked for several years designing, commissioning, and repairing solar electric and solar thermal systems.

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