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Water Heating > Costs & Considerations
  Safety Concerns
  Average Costs
  Installation & Service
  Purchase Options
Once you have decided on the optimal water heating product for your home, the final step is the purchase and installation of the unit. However, prices can vary significantly. We provide some average numbers by way of context. In addition, we explore several other important considerations, including water heater safety and maintenance. Finally, we provide a comparison of different purchase options to help you maximize quality and minimize costs.
Safety Concerns
Anytime you deal with a tank of nearly boiling hot water, safety must be a paramount concern. Some of you may recall that in the earlier part of the 20th century, hot water tanks were dangerous and known to explode as a result of the potential for buildup of excess heat and pressure inside the tanks. The early solution to this problem was pressure relief valves which would open when the internal pressure reached a certain threshold.

However, this did not fully address the issue, which was not simply excessive pressure, but also excessive temperature. The typical water tank would explode at temperatures above 212 degrees Fahrenheit unless there was an immediate action to reduce the temperature. Moreover, many pressure valves did not release the pressure rapidly enough, meaning that water would overheat at a faster rate than the relief valve could reduce the pressure.

The problems associated with an overheated tank were several. The most immediate issue was the possibility that the tank would explode, causing property damage, injury, and even death. Even if the tank does not explode, the expanded super-heated water would back up into the cold water line and potentially damage the water meters. It could also exit the faucets as scalding steam, which would result in burns to the user. Finally, such hot water would weaken the various components of the water heater, reducing its effectiveness and longevity.

In the middle of the 20th century, manufacturers of water heaters began to install new valves which controlled both the temperature and the pressure of a water heater and which were correspondingly called temperature and pressure relief (T&P or TPR) valves. A discharge pipe would be connected to such a T&P valve and directed either outside of the home or into a nearby drain. This would allow the water heater to dump water if either the temperature or the pressure rises to unsafe levels.

In addition to a T&P valve to regulate the inside of a storage tank, it is recommended that a tank be elevated and secured to an adjacent wall in order to minimize the risk of floor spillage and tipping in the event of an accident, whether it be a natural disaster such as an earthquake or a man-made mishap, such as inadvertently hitting the tank with the car or a heavy piece of furniture during a move.

With respect to the temperature of the water inside a storage tank, there are two conflicting issues when it comes to safety. On the one hand, water that is too hot can lead to scalding. On the other hand, water that is not hot enough can give rise to bacterial cultures, such as Legionella, which can contaminate the water supply. In order to balance both safety concerns, the water temperature for a storage tank is generally set to 130 degrees Fahrenheit, which is just hot enough to destroy any bacteria, but not so hot as to lead to a significant risk of scalding in the course of regular water usage.

In those cases where the water is not regularly kept at 130 degrees Fahrenheit, such as certain solar powered water heaters, there is another way to keep any potential infestations of Legionella bacteria in check. As it turns out, it is sufficient to simply raise the temperature of the water inside the storage tank to 130 degrees Fahrenheit for 30 minutes once a day in order to control for bacterial buildup.
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Average Costs
The purchase and installation of a water heater represents a significant expense, which is not surprising given the vitally important role that this major appliance plays within the home. However, while some water heating systems can be quite expensive, purchasing a basic water heater does not require breaking the bank. A number of excellent storage tank and tankless units are available at reasonable prices from leading manufacturers.

Storage tank water heaters are the easiest to find and also the least expensive. Generally, an electric powered storage tank water heater will cost between $200 and $1,000, depending on capacity, brand, and energy efficiency. A gas powered storage tank water heater will be slightly more expensive, running between $300 and $1,200.

Tankless heaters are somewhat more expensive, but the difference is not significant. A typical electrical tankless water heater will run somewhere in the range of $400 to $1,500. Of course, this price does not include the cost of installation.

A heat pump water heater system will cost more, in the neighborhood of $1,000 to $3,000. The most expensive is a solar powered water heater, which will run between $1,200 and $5,000. However, both system types can significantly reduce monthly utility expenses, thereby reducing their effective cost over time.

Typically, the price of a water heater is inversely proportional to its capacity and energy efficiency. As a consequence, selecting a cheaper model may save money today, but result in greater costs over the lifespan of the appliance. Lower energy efficiency means higher utility costs, which can add up since water heating is not seasonal, but necessary year round. Many consumers prefer to pay more upfront in return for lower monthly expenses and a smaller environmental footprint. In addition, models which have an ENERGY STAR rating can qualify for additional savings in the form of government tax rebates.

In terms of installation costs, these will vary by area and by contractor. A general range is $250 to $500 for storage tank water heater installation, $500 to $1,500 for tankless water heater installation, and $500 to $1,000 for heat pump water heating system installation. However, if extensive customization is required with respect to water pipes, air vents, gas lines, or electrical circuits, this can further increase costs from these baseline levels. From this perspective, one benefit of solar powered water heaters is that installation is often included in the purchase price.

A water heater should provide a minimum of 10 years of repair-free operation. Most brand name models are designed to operate without any issues for 15 to 20 years, or even longer. Units generally come with standard warranties and little to no upkeep is required. For storage tank heaters, it is recommended that consumers drain and flush the tank once each year. For tankless water heaters, it is similarly advised that consumers flush it once annually by utilizing an inexpensive flush kit.
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Installation & Service
Installing a water heater is a fairly complex process that has to be done with absolute precision in order to ensure proper operation. Given the importance of the water heater as a home appliance and the monetary investment associated with a water heater, it is highly recommended that consumers utilize a professional to perform the installation.

A number of consumers like the do-it-yourself approach to home appliances and prefer to do the installation on their own. Some like this approach because it saves money, while others actually enjoy the work. While a number of consumers may indeed possess the necessary know-how to perform the installation, it is still unlikely that they will perform as good a job as a certified professional who has received the requisite training and for whom the installation and servicing of water heaters is a full-time occupation. It bears reiterating that improper installation of a water heater can result in serious damage to both people and property.

The general sequence of events for a water heater installation begins with the removal of the old water heater. The power to the old unit must be shut off, which typically involves either cutting the circuit for an electric water heater or turning off the gas main for a gas water heater. Then, the water main has to be shut off and the water from the old heater must be drained. In case of a gas heater, the vent pipe has to be unplugged and the gas line capped. Finally, the old water heater has to be disconnected from the water pipes, taken out, and properly disposed in accordance with local regulations.

The new heater has to be transported to the location where it will be installed with care, particularly as the unit can be quite heavy. For gas water heaters, the gas lines must be connected with great care, as gas leaks can lead to damage to property, injury, and even death. The water pipes have to be connected properly as well, ensuring that the hot and cold water pipes are connected to the proper valves on the heater unit.
In case of a solar water heater, or a heat pump system, the installation can be even more complex. Once again, using a service professional is almost always the appropriate course of action. Even in cases where a water heater is simply being replaced with the same type of unit, most consumers should contract a service professional to perform the installation.

Of course, not all service professionals are created equal. There is a broad range of issues that a smart consumer has to consider before awarding the contract. To start, a consumer should identify all the contractors in the area who deal with water heating systems. There are several sources which may be used. In the past, consumers would turn to the local yellow pages. This still works, but now there are additional online resources which provide incremental information. Referral services such as “Quality Smith”, “Service Magic”, and “Mi Needs” pair consumers with pre-screened local service providers free of charge. Sites such as “Angie’s List” allow consumers to not only find local contractors, but also to see how other consumers have rated their services. In addition, certain hardware store chains provide their own installers and service contractors. Sears is a prime example.

Most contractors will offer free estimates on prospective jobs. Consumers would do well to receive quotes from at least four different contractors before making a final decision. Not only will this allow the consumer to find a competitive price and reduce his or her expense, but it will also provide a basis for comparing different contractors as far as consumer relations, expertise, and professionalism. A quality service contractor will understand all aspects of water heater operation, installation, and maintenance, including the auxiliary components associated with piping and insulation. In addition, a quality contractor will provide warranties on parts and guarantees on work performed.

It is important to also ask about the provision of emergency services in case of an unexpected breakdown or system failure. A good contractor will make available manuals and reference materials for the consumer’s personal use. Most importantly, it is necessary to ask for a complete breakdown of costs associated with the project. Some contractors will not include certain additional costs, such as the need to hire an electrician or to purchase parts. It is critical to have all of this information upfront, as this will avoid the cost of the project ballooning unexpectedly down the line.
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Purchase Options
Most consumers purchase their water heating systems through a service contractor specializing in plumbing or heating who also handles the installation. The advantage of service contractors is that they have extensive expertise in the field of water heating and can provide a lot of useful information. In addition, many consumers appreciate the idea of a one-stop shop that takes care of both delivering and installing the system.

However, many service contractors are loyal to a limited number of brands. In some cases, service providers are authorized dealers for only a single brand. Consequently, a service provider may pressure customers to buy a particular brand or type of product rather than offering truly objective information. For this reason, it is vitally important for consumers to do their own homework and develop an idea of the type of water heating system and brand name that they would prefer before they begin to have detailed conversations with local service providers.

Pricing also varies widely among different service providers, not only in terms of the labor and parts for installation, but also in terms of the sticker price for the water heating system itself. Once again, getting at least four quotes should be mandatory. Given the relatively high costs of water heating systems and their corresponding installation, this is not all that different from buying a car. A consumer would typically want to visit multiple car dealerships before making a purchase. Similarly, a consumer should evaluate multiple service providers before making a final decision.

Aside from service contractors, most of the large hardware store chains carry water heaters, including Sears, Home Depot, Lowe’s, Orchard Supply Hardware, and Menard’s. However, the sales personnel may not necessarily be knowledgeable about the specific products, so it is best to go in prepared and know the type and brand of water heater that is desired.

The benefit of buying at a physical store is the ability to see the product up close prior to purchase. Often, the installation is easier to arrange and the guarantees are better. In addition, returns are typically easier in case there is something wrong. On the other hand, the selection is more limited and the prices are often higher.  
In recent years, it has become possible for consumers to directly purchase water heaters online from distributors and authorized resellers. However, there has to be a lot of research done before this avenue can be safely pursued. You should know exactly what type of system you want and need, whether it will require auxiliary components, and what types of guarantees the distributor is offering. Generally, you should not make any purchases without first finding a trustworthy local contractor and receiving an opinion regarding whether the system is appropriate for the residence, what the installation process will entail, how much it will cost, and whether there may be more cost-effective alternatives.

You should also be wary of deals that sound much too good to be true. If an online seller is offering a particular water heater brand model for $500, but it costs $1,000 or more everywhere else, further investigation is necessary before making a purchase commitment. The seller may be trying to substitute a non-brand product for the brand name, or selling a different product than advertised altogether.

A high quality local service provider should be willing to work with and accommodate, to the extent possible, your preferences as far as type, brand, and model of water heating system. As part of the due diligence process, you should ask to see examples of prior work or, barring that, at the very least a list of recent customers who would be willing to give the service contractor a reference.

On the whole, the extra several hours of due diligence on your part can lead to 10, 15, or even 20 years of worry-free, high efficiency water heating for the home coupled with thousands of dollars in potential savings with respect to lower utility bills and minimized repairs. Water heating is definitely one area in which putting in a bit of work as a consumer can yield significant long-term dividends for the entire household.
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