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In Hot Water? Gas or Electric?

April 29, 2008

Over lunch with a friend asked my opinion on installing a gas or electric tankless water heater. I have a gas tankless and LOVE it. In the past I’d always recommend getting a gas model. Gas is historically cheap and has a lower carbon footprint for heating. This is because electricity for heat generation looses efficiency when we make it mechanically from heat, transport it over wires, and then convert it back to heat. Gas converts directly into heat with high efficiency.

However, a new day is dawning in which the price of carbon-based fuels will continue to climb due to limited supply. Like gas, the cost of electricity will also climb because it’s generated primarily from carbon-based fuels. Unlike gas, we can’t store electricity so our future costs will be controlled by demand-based spot pricing. We will soon be in a market where it makes a dramatic difference when you use electricity not just how much you use.

For my friend, his off-peak shower (as per the grid, not his personal experience) will be much less expensive than his during peak shower. In this new utility model, he’ll have a degree of control about how much he pays for hot water. Even if prices go way up, he still have a way to economize based on time of day.

Since we can store gas, there is no need for demand pricing. My friend’s showers get more and more expensive as prices rise and he has no recourse except cold showers.

I suspect that we’re all in for a cold shower before all this settles down. Until then, buy electric.

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