We finished last month's column on life cycle costs for water heating with a 50-gal. propane tank-type water heater (July, pg. 32). The reason behind this discussion is to explain why it made sense for me to spend $10,000 on solar collectors to heat domestic hot water.
As before, I've included an annual inflation rate of just 5% for all costs. In just the past two weeks, we've received notices that a number of products that we use frequently have increased in cost by 11% or more. Looking back over what we've had to charge for labor per-hour to obtain a break-even cost, the average inflation rate has historically been a bit more than 7%.
As for fossil fuels — that's like having a tiger by the tail! In researching these issues for this series, I came across more than a few articles citing a 10% per-year hike in fuel costs. Overall, it would appear that 5% is a fair and conservative approach.
Each water heater is being used to heat 50 gal. of water per day. The $20 first-year allowance for ongoing maintenance assumes you have an existing service contract and will add the water heater to an already existing list.
Here are the life-cycle costs for a propane-fired tankless heater:
- $2,500 installed cost in 2007 (retrofit);
- .84 energy factor;
- First-year operating cost = $323.32
- if propane is $2.05 per gal.;
- Add $20 toward an ongoing maintenance budget for an annual clean-and-tune;
- Our first-year total comes to $2,843.32;
- Our second-year operating cost and maintenance fee will increase from $353.32 to $378.51;
- By the time year 2026 comes to a close, we'll have spent $14,402.57;
- In the year 2027, we'll install a replacement for $4,245.28 (this installed price is based upon a direct tankless-to tankless replacement cost of $1,600 in 2007);
- Our total life cycle-cost by the year 2041 will be $39,590.35.
For a natural gas tankless heater:
- $2,500 installed cost in 2007 (retrofit);
- .82 EF;
- First-year operating cost = $198 if natural gas is $.01335 per cu. ft.;
- Add $20 toward an ongoing maintenance budget for an annual clean-and-tune;
- Our first-year total comes to $2,718;
- Our second-year operating cost and maintenance fee will increase from $218 to $240.35;
- By the time year 2026 comes to a close, we'll have spent $10,057.90;
- In the year 2027, we'll install a replacement for $4,245.28 (this installed price is based upon a direct tankless-to tankless replacement cost of $1,600 in 2007);
- Our total life-cycle cost in the year 2041 will be $27,711.83.
For a natural gas tank-type water heater:
- $850 installed cost in 2007;
- .63 EF; .82 thermal efficiency;
- First-year operating cost = $257.71 if natural gas is $.01335 per cu. ft.;
- Add $20 toward an ongoing maintenance budget for an annual clean-and-tune;
- Our first-year total comes to $1,127.71;
- Our second-year operating cost and maintenance fee will increase from $277.71 to $306.18;
- By the time year 2018 comes to a close, we'll have spent $5,477.55;
- In the year 2019, we'll install a replacement for $1,526.48 and by the year 2032 that same model will be installed for $2,878.40;
- Our total life-cycle cost in the year 2041 will be $32,096.62.
The costs for an indirect-fired water heater would be:
- $2,500 installed cost in 2007;
- .87 EF;
- TE is assumed to be 92% when connected to a modulating condensing boiler;
- First-year operating cost = $186.62 if natural gas is $.01335 per cu. ft.;
- Add $20 toward an ongoing maintenance budget for an annual clean-and-tune.
- Our first year total comes to $2,706.62.
- Our second-year operating cost and maintenance fee will increase from $206.62 to $227.80.
- By the time year 2026 comes to a close, we'll have spent $5,477.55.
- In the year 2027, we'll install a replacement for $4,245.28 (this installed price is based upon a indirect-to-indirect replacement cost of $1,600 in 2007);
- Our total life-cycle cost in the year 2041 will be $26,330.30.
The comparable numbers for a solar water heating system are:
- $10,000 installed cost in 2007 less a $2,000 federal tax credit for a net installed price of $8,000;
- Life expectancy of top-notch solar components are said to be 35 years, and we'll use the 20-year mark for replacing the storage tank;
- . 87EF;
- TE is dependent upon panel or vacuum tube ratings and the qualifications of the installer;
- First-year operating cost = $0 if the electricity for controls and pumping comes from photo-voltaic solar panels;
- Add $20 toward an ongoing maintenance budget for an annual inspection and glycol check, if needed.
- Our first-year total comes to $8,020.00.
- Our second-year operating cost and maintenance fee will increase from $20 to $21.
- By the time year 2026 comes to a close, we'll have spent $8,630.78.
- In the year 2027, we'll install a replacement storage tank for $4,775.94 (this installed price is based upon a storage tank replacement cost of $1,800 in 2007);
- Our total life-cycle cost in the year 2041 will be $14,497.28.
To be fair, the solar system I've outlined (my own) does not currently provide 100% of our hot water. Looking forward to next Thanksgiving, the anniversary of when we activated our Viessmann 30-vacuum-tube system, I would expect we will have provided 70% of our total hot water needs, and that's without altering our lifestyles. Were we off-grid, our hot water usage habits would revolve around the sun's energy and weather patterns.
At present, we use a 75-gal. indirect connected to a modulating condensing boiler and the solar feeds into that tank. But we also have hydronic radiant heating, and I'll be expanding the solar array to accommodate hydronic thermal storage. Once that's in place,
100% of our potable hot water will be derived from the sun's energy. Once finished, my total solar costs to generate 100% of our domestic hot water for 34 years should be about $22,400.