4 ms·

My baseline electricity rate is $0.29/kWh and my baseline gas rate converts to about $0.06/kWh. Weighted for best-case efficiency that makes the the heat pump w

My baseline electricity rate is $0.29/kWh and my baseline gas rate converts to about $0.06/kWh. Weighted for best-case efficiency that makes the the heat pump water heater 18% more expensive to run than the gas heater. Adding cognitive burden to carefully engineer the water heater's behavior and training my family to change their showering habits to leverage TOU just to maybe-break-even is a bad proposition. Plus, extrapolating the last ten years of rates, I expect electric rates will rise faster than gas rates and make the value proposition worse over time. Edit: And of course that ignores that I have the condensing gas heater and I don't have the heat pump, so there's capex to cover as well.

danans 5y ago
It all depends on the efficiency of your existing water heater, and your local electric rates. I pay the same electric rates as you - $.29/kWh (PG&E). For my family of 4 using 1.024MBTU/month of heat for water, the amount of electricity consumed by the heat pump hot water heater is about 100kWh/month, which works out to or $348/year. Furthermore, in my area, I have access to a municipal utility program that will pay me $60/year to automatically run my heat pump water heater when renewables are in over-supply, thereby functioning as a kind of capacitor for intermittent renewable supply on the grid, and lowering my water heating electricity cost to around $.25/kWh. With my previous standard gas water heater (efficiency 65%), I was using 20 therms per month for water heating. At my current local natural gas prices of $2/therm, that would have been $480/year for hot water heating if I kept that equipment. With a condensing natural gas unit at 96% efficiency it would cost $250/year, $90/year less than the heat pump - not a huge difference. Remember that there are a lot of old standard gas water heaters out there that are only 50-65% efficient. A heat pump water heater is very competitive to replace those. Natural gas prices also aren't going down, and are far more subject to geo-political supply shocks, as we've seen recently, resulting in winter natural gas rates recently going as high as $2.25/therm. That's a far greater jump than electricity rates vs last year. In places like the Pacific Northwest, or Sacramento CA with clean hydro power, electricity rates are $.09 to $.18/kWh haven't budged much at all. Heat pump water heaters are even better in places like that. Heat pump water heaters also have the ancillary benefit over natural gas of removing a major source of combustion from within your home/garage, which is better for air quality, and also removes a source of depressurization of your house's air if the water heater is contained within conditioned space.
- zbrozek 5y ago
  Oh for sure there's tons of benefits if it can be made to make sense. I'm going to get one as my solar and battery capacity grow. But right now it's unimaginable to do so in PG&E territory where electricity prices rise 4-5x faster than inflation. I'd rather roll the dice on geopolitics for gas pricing. See slide 16, which already looks quaint just a year or two later. https://autl.assembly.ca.gov/sites/autl.assembly.ca.gov/files/Public%20Advocates%20Office%20Rate%20%20Bill%20Trend%20Presentation.pdf https://autl.assembly.ca.gov/sites/autl.assembly.ca.gov/file...
  - danans 5y ago
    > See slide 16, which already looks quaint just a year or two later. That's nothing. PG&E's natural gas rates have gone up 400% since 2008 (inflation since that time has been about 30%): https://www.pge.com/tariffs/Residential.pdf https://www.pge.com/tariffs/Residential.pdf The huge jump happened in 2016, and it's stayed high since. The jump reflected increase in natural gas prices and also costs for PG&Es San Bruno pipeline explosion and the resulting higher cost of maintenance of natural gas infrastructure. It was a clear demonstration of the hidden liabilities in old natural gas distribution infrastructure. It's interesting to note how PG&E's stock price also fared from 2016: https://www.google.com/search?q=pge+stock+price&oq=pge+stock+price&aqs=chrome..69i57j0i512l3j0i22i30l6.1869j1j7&sourceid=chrome&ie=UTF-8 https://www.google.com/search?q=pge+stock+price&oq=pge+stock... which also is when they stopped paying a dividend: https://www.streetinsider.com/dividend_history.php?q=pcg https://www.streetinsider.com/dividend_history.php?q=pcg
    - zbrozek 5y ago
      So we've paid the cost of the gas line upgrade but the cost of the electric upgrade to mitigate the fire risk is still incoming. Therefore we should expect a price shock on electricity in PG&E territory above-and-beyond the large-but-steady increases over the last eight years. And so the yawning gap will get even larger. :( This is a shame because I strongly prefer electric everything, but not enough to make uneconomic decisions.

danans 5y ago

It all depends on the efficiency of your existing water heater, and your local electric rates. I pay the same electric rates as you - $.29/kWh (PG&E). For my family of 4 using 1.024MBTU/month of heat for water, the amount of electricity consumed by the heat pump hot water heater is about 100kWh/month, which works out to or $348/year. Furthermore, in my area, I have access to a municipal utility program that will pay me $60/year to automatically run my heat pump water heater when renewables are in over-supply, thereby functioning as a kind of capacitor for intermittent renewable supply on the grid, and lowering my water heating electricity cost to around $.25/kWh. With my previous standard gas water heater (efficiency 65%), I was using 20 therms per month for water heating. At my current local natural gas prices of $2/therm, that would have been $480/year for hot water heating if I kept that equipment. With a condensing natural gas unit at 96% efficiency it would cost $250/year, $90/year less than the heat pump - not a huge difference. Remember that there are a lot of old standard gas water heaters out there that are only 50-65% efficient. A heat pump water heater is very competitive to replace those. Natural gas prices also aren't going down, and are far more subject to geo-political supply shocks, as we've seen recently, resulting in winter natural gas rates recently going as high as $2.25/therm. That's a far greater jump than electricity rates vs last year. In places like the Pacific Northwest, or Sacramento CA with clean hydro power, electricity rates are $.09 to $.18/kWh haven't budged much at all. Heat pump water heaters are even better in places like that. Heat pump water heaters also have the ancillary benefit over natural gas of removing a major source of combustion from within your home/garage, which is better for air quality, and also removes a source of depressurization of your house's air if the water heater is contained within conditioned space.

zbrozek 5y ago
Oh for sure there's tons of benefits if it can be made to make sense. I'm going to get one as my solar and battery capacity grow. But right now it's unimaginable to do so in PG&E territory where electricity prices rise 4-5x faster than inflation. I'd rather roll the dice on geopolitics for gas pricing. See slide 16, which already looks quaint just a year or two later. https://autl.assembly.ca.gov/sites/autl.assembly.ca.gov/files/Public%20Advocates%20Office%20Rate%20%20Bill%20Trend%20Presentation.pdf https://autl.assembly.ca.gov/sites/autl.assembly.ca.gov/file...
- danans 5y ago
  > See slide 16, which already looks quaint just a year or two later. That's nothing. PG&E's natural gas rates have gone up 400% since 2008 (inflation since that time has been about 30%): https://www.pge.com/tariffs/Residential.pdf https://www.pge.com/tariffs/Residential.pdf The huge jump happened in 2016, and it's stayed high since. The jump reflected increase in natural gas prices and also costs for PG&Es San Bruno pipeline explosion and the resulting higher cost of maintenance of natural gas infrastructure. It was a clear demonstration of the hidden liabilities in old natural gas distribution infrastructure. It's interesting to note how PG&E's stock price also fared from 2016: https://www.google.com/search?q=pge+stock+price&oq=pge+stock+price&aqs=chrome..69i57j0i512l3j0i22i30l6.1869j1j7&sourceid=chrome&ie=UTF-8 https://www.google.com/search?q=pge+stock+price&oq=pge+stock... which also is when they stopped paying a dividend: https://www.streetinsider.com/dividend_history.php?q=pcg https://www.streetinsider.com/dividend_history.php?q=pcg
  - zbrozek 5y ago
    So we've paid the cost of the gas line upgrade but the cost of the electric upgrade to mitigate the fire risk is still incoming. Therefore we should expect a price shock on electricity in PG&E territory above-and-beyond the large-but-steady increases over the last eight years. And so the yawning gap will get even larger. :( This is a shame because I strongly prefer electric everything, but not enough to make uneconomic decisions.