CALL US NOW
We’re Available 24/7
1300 362 250

Hot Water System Case Study

Rather than writing about products, brands and types of water heaters, I want to share a story which actually happened, at my place.

Just to paint the picture, we live in an old house and have 5 kids. Our existing hot water heater was a Rheem 250 litre electric which was on mains power. Our average quarterly power bills are around $1300. What we know is that mains power (not off-peak) is the most expensive type of water heater to run. The running costs of these heaters hover around 35% of your total power bill, which is a lot.

We decided to remove the heater and install a Rinnai 26 external natural gas instantaneous hot water system. For a start, this freed up a huge amount of space in our laundry where the old Rheem tank used to live. The new Rinnai bolted nicely to the wall outside, we moved the pipework, put in a new outdoor powerpoint for it and it was done.

Sure enough, the first power bill came in and it was exactly 35% less! That was a $455 dollar saving, remember, that was a quarterly bill, so our annual power saving was now over $1800!. There was an increase in the gas bill obviously, which was minimal. The gas bill increased by $50 a quarter, so $200 a year. This was now a clear running cost saving of $1620 per year.

Now here’s where these figures get exciting. Rinnai at the moment are saying the Infinity heaters are good for up to 25 years. Let’s say we only get 20 years out of it, which is 20 times $1620 which equals $32,400 in total running cost savings.

If you want to save a buck and you have gas, you just have to install an instantaneous system. Here’s the problem we face on a daily basis though – some people can’t see the big picture. To replace that old 250-litre electric tank may cost around $2,000 to supply, fit, replace all the valves and dump the old one. The new Rinnai system on average will cost around $3,500 if the gas is easily accessible and there is power close by. The $1500 difference between the two systems will be more than recouped in the first year! The tank on average is only going to last you around ten years too!

So very roughly here is a comparison:

250-litre constant electric water heater – ie Rheem 250. Supply and install $2000, annual running costs $1820. Considering you’ll need two of these in 20 years, the installs will cost you $4000, over 20 years you will pay $36,400 to run it, add that together and you will pay $40,400 over 20 years.

Instantaneous 26 litres per minute heater – ie Rinnai 26. Supply and install around $3,500 to $4,000, annual running costs $250. You’ll only need one in 20 years. Running cost over 20 years $5,000. You have now spent $9,000 over 20 years.

Seriously, can you see now why we get so frustrated when people think they are saving their money by getting the “cheaper” electric model?

These figures are approximations only, each install is different, these figures represent more of an average. Even if the initial install of the Rinnai is more, the savings are huge. There are smaller and larger storage electric tanks and there are smaller and larger versions of instant gas heaters as well.

Did I happen to mention that instantaneous heaters never run out as well?

When we say it’s our job to have you spend the least amount of money possible we seriously mean it!

 

Kevin O’Kane

Managing Director

Highlander Plumbing.