New water heating standards from the U.S. Department of Energy went into effect in 2015. Under the National Appliance Energy Conservation Act, all new storage tank water heaters—regardless of fuel source—must meet a higher efficiency rating.
Manufacturers say those increases in energy efficiency can be achieved in many cases by using more insulation. However, this will make the storage tank units a few inches taller and wider—while also increasing their cost. Depending on the model and tank capacity, new tank water heaters may be as much as three times more expensive as older ones.
That increased size will also have a big effect on homes with space constraints; a small propane gas tankless unit that hangs on the wall will be an easier fit than new, bigger tanks.
These regulatory changes are also expected to close the upfront cost gap between propane tankless units and electric storage tank heaters. Propane tankless units may even end up having a price advantage!
If you’re thinking about replacing your water heater soon, we recommend exploring your options in tankless water heaters. (See related article below.)
*Source: Propane Education Research Council.