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Gas vs. Electric Hot Water & Heat

Gas vs. Electric Hot Water & Heat

No one wants to spend more than they have to on energy.

By Gary Foreman

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Rising energy costs are on many people's minds as we head toward winter. How will rising prices affect our budgets and what can we do to limit the damage?

If you already heat with natural gas, does it make sense to replace an electric hot water heater with a gas heater? What about getting rid of the gas furnace and refitting the house with electric heat?

Get Out of Hot Water
The U.S. Dept. of Energy (DOE) says that 14 percent of our home energy usage is for heating water. By comparison, 44 percent is for heating and air conditioning. According to the Rocky Mountain Institute, an entrepreneurial nonprofit organization that fosters the efficient and restorative use of resources, Americans spend more than $15 billion to heat water each year.

If you have a gas hot water heater, keep it. Generally it has proven to be cheaper to heat water with gas than with electricity. In February 2005, the Metropolitan Utilities District of Omaha, Nebraska, estimated that an electric water heater cost 75 percent more to operate than a gas hot water heater.

The Rocky Mountain Institute claims energy-saving techniques can reduce the cost of heating water by two thirds. The four biggest savers are washing clothes in cold water, lowering the water heater thermostat to 120°F., using efficient showerheads, and insulating the water heater. Combining those would reduce a bill by a third.

The first two measures don’t cost anything and the other two are inexpensive. Installing low-flow showerheads is a do-it-yourself project. You can wrap a blanket of R-12 insulation around the water heater yourself. (Check the manufacturer first, since some recommend against extra insulation.)

Although a little more expensive, you might also want to check out the cost of installing a timer on the water heater.

Know Your Furnace
What makes comparing gas furnaces and electric heat difficult is getting an apples to apples measurement. DOE estimates that 1 kWh of electricity is worth 3.3 cubic feet of natural gas in terms of generating heat. A common method of comparison translates everything into how much energy is needed to produce a BTU. But even that just measures heat generation. It doesn't take into account how efficient the heat delivery system is.

If you're seriously shopping for a new furnace or water heater, you'll need to get estimates based specifically on your own home and lifestyle. That will be better than a generic estimate anyway.

The DOE suggests an energy audit as a good way to find out where you're using (or wasting) energy. Often your local power provider will do an audit free of charge. Or you can do a simple audit yourself. An Internet search will uncover instructions.

Even with the current increase in prices, gas is still cheaper than electric for generating heat. And, electric prices will probably rise, too. About 20 percent of electricity in the U.S. is generated from natural gas and petroleum, so an increase in those prices tends to raise electric costs, too.

In most cases, the best thing a homeowner can do is to make sure that they're not wasting energy. The DOE says that if you total up all the leaks around windows and doors it's the same as leaving a window wide open. Weather-stripping is an easy, inexpensive way to eliminate those leaks. A three-dollar tube of caulking could save you quite a bit.

Space Savers
The other key to winter heating, especially when there's only one person at home, is to only heat the areas where you are. You don't need to heat the entire home.

Yes, a central furnace is more efficient than a space heater, but only if they're heating the same sized area. In most cases, the space heater only has to heat one room, while the furnace will heat the entire residence. So even if the space heater is less efficient, it will still use less energy than running your furnace at full blast.

Winter energy bills will always be a challenge, i.e. when prices rise and you live in a cold climate. Fortunately there are things that consumers can do to reduce their bills short of replacing water heaters and furnaces.

Gary Foreman is a former purchasing manager who currently edits The Dollar Stretcher Web site and newsletters.

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