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Maximizing Solar Energy: Should You Switch to an Electric or Hybrid Water Heater?


  1. Introduction
  2. Understanding Different Water Heaters
    • 2.1 Gas Water Heaters, Including High Efficiency Power Vented Models
    • 2.2 On-Demand (Tankless) Water Heaters
    • 2.3 Electric Water Heaters: How They Work and Efficiency Considerations
    • 2.4 Hybrid (Heat Pump) Water Heaters: How They Work and Efficiency Considerations
  3. Optimizing Water Heaters for Efficiency
    • 3.1 Solar Energy Storage
    • 3.2 Plumbing Optimization
    • 3.3 Ventilation Optimization
    • 3.4 Scheduling Hot Water Production
  4. Considerations When Choosing a Water Heater
    • 4.1 What Are Your Needs?
    • 4.2 Space and Installation Requirements
      • 4.2.1 Location
      • 4.2.2 Electrical Requirements
      • 4.2.3 Maintenance
      • 4.2.4 Noise
    • 4.3 Initial Investment and Long-Term Savings
  5. Calculating Your Specific Water Heating Needs and Costs
    • 5.1 Estimating Water Usage and Required Tank Size
    • 5.2 Calculating Current Gas Usage and Costs
    • 5.3 Calculating Total Energy Required per Year
    • 5.4 Determining Costs and Energy Use for Electric vs. Hybrid Heaters
    • 5.5 Factoring in Solar Energy Production and Net Metering Agreements
  6. Potential Costs and Savings
    • 6.1 Capital Expenditures & Projected Operating Costs
    • 6.2 Payback Periods and Return on Investment
    • 6.3 Understanding and Applying for Rebates and Incentives
  7. Assessing Your Carbon Footprint
    • 7.1 Calculating Your Current Carbon Footprint
    • 7.2 Estimating Your Future Carbon Footprint with Electric and Hybrid Systems
  8. Conclusion: Is it Worth It?
  9. References and Further Reading
    • Case Study Reference: The Impact of Heat Pump Water Heaters on Whole-House Energy Consumption
    • Links
    • Videos


In our era of sustainable living, many homeowners have taken the step to harness the power of solar energy as a conscious choice for eco-friendly and cost-effective living. And while solar panels have become an increasingly common sight on rooftops, fewer homeowners have explored the potential benefits of optimizing their solar energy usage by switching their water heating system from gas to electric or hybrid heat pump.

In homes equipped with solar power, the water heater plays a significant role in overall energy consumption and, consequently, your utility bills. By making the switch to an electric or hybrid model, you can reduce your reliance on fossil fuels and tap into the potential of your solar energy system, which could lead to substantial savings on your electricity bill.

The prospect of such a switch may seem daunting, with questions about efficiency, costs, installation, maintenance, and compatibility with existing systems arising. That’s where this guide comes in. I aim to equip you with a comprehensive understanding of electric and hybrid water heaters, their benefits, and the considerations you should be aware of when deciding whether to make the switch.

In this guide, I will walk you through the different types of water heaters, including gas, on-demand, electric, and hybrid models. I will help you understand how to optimize these systems for maximum efficiency, calculate your specific water heating needs and costs, and evaluate potential savings. You will also gain insights into how such a switch can impact your carbon footprint, and learn about the rebates and incentives available to you.

Whether you are a solar-powered homeowner looking to better utilize your energy production, someone considering a greener lifestyle, or a green technology enthusiast, this guide is for you. Join me as I dive into how to maximize solar energy usage through the switch to an electric or hybrid water heater. Stay tuned, and let’s explore the world of sustainable water heating together.

2. Understanding Different Water Heaters

Before delving into the details of electric and hybrid water heaters, it’s essential to understand the spectrum of options available for heating your home’s water. Here we’ll explore the four main types of water heaters, their workings, efficiencies, and other notable features.

2.1 Gas Water Heaters, Including High Efficiency Power Vented Models

Gas water heaters are a common choice for homeowners, primarily due to their lower operating costs compared to electric models. They operate by burning natural gas to heat a reservoir of water, typically housed in an insulated tank. The heated water is then ready for use when needed.

High-efficiency power vented models, a subtype of gas water heaters, are designed to maximize energy efficiency. These heaters use a powerful blower or fan to expel exhaust gases, reducing heat loss. Power vented models can significantly decrease energy consumption (although they do represent an increase to electricity consumption in order to power the fan), but they typically come with a higher upfront cost compared to standard gas models. Despite these efficiencies, they still rely on fossil fuels, which contribute to greenhouse gas emissions, and they may not optimize the use of solar power generated by your home’s solar panels.

2.2 On-Demand (Tankless) Water Heaters

On-demand or tankless water heaters heat water directly without the use of a storage tank. When a hot water tap is turned on, cold water travels through a pipe into the unit where either a gas burner or electric element heats the water. As a result, these units deliver a constant supply of hot water.

According to the U.S. Department of Energy, these units can be 24%–34% more energy efficient than conventional storage-tank water heaters for homes that use 41 gallons or less of hot water daily. For homes that use a lot of hot water—around 86 gallons per day—tankless water heaters can be 8%–14% more energy efficient.

Although on-demand models can be more energy-efficient than traditional tank models due to their lack of standby heat loss, they have their own set of considerations:

  • Energy Efficiency: On-demand water heaters are more energy-efficient because they only heat water as it’s needed. This is a contrast to tank models that continually heat and store water, even when it’s not immediately required. However, the energy savings of on-demand models can be offset by their higher upfront cost and potential need for expensive retrofitting, especially in older homes.
  • Limited Output: While on-demand models provide hot water as needed, they may struggle to supply multiple demands simultaneously. For example, running a hot shower and dishwasher at the same time could stretch an on-demand heater to its limits, depending on its capacity.
  • Life Expectancy and Maintenance: On-demand water heaters often have a longer lifespan compared to tank models, sometimes lasting 20 years or more. But they do require regular maintenance to keep them running efficiently and to prevent scale buildup.
  • Not Ideal for Solar Power Utilization: As the name suggests, these models provide hot water on demand, which means they lack a storage tank. While this can be an advantage in terms of energy efficiency, it’s a disadvantage for homeowners with solar power installations. The lack of a storage tank means you can’t use the excess energy generated by your solar panels during peak sun hours to heat water for later use.

Due to these reasons, despite their merits, on-demand water heaters might not be the best choice for homes with solar power installations aiming to maximize the utilization of their solar energy.

2.3 Electric Water Heaters: How They Work and Efficiency Considerations

Electric water heaters function similarly to their gas counterparts, but they use electric resistance coils to heat the water in the tank instead of burning gas. In terms of raw energy conversion, they are technically more efficient than gas models, as they directly convert electric energy into heat with minimal loss.

However, when factoring in the cost and source of electricity, their overall efficiency might vary. In areas where electricity is more expensive than gas or where it’s generated from fossil fuels with high transmission losses, electric water heaters might not be the most cost-effective or eco-friendly solution. But if the electricity comes from renewable sources, such as excess solar production, these heaters can be a highly efficient and sustainable water heating solution.

Their installation requirements are simpler, and they eliminate the risk of gas leaks, making them a safer choice. The upfront cost of electric water heaters can be higher than that of gas models, but the cost can be offset over time when they’re used in conjunction with solar power. See What is an Electric Water Heater?

2.4 Hybrid (Heat Pump) Water Heaters: How They Work and Efficiency Considerations

Hybrid water heaters, also known as heat pump water heaters, use electricity to move heat from the ambient air or ground into the water, making them more efficient than traditional electric models. They can be up to three times more energy-efficient, but require certain conditions for optimal operation, such as minimum room temperatures and sufficient space around the unit.

Despite a higher upfront cost, the lower operating costs and the ability to utilize surplus solar energy can make hybrid water heaters an excellent choice for solar homeowners. Check out this guide from the U.S. Department of Energy, or this guide from Natural Resources Canada for more information on hybrid water heaters. See also What is a Hybrid Heat Pump Water Heater?

With a broad understanding of these different water heater types, we can delve deeper into how to optimize their use for efficiency, specific needs, and cost considerations.

3. Optimizing Water Heaters for Efficiency

Achieving maximum efficiency with your water heater isn’t just about choosing the right type; it also involves strategic use and smart installation techniques. In this section, we will explore three key strategies: reducing water usage, optimizing plumbing systems, and smart scheduling.

3.1 Solar Energy Storage

One of the greatest advantages of these water heaters for solar-powered homes is their potential use as an energy storage device. Electric and hybrid heaters can store hot water heated during peak solar production hours for use later in the day. This storage capability enhances solar energy usage and reduces reliance on the grid. This is particularly useful given the intermittent nature of solar power production and the common mismatch between solar production and household energy demand. Since most residential solar systems don’t include a battery storage solution, using your water heater in this way can be an effective method to maximize the use of your self-generated solar power.

3.2 Plumbing and Usage Optimization

Reducing hot water usage is the first step to improving your water heater’s efficiency. By installing low-flow fixtures, taking shorter showers, and only using hot water when necessary, you can drastically decrease your hot water demand. The U.S. Department of Energy provides a detailed guide on how to reduce hot water usage for energy savings.

Another way to improve efficiency is by using a Drain Water Heat Recovery system. This system captures the heat from used hot water and uses it to preheat the cold water entering your water heater, thus reducing the energy required to heat the water. You can learn more about this system from these resources provided by and Natural Resources Canada.

Adding a mixing valve to your water heater can also increase efficiency. It allows you to safely store the water in the tank at a higher temperature, extending the amount of hot water available. Lastly, if you have hard water, using a water softener can help reduce wear on your water heater and extend its lifespan.

3.3 Ventilation Optimization

For hybrid heat pump water heaters, ventilation setup can significantly affect efficiency. One innovative approach is a dynamic ventilation system, where you can adapt your ventilation to the changing seasons, particularly if you have a nearby forced air heating/cooling system.

In winter, you can design the system to feed some furnace air into the water heater’s intake, avoiding the need for the heater to draw in the colder surrounding air. The exhaust is then vented outdoors to avoid the cooled exhaust from reducing your house’s temperature. Conversely, in summer, you can configure the system to draw intake from the outside air and vent the exhaust into your forced air system. This strategy lightens the load on your cooling system, contributing to overall energy efficiency.

The dynamic ventilation system requires a thoughtful design and proper installation, and it could potentially eliminate the need for external ventilation in your utility room, thereby reducing heat loss.

3.4 Scheduling Hot Water Production

Scheduling your hot water production can also enhance your water heater’s efficiency, especially for electric and hybrid heaters. By scheduling your water heater to operate primarily during peak solar production hours, you can ensure that you are making the most of your solar power system. Many modern electric and hybrid water heaters come with programmable controls or even smartphone apps that allow for detailed scheduling of operation times.

Some smart or programmable water heaters allow you to set specific operating times or even adjust operation according to your solar power production. This flexibility enables you to maximize the use of your solar energy. See,, and for more information. Note that you should never have your water heater off for extended periods of time (i.e. while away on vacation) as despite the reduced power consumption it is important to maintain the water at a temperature hot enough to reduce the chance of legionella bacteria growth as the water heater is a standing water source.

With these strategies, you can significantly enhance the efficiency of your water heating system and optimize the use of your energy resources.

4. Considerations When Choosing a Water Heater

Selecting the right water heater involves more than just picking the one with the best reviews. It’s about choosing a system that aligns with your needs, lifestyle, and the constraints of your home. This section will outline several factors that you should consider before making a decision.

4.1 What Are Your Needs?

Your daily hot water requirements should be one of your first considerations. These requirements are determined by factors like the number of people in your household, your daily routines, and any special demands, such as a large soaking tub or a dishwasher. I will discuss how to best calculate your water needs in the next section.

When choosing a water heater, it’s important to consider the size of your household and the peak hot water demand. An undersized water heater may struggle to keep up with demand, while an oversized one can lead to unnecessary energy consumption.

4.2 Space and Installation Requirements

The size and location of your water heater can greatly affect its efficiency. Bigger isn’t always better when it comes to water heaters. A model that is too large for your needs can result in energy wastage, while a unit that is too small may not provide enough hot water. Space constraints in your home can also limit your options. Electric water heaters in general are typically slightly larger than gas for the same capacity as they rely more heavily on insulation to keep enough hot water on hand without continually having to run the heating elements.

4.2.1 Location

The physical location of the water heater in your home can be crucial. Electric water heaters require a nearby power source, while hybrid models also need space for air circulation and, potentially, ducting for ventilation. Hybrid heaters also tend to be taller due to the heat pump on top, so ensure you have enough vertical space, particularly if you plan to maintain the anode rod.

4.2.2 Electrical Requirements

Ensure your home’s electrical system can handle the addition of an electric water heater. Most electric heaters require a 240v 30amp circuit. If the location you are putting it in doesn’t already have such a circuit available, one will have to be added.

If your current panel doesn’t have the necessary capacity to add said circuit, you might need to consider the cost of a panel upgrade.

Finally, if the service to your panel isn’t big enough to handle the combined total of your electrical loads (which can add up quickly if you have A/C, an electric range / oven, an electric dryer, and an electric water heater), you may have to upgrade your service in order to reliably deliver power to all of your loads. You may be able to make an investment in a smart electrical panel like the Span panel in order to dynamically manage your loads so that you can continue using a smaller existing service to your house, but there are additional costs that should be considered with that.

4.2.3 Maintenance

Maintenance requirements are another important consideration. Electric water heaters require periodic maintenance such as tank flushing to remove sediment build-up, and anode rod and heating element replacements. Additionally hybrid water heaters (just like with an outdoor A/C unit) require regular cleaning of the condenser coils and potentially air filtration to avoid clogging the coils with dust and debris. See this video on some other considerations including thermal expansion tanks and drain pans. Regular maintenance will help to prolong the lifespan and maintain the efficiency of your water heater.

4.2.4 Noise

While electric water heaters operate quietly, hybrid models do generate some noise due to their fans. If you’re sensitive to noise or if the heater is located near living or sleeping areas, this is an important factor to consider.

4.3 Initial Investment and Long-Term Savings

The upfront cost of the water heater and the cost of installation are also crucial considerations. While on-demand and hybrid water heaters are typically more expensive upfront, they can offer substantial energy savings over time. Electric models are generally more affordable initially but may have higher operating costs, especially if electricity prices in your area are high.

Keep in mind that the total cost of ownership includes not only the purchase and installation costs but also the cost of operation, maintenance, and the unit’s lifespan. It’s essential to consider all these factors when calculating the overall cost-effectiveness of a water heater. See the next section for details on how to calculate your energy usage.

Remember, choosing a water heater is a long-term investment. It’s essential to consider your present needs and future circumstances to ensure that your choice will serve you well for years to come.

5. Calculating Your Specific Water Heating Needs and Costs

After exploring the basics of different water heaters and the factors to consider when choosing one, it’s time to crunch some numbers. This section will guide you through the process of estimating your water usage and costs, which will be instrumental in selecting the best water heating system for your home.

5.1 Estimating Water Usage and Required Tank Size

This calculation is fairly straightforward – you simply need to add up the estimated water usage of each member of your household. Here are some averages to consider:

  • Shower: 10-25 gallons of hot water
  • Bath: 20 gallons
  • Dishwasher: 6 gallons per cycle
  • Washing machine: 7 gallons per cycle

It’s important to remember that these are estimates and actual usage may vary based on specific appliances, water saving features, and personal habits. See for a handy worksheet / guide to estimating this.

For an example, based on my usage (single family detached house with 2 adults and 2 children) I would need roughly 50 gallons of capacity.

5.2 Calculating Current Gas Usage and Costs

Your gas bill should clearly display your overall gas consumption for a given month in cubic meters. Start by estimating how much of that usage is attributable to your water heater. If you also use gas for heating, you can look at your summer usage to minimize the impact of the furnace. For year-round gas appliances, consider seeking out average consumption figures online for these devices to better isolate your water heater’s consumption.

When isolating the gas consumption of your water heater, consider the following:

  1. Average monthly gas usage attributed to the water heater in cubic meters.
  2. Recent cost per cubic meter of gas used. This figure should include delivery charges, usage charges, and carbon taxes per cubic meter. Additionally, consider municipal surcharges and GST on the cost per cubic meter of gas used.

This will give you a good estimate of how much gas (and therefore money) is currently being used to heat your water.

The following is how I break down my own usage numbers:

  • Total usage (June 2023): 37.772 M³
  • Usage Charges: (~$0.4424 / M³)
    • Delivery Charge: $0.11 / M³
    • Municipal Surcharge (City of Regina) – Delivery: 5% x Delivery Charge
    • Federal GST: 5% x (Delivery Charge + Municipal Surcharge: Delivery)
    • Gas Consumption Charge: $0.1674 / M³
    • Municipal Surcharge (City of Regina) – Gas Consumption: 5% x Gas Consumption Charge
    • Federal GST: 5% x (Gas Consumption Charge + Municipal Surcharge: Gas Consumption)
    • Federal Carbon Charge: $0.1239 / M³
    • Federal GST: 5% x (Federal Carbon Charge)
    • Calculation Used: (0.11 * 1.05 * 1.05) + (0.1674 * 1.05 * 1.05) + (0.1239 * 1.05 * 1.05)
  • Estimated Cost Per Month: $16.71
  • Estimated Cost Per Year: $200.52
  • Estimated Annual Usage: 453.265 M³

5.3 Calculating Total Energy Required Per Year

Once you have estimated the monthly gas consumption of your water heater, it’s time to convert this to a yearly total, and then into a format that can be compared with electric and hybrid systems. Here’s how:

  1. Calculate the total annual usage of the water heater in cubic meters.
  2. Convert this annual figure into gigajoules (GJ) using a conversion rate of 0.038 GJs per cubic meter of natural gas. The resulting number will be helpful for determining your carbon footprint and comparing energy guide ratings between gas, electric, and hybrid water heaters.
  3. Convert your total usage to kWh for comparison with electric water heaters. To do this, convert your GJ figure to kWh using the rate of 1 GJ to 277 kWh.

This information will provide a clearer understanding of the total energy required per year for water heating. With this data, you can accurately calculate the potential costs and savings of switching to an electric or hybrid water heater.

Using the above numbers, my total energy required is the following:

  • Annual Gigajoules: 17.224 GJ (Note, you can also use numbers provided on a Energuide report, mine estimated the gas usage at 26.75 GJ)
  • Annual kWh: 3,910 kWh

5.4 Determining Costs and Energy Use for Electric vs. Hybrid Heaters

Now that you know your yearly energy requirement, you can start comparing the operating costs and energy use of electric and hybrid water heaters. It’s essential to consider not only the unit’s energy factor (EF), which measures its energy efficiency, but also the cost per KWh of electricity in your area.

When calculating the expected usage of a normal electric water using this calculator assuming a 3hr / day usage time and 3000 watt electric water heater (setting the price to $1 / kWh to get an easy kWh per year out at the end), I came up with 3,285 kWh or 11.83 GJ for an annual energy usage.

According to the numbers reported in this case study, which used both a 50 gal tank and a 80 gal tank, the average usage of the hybrid hot water tank was 4.65 kWh / day, or in terms of per year: 1,697.25 kWh or 7.45 GJ. According the EnerGuide information for our selected water heater later on, the usage is 846 kWh or 3.05 GJ.

My current electricity rates are the following:

  • Cost of Electricity: $0.14705 / kWh
  • Federal Carbon Charge: $0.010125 / kWh
  • FCC GST: 5%
  • Municipal Surcharge: 10% of (COE + FCC + FCC GST)
  • GST: 5% of COE
  • Calculation: (((0.14705 * 1.05) + (0.010125 * 1.05)) * 1.10)
  • Adjusted Per kWh: $0.181537125

Given my current rates for electricity, I’m faced with the following numbers:

  • Existing Gas Water Heater: $200.52 / year (based on estimate from bill), or $311.43 / year (based on estimate from Energuide report).
  • Electric Water Heater: $596.35 / year
  • Hybrid Water Heater (2014 Study): $308.06 / year
  • Hybrid Water Heater (Rheem CXE50T10HS45U0): $153.58 / year

5.5 Factoring in Solar Energy Production and Net Metering Agreements

Calculating the contribution of solar energy can be somewhat complex as it depends on the specifics of your solar installation and net metering agreement. However, as a starting point, you can estimate the amount of solar energy that can be directed to water heating by looking at your solar system’s output during peak hours (typically midday).

Then, consider how much of that energy is currently being consumed by other household appliances or returned to the grid. The remaining amount could potentially be used for water heating.

Net metering agreements will vary by locality and utility company. In Saskatchewan the credit rate is roughly half of usage rate.

In some cases, you may receive full retail credit for your excess solar generation, while in others, the credit may be less. It’s essential to understand the terms of your specific agreement to accurately calculate potential savings and to take into account that the total credit you’ll get after switching to an electric or hybrid water heater will be decreased due to the usage of that electricity that would have previously been exported to heat your water.

Now applying my solar generation and net metering rate ($0.075 / kWh) I arrive at the following numbers assuming 100% utilization of purely solar energy and calculating the loss of the net metering credit as being the opportunity cost of the electricity in the formula (Utility Cost + Net Metering Loss)

  • Gas Water Heater: $200.52 + $0 = $200.52 / year
  • Electric Water Heater: $0 + $246.38 = $246.38 / year
  • Hybrid Water Heater (2014 Study): $0 + $127.28 = $127.28 / year
  • Hybrid Water Heater (Rheem CXE50T10HS45U0): $0 + $63.45 = $63.45 / year

6. Potential Costs and Savings

After calculating your specific water heating needs and costs, it’s time to delve into the potential costs and savings associated with switching to an electric or hybrid water heater. These considerations will play a crucial role in your final decision.

6.1 Capital Expenditures & Projected Operating Costs

In order to calculate your savings you must first figure out how much it will cost you to swap. At a minimum, you are looking at the following assuming a ~50 gallon tank in Regina, Saskatchewan.

NOTE: These are very rough numbers just meant to give an example of how to calculate your costs

Cost of the Water Heater

Cost of Installation:

  • ~$400 including permit to swap the tanks (Electric and Hybrid)
  • ~$200 including permit to swap the tanks (Gas)

Potential Extra Costs:

  • ~$2-500 to install a new 240v 300 amp circuit
  • ~$1-3000 to install a new electrical panel
  • ~+$1,000 to upgrade your service from 100 amp to 200 amp
  • ~$500 – $900 to add a water heat recovery unit
  • ~$200 – $500 to add a water mixing valve
  • ~$400 – $1000 to add custom ventilation for a winter / summer mode

Using these numbers (VERY LOOSELY) we come up with an optimistic installation cost of:

  • ~$1.9k for a new Gas Water Heater
  • ~$1.5k for an Electric Water Heater
  • ~$3.5k for a Hybrid Electric Water Heater

and a pessimistic installation cost of:

  • ~$1.9k for a new Gas Water Heater
  • ~$8.4k for an Electric Water Heater
  • ~$10.4k for a Hybrid Electric Water Heater

Given our estimates on costs of energy usage and assuming similar maintenance costs across the tanks we come up with the following energy use savings per year:

  • Gas: $0 / year (the status quo)
  • Electric: INCREASE of $45.86 / year
  • Hybrid Electric (2014 Case Study): $73.24 / year
  • Hybrid Electric (Rheem CXE50T10HS45U0): $137.07 / year

6.2 Payback Periods and Return on Investment

The payback period refers to the time it takes for the savings from a new water heater to equal its initial cost. This calculation depends on the difference in operating costs between your current and new water heaters and the cost of the new appliance. It’s important to keep in mind that payback periods can vary greatly, but a shorter payback period is typically more desirable.

The return on investment (ROI) is a measure of the profitability of the investment in the new water heater. It’s calculated as the net savings (total savings minus total cost) divided by the total cost.

Continuing on the calculations from before we arrive at the following costs over a span of 10 years:

  • Do nothing (Energy): $2,005.20
  • Replace with Gas Water Heater (Install + Energy): $3,905.20
  • Replace with Electric Water Heater Optimistic (Install + Energy): $3,963.80
  • Replace with Hybrid Water Heater (2014 Case Study) Optimistic (Install + Energy): $4,772.80
  • Replace with Hybrid Water Heater (Rheem CXE50T10HS45U0) Optimistic (Install + Energy): $4,134.50
  • Replace with Electric Water Heater Pessimistic (Install + Energy): $10,863.80
  • Replace with Hybrid Water Heater (2014 Case Study) Pessimistic (Install + Energy): $11,672.80
  • Replace with Hybrid Water Heater (Rheem CXE50T10HS45U0) Pessimistic (Install + Energy): $11,034.50

NOTE: This does not take into account any increases in either gas or electricity rates, both of which are scheduled to go over over the next several years (while solar power will remain the same actual cost of $0 and might increase in opportunity cost depending on whether net metering rates are adjusted to match the increasing consumption rates over the coming years). It also doesn’t take into account any of the other efficiency improvements (plumbing, ventilation, and scheduling) that could be done nor the impact it might have on the rest of your house’s efficiency.

With the above caveats and rough numbers I arrive at the following adjusted numbers after 10 years of usage.

  • Do Nothing: $0 baseline
  • Replace with Gas: $1.9k
  • Replace with Electric: $2k
  • Replace with Rheem CXE50T10HS45U0: $2.1k

Based on those numbers alone, it would not make sense in my specific case to invest in replacing my current gas water heater simply to better utilize my solar surplus. However, even such a detailed analysis is still not telling the whole picture. I have not yet factored in any rebates or incentives, and I am neglecting to account for the fact that my current gas water heater is a rental, at $18 / month.

If I take into account the rental costs & savings, I can adjust the numbers to the following:

  • Do Nothing: $0 baseline
  • Replace with Rented Gas: $0 (rental company is responsible for ensuring that it is always in working order)
  • Replace with Electric: $1438.60 ($4 / month increase from my rental company for installation, permitting, and the unit itself + $500 to install the circuit + $458.60 from the increased cost of the electricity vs gas)
  • Replace with Rheem: $0 ($2.1k net savings + $2,160 in savings from no more rental fees + $45 in anode rod replacements over 10 years)

Further taking into account rebates and incentives, in my particular case I’m not really able to take advantage of any given that I already used most of them to help pay for the solar system in the first place, but if they were available they would further tip the scales in favour of the hybrid water heater.

6.3 Understanding and Applying for Rebates and Incentives

Rebates and incentives can significantly reduce the initial cost of a new water heater, making the switch more financially attractive. Various programs offer these incentives, including federal and state governments, utility companies, and manufacturers.

For example, hybrid water heaters can be eligible for up to $1000 from the Greener Homes Grant, as well as interest-free loans from the Greener Homes Loan Program. The Residential Equipment Replacement Rebate from SaskEnergy is another potential source of savings. Additionally, mortgage insurance companies in Canada, such as CHMC – Eco Plus Program and Sagen – Energy Efficient Housing Program, offer programs that can provide financial benefits for energy-efficient retrofits. These programs change over time and differ by region, so be sure to check what’s currently available in your area.

By taking the time to understand the potential costs and savings, you’ll have a solid foundation for making an informed decision about whether to switch to an electric or hybrid water heater.

7. Assessing Your Carbon Footprint

An essential part of considering a switch to an electric or hybrid water heater is understanding its potential impact on your carbon footprint. As society becomes increasingly focused on reducing carbon emissions, this aspect can play a significant role in your decision-making process.

7.1 Calculating Your Current Carbon Footprint

Your current carbon footprint from water heating depends primarily on the type of water heater you have and the source of your energy. Gas water heaters emit carbon dioxide directly into the atmosphere, while electric and hybrid water heaters’ carbon footprints depend on the source of electricity.

If your electricity comes from a renewable source, like your solar panels, then your carbon footprint from water heating could be significantly reduced. On the other hand, if your electricity comes from coal or natural gas power plants, your carbon footprint could potentially be higher. The U.S. Environmental Protection Agency’s (EPA) Greenhouse Gas Equivalencies Calculator can help you estimate your current carbon emissions.

7.2 Estimating Your Future Carbon Footprint with Electric and Hybrid Systems

Electric and hybrid water heaters, when powered by renewable energy sources like solar power, can reduce or even eliminate the carbon emissions associated with water heating.

However, it’s important to take into account that hybrid water heaters may still use some electricity from the grid, depending on your solar system’s output and your hot water usage. The net result will depend on your particular situation, but switching to an electric or hybrid water heater powered by solar energy can often lead to a significant reduction in carbon emissions.

Through assessing your carbon footprint, you’ll gain an understanding of the environmental impact of your decision, adding another layer to your overall evaluation of whether switching to an electric or hybrid water heater is the right choice for you.

Simply based off of the numbers on my house’s EnerGuide report, switching from my current gas water heater (26.75 GJ) to the Rheem hybrid water heater (3.05 GJ) could represent a significant reduction of my carbon footprint / annual energy consumption; which could further tip the scales by impacting what sort of grants I would be eligible for.

Conclusion: Is it Worth It?

As we’ve explored, switching your water heater from gas to electric or hybrid can offer various benefits, from cost savings and increased efficiency to a reduction in your carbon footprint. However, it also involves several considerations, such as your household’s hot water needs, the suitability of your home for the installation of a new system, the cost of the switch, and the source of your electricity.

If you’re a homeowner with a solar power system, you stand to gain the most from this switch. Not only could you use your surplus solar power more effectively, but you could also potentially save on your energy bills and lower your carbon emissions significantly.

However, it’s crucial to remember that every situation is unique. The best choice for you depends on your individual circumstances, such as your local climate, the design of your home, your hot water usage, your current needs (do you need a replacement water heater regardless?) and your budget.

I hope this guide has given you the information and tools you need to make an informed decision about whether switching to an electric or hybrid water heater is the right choice for you. Remember, the journey towards sustainable living is a marathon, not a sprint, and every step you take towards reducing your carbon footprint is a step in the right direction.

References and Further Reading

As you continue your journey towards understanding and implementing sustainable water heating in your home, here are some additional resources to further your knowledge:

  1. “The Impact of Heat Pump Water Heaters on Whole-House Energy Consumption” – Case Study: A case study from The Canadian Centre for Housing Technology exploring the effects of heat pump water heaters on energy usage.
  2. Natural Resources Canada – Calculate your Energy Cost and Consumption
  3. Other articles on Heat Pump Water Heaters

Remember, the more you know about your home and your energy usage, the better choices you can make for your wallet and the environment. Happy reading!


For a more visual understanding, consider watching these videos:

  1. 2024 Heat Pump Water Heater Buyers Guide
  2. Water Heater Buying Guide 2022 – Energy Star rating, price, fuel, rebates, etc.
  3. Heat Pumps: The Future of Home Heating

I hope these resources give you a greater depth of understanding as you consider switching from a gas water heater to an electric or hybrid model.

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