Oil vs gas water heating

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I live in the northeast. We are landlords of a multi unit apartment. Currently, oil is going to be going up to $3.00 to $3.20 per gal. The local gas co is charging $1.55 per Therm. Most of the house uses gas for heat and hot water, each paying their own usage. The 1st floor uses oil for heat and hot water, which we pay for. It is occupied by a family of 5, which uses between 1000-1200 gal of oil per year. I turn the heat off after the heating season, leaving the furnace running for the hot water. The furnace is an old American Severn converted coal to oil burning unit, which my oil co tells me is in very good condition for its age. The burner is a Blue Angel Model HS. I don't know the efficiency of it. It is a forced hot water/radiator system. The hot water, currently runs off a small tankless unit, which does tend to run out of hot water on them frequently. It is showing signs of possible leaking, so I need to do something. My 2 options to bypass the tankless are: 1. Continue using the furnace, and installing a 30gal stainless steel indirect water heater, or 2. Install a 40 gal gas water heater, which would allow me to shut down the furnace completely, during the non-use period. According to my info, both heaters would suffice for the amount of usage needed. Which would be most cost effective, short and long term? Thank you.
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Recruiter wrote:

Here's what I would do.....Go to www.heatinghelp.com and post your exact question on the "Wall" on that site. That group has bailed me out of a few situations.
Paul
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My sense is to go with the 40 gal gas heater. Since it's more common equipment, it will cost less than the indirect. And it will be more easily serviced, since more plumbers have worked on ordinary NG heaters.
As to the cost of fuel, I don't know. However, a coal unit converted to oil is not likely to be energy efficient. Even if it's in good shape.
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Christopher A. Young
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i would replace the oil furnace, for better efficency, and then decide about a seperate or combined hot water tank.
my off the cuff opinion is you can probably save about 40% of you gas bill by upgrading.
incidently the oil company LOVES your furnace piggy, they are a business why recommend doing something to cut their sales:(
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" I turn the heat off after the heating season, leaving the furnace running for the hot water.......The hot water, currently runs off a small tankless unit, which does tend to run out of hot water on them frequently. "
This is confusing. Is the current hot water supplied by the furnace or a seperate system?
In any case, I would agree with the comments that an old coal furnace converted ot oil is likely very inefficient compared to today's systems. I would seriously consider replacing it. Also, I would think that a seperate gas water heater is going to be more efficient than using a furnace to heat the hot water. In the winter, when the furnace is running to generate heat too, it may not make much difference. But I believe firing a larger furnace, especially an ancient one just to supply water is going to be a losing proposition.
You could also consider an on demand hot water gas system.
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I just had someone in from the oil co to give me some additional info. My burner is running at 78.5-80% efficiency. I probably don't need to upgrade the burner right now. Even he admitted that, although the furnace is in good condition, it is using much more oil than it probably should. Replacing the furnace w/ an internal water heater is about $5000 and a furnace with an indirect unit is about $6800. Both numbers are tough to swallow this year. The alternative is to cap the lines to the tankless and install a gas Water heater. According to the gas co, it should cost about $50/ mo to run the HW. On the other hand, according to the oil co, based on a 1200 gal consumpsion, probably 250 gal is HW. so now we are only talking about the difference of $600/yr for gas vs $750/yr for oil. On top of that, it will cost about $700 to install the new heater and cap off the tankless. Then, as a friend of mine reminded me, if the cost of gas continues to rise, the $150/yr difference disappears since the oil is capped at that price.
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Recruiter wrote:

How do you reconcile the fact that it uses much more oil with the 80% efficiancy statement?
Replacing the furnace w/ an internal water heater is

Oil is capped? But for how long? Also, I think the guestimate you are getting from the oil company as to how much of the oil is going for heat vs hot water is probably just a shot in the dark. If they are close to being right, at $150 a year savings, a seperate gas water heater would pay for itself pretty quickly.
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Recruiter wrote:

That is only combustion efficiency, and not that great at that. A new furnace would certainly be much better than that. I'll bet you are running the hig 60's in total efficiency
I probably don't need to

Well, you need to do something, and the only thing with any real payback is a new furnace, and at 3.00 a gallon, only a 10 percent increase has a 10 year return more or less.
Both

while gas is no cheaper than oil[they track pricewise always], you can get a more efficient gas furnace than oil and usually cheaper. If you figure everything being equal[!] the swithc from your probably 70 percent at best to a 90 percent gas could save you 900 bucks a year in fuel[ at 3.50 a gallon oil]
when you figure in the probable lower service costs of the furnace, I'll bet it is almost free
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Wow, $700 to install a gas water heater? I guess the price of copper musta gone up a lot. And, also, needs a custom run of black iron for the gas.
When wood stove guys old water heater loop, they have to dril a small hole in the cap, to let out the steam pressure. Sometimes old woodstove explode, to pressure in the internal heater loop. Not as much an issue on a boiler that maintains 140F or so.
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Christopher A. Young
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Gee...and thats why all the new units we (we being a group of licenced pros, not guys like you) are installing at new construction sites are getting stolen. I guess thats why a lineset that used to be $50 is now $250. I guess thats why the average cost of a units gone sky high. I guess thats why people are getting arrested all around here due to the price of scrap copper...I guess thats why I cant find a section of old copper pipe out back..
http://news.cincypost.com/apps/pbcs.dll/article?AID=/20060715/NEWS02/607150334
http://www.buildings.com/Articles/detail.asp?ArticleID169
http://www.wlextv.com/Global/story.asp?SH17195
http://www.the-dispatch.com/apps/pbcs.dll/article?AID=/20060714/NEWS/607140333/1005
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sears installs gas water heater for about a 100 bucks locally, might cost a bit more for vent.
your oil guy is a money hungry fellow, look into a new gas furnace and hot water tank
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Stormin Mormon wrote:

Ahh I find it IMPOSSIBLE to believe a coal furnace converted to a oil burner is 80% efficent. When was the conversion done? How many years ago?
Its highly possible the oil guy has a profit interest in you NOT relpacing that furnace:(
I would get a bunch of free estimates just for the heck of it. contact the manufdacturer of the oil conversion burner and ask about efficency of your unit.
your local gas station doesnt want you to buy a 50 MPG vehicle either, if you asked they would likely say your gas piggie is great.........
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I just had someone in from the oil co to give me some additional info. My burner is running at 78.5-80% efficiency. I probably don't need to upgrade the burner right now. Even he admitted that, although the furnace is in good condition, it is using much more oil than it probably should. Replacing the furnace w/ an internal water heater is about $5000 and a furnace with an indirect unit is about $6800. Both numbers are tough to swallow this year. The alternative is to cap the lines to the tankless and install a gas Water heater. According to the gas co, it should cost about $50/ mo to run the HW. On the other hand, according to the oil co, based on a 1200 gal consumpsion, probably 250 gal is HW. so now we are only talking about the difference of $600/yr for gas vs $750/yr for oil. On top of that, it will cost about $700 to install the new heater and cap off the tankless. Then, as a friend of mine reminded me, if the cost of gas continues to rise, the $150/yr difference disappears since the oil is capped at that price.
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Oil price is capped? I've never heard of that and can't prove it by my oil bills. Tell me more.
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Cost effective is a condensing unit of 92%+ effeciency, your best choise may be a Takagi 94% Ng tankless. Do your research.
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Actually, you have a third alternative. Buy the 40 gallon gas water heater, but don't bypass your tankless. Feed the gas heater with the output of the tankless. This will significantly cut down on the gas cost for the water heater during the heating season, yet allow you to turn off the boiler in the summer.
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Peace,
BobJ

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Marilyn & Bob wrote:

dont bother with a tankless, they cost way too much to buy.
i still think you should replace the furnace with a natural gas unit, but if your commited to just the hot water tank go with a 40 gallon natural gas....
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I'm gonna start something....

A customer wanted a new gas WH. I gave her a price of $700.00. She also got a price for a heavily advertised brand of tankless WH of $3,500.00 I don't know the life expectancy of a tankless, but a tank type WH has an average life of 12-15 years. Without looking at the cost of gas and assuming a life of the tank WH's at 12 years, she could buy roughly 5 tank type WH's spanning 60 years.
Gas is the other thing in this equation. The tankless WH's have a minimum flow of about 3/4 GPM to make it come on. That's actually a pretty good flow and if your house has the galvanized pipes that are old and clogging up, you could be on the borderline of minimum flow. The gas valves are modulating for (I think) 20K BTU's to 199K btu's depending on the flow and the tank type (Standard 40 or 50 gallon WH) is close to 40K all the time. Run at full blast, the tankless has a consumption of 40K BTU/hr and the tankless has 199K BTU/hr.
I mentioned life expectancy of the unit earlier. I have no clue how long the tankless will last, but I do know that they have a lot of moving parts and I'm sure these parts ain't cheap to get and install. In 25 years in this industry, I've never replaced anything on a tank type except for T&P valves and thermocouples. IMO, the thermostat design has been around so long that they are nearly bulletproof.
Just some thoughts.....
(Yes Paul, I didn't remove the crossposted header)
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HeatMan wrote:

Tankless sound great till you run the numbers:(
A close cousin is the toyota prius, it costs so much more than a regular vehicle the payback for gas saved exceeds the life expectancy of the vehicle, espically when considering battery bank replacement $$$:(
both of these products were poroduced by marketing companies to maximise profits
I am all for saving energy but big business just looks at bucks of profits
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We were looking at a replacement for the Momma-mobile. She didn't want to look at a sedan because she's ridden 'high' for nearly all her married life so the Pruis was out. We did look at the Ford Explorer(?) hybrid, but 2 things knocked it out. 1) it ran on Battery only up to 25 to 30 MPH, per the sales person. 2) the battery pack would last 70K to 80K miles and we traditionally put 130K to 150K on a vehicle before we move on. $8,000 for a new battery pack ain't cheap and doesn't make much 'fiscal' sense.

money.
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