Homeowners tapping super-efficient water heaters to save money

Eric Stahl
Eric Stahl in his Eagan, Minn., home on February 3, 2011. Stahl has a 105-gallon Marathon water heater in his basement. He gets a 50-percent discount on the electricity it takes to heat water overnight for his family of five. He says it will take him only three years to pay for an investment that included an upgraded furnace. He says the only change his family has made is using cold water to wash clothes.
MPR Photo/Nikki Tundel

In a cozy basement in the Twin Cities suburb of Eagan, Eric Stahl is very excited about his water heater.

Stahl recently replaced his old leaking water heater with a 106-gallon Marathon heater and he is amazed at how much his water bills have gone down.

"I love it," he said. "I look forward to getting my electric bill every month, just to see the savings."

Stahl is among tens of thousands of homeowners in Minnesota who are saving money and electricity by using super-efficient water heaters that can be heated at night and provide hot water all day.

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Stahl gets his electricity from Farmington-based Dakota Electric, one of 44 co-ops that provide power in Minnesota.

Like many electric co-ops in the upper Midwest, Dakota has been working hard to help their customers use energy more efficiently.

That saves customers like Stahl money, and it also helps the utility avoid having to build new power plants.

Electricity use peaks in the afternoon and evening, when everyone is home, fixing dinner, washing the dishes, and watching TV. When we go to bed, the demand for electricity drops like a rock.

Marathon water heaters
Marathon water heaters roll off the assembly line at Water Heater Innovations in Eagan, Minn., on February 3, 2011. The plastic tanks, wrapped in Fiberglas, will slide into jackets, lined up behind them. Workers will fill the three-inch gap with high-tech foam insulation. They're designed to hold hot water for 24-hours.
MPR Photo/Nikki Tundel

"If we can move loads off peak, if we back down the generators and the wind is still blowing, we need to do something with that wind energy," said Michael Hoy, who directs energy and member services at Dakota Electric. "Dropping it into electric water heaters is a fantastic option."

The utility controls water heaters like Stahl's with a pager signal that allows only allows the heating element to turn on at night. But the tank is so big, and so well insulated, it will hold all the hot water the family needs for the next day.

Dakota Electric charges less than half the usual price to its customers who invest in these high-efficiency water heaters. They cost about $800, but the cheap electricity helps homeowners pay it off quickly.

In Minnesota, 70,000 have made the investment.

Three companies in the United States make these very efficient heaters. One of them is Water Heater Innovations in Eagan.

The company, a division of Rheem, designed the super-efficient tanks specifically to help utilities shave their peak demands, General Manager Jeff Scholten said.

Jeff Scholten
Water Heater Innovations plant manager Jeff Scholten shows how the Marathon water heater works displays the inside of one of his company's water heaters at the office in Eagan, Minn., on February 3, 2011. The three inches of foam insulation surrounding a plastic tank will keep water warm for up to a week, he says. The tanks are more expensive than standard water heaters, but they come with a lifetime warranty against leaks.
MPR Photo/Nikki Tundel

"Our water heater will keep water hot for very long periods of time so you don't have to heat and re-heat it," Scholten said. "We have stories here in Minnesota where people have cottages and cabins up north, and when they leave they will turn the power off, and they can come back a week later and still have warm or hot water."

The company also guarantees the plastic tanks will never leak.

But federal officials are setting stricter standards for large-capacity water heaters. In four years they'll have to be more efficient than they are now.

Water Heater Innovations is developing a product that will meet the new federal guidelines. It will incorporate a heat pump that takes air from the house, compresses it, and uses it to heat the water.

But some utilities are worried that a higher price tag could discourage buyers, and they wonder how well the heat pump version would work in Minnesota basements.

They're testing some models now.