You should really post on the plumbing forum.

I'm no expert but I believe the furnace and water heater are independent. You shouldn't need to replace the water heater unless it's leaking or it's old and you expect it to leak in the near future.. If the furnace guy needs to finish venting the furnace to prevent CO issues, that should be independent of the water heater.

i agree post in plumbing, but if you want to be more efficient you would want to go tankless, they don't burn fuel all of the time like a normal tank water heater does.

Tank water heaters don't "burn fuel all of the time." The gas burner (or heating elements if electric) operates only as needed to maintain the target temperature. The tank is insulated to help retain the heat. Better, more efficient tank units have more/better insulation around the tank.

Retrofitting a tankless water heater to an existing tank system can be tricky. Tankless units require a large-capacity gas line (or electric circuit), upgrading the supply line is typically required ... and sometimes the line feeding into the house from the meter may also need upgrading.

amykas: "I am very concerned about climate change. Would like to upgrade house to use less carbon energy."
Now the big decision about which water heater is becoming difficult. . . . Our furnace and water heater are in basement."

You are a good citizen to consider the environmental impact; hats off to you.

Our furnace and water heater, like yours, are in the basement. When we looked into the same issue just a few years ago, we determined that (at least at that time) the most energy-conserving solution would be a hybrid system:

The drawback of on-demand water heaters is the instantaneous energy demands necessary to effect a large temperature delta in water flowing through a pipe: the more water that flows, and the colder the water is when it enters the heating system, the greater the energy must be to heat it to the 120 degrees F. plus you want for your washing machine and showers and baths.

Therefore, if the water from the street could be preheated to reduce the delta to the desired end temperature, the required capacity of the on-demand heater could be reduced significantly. To accomplish that one could install a solar panel on the roof connected to a large well insulated warm water storage tank in the basement. The function of the solar panel would be to raise the water temperature from utility line temperature -- about 51 degrees F. here -- to barely lukewarm, in the 80 degrees F. range. That, alone, would reduce the instantaneous demand on a single large on-demand water heater significantly.

In addition, such an arrangement would allow placement of several smaller on-demand heaters near to the demand faucets, similar to the zone heating system that you have adopted with your furnace. Each smaller on-demand heater would see less instantaneous flow than a housewide on-demand water heater would see, and less heat would be lost in the short distribution lines between the small heaters and the faucets,

In the end, due to cost constraints, we ended up with a more conventional arrangement (that still strikes some of our friends as odd) of an oil-fired (Bock) water heater and a gas-fired (Coleman modulating) furnace. Because the oil burner can generate a lot of heat in a hurry, a 30 gallon Bock water heater is more than sufficient to guarantee "unlimited" hot water: even if we fill a bathtub while the dishwasher is in mid-cycle, we have ample water at the tap, and when we have family here taking successive baths, each with a fresh fill of the bathtub, the last bath is as hot as the first one.

FWIW, the Bock water heater is energy source agnostic. If oil prices continue to rise relative to natural gas, we can switch out the burner in the water heater to a gas burner at any time.

We replaced our propane hot water heater with a Stiebel Eltron tankless a couple of years ago. As we are on a pump (and our ground water is very cold) I also replaced the water pressure tank with a much larger one to warm most of the water to basement temperature before going to the heater. Our cost of heating water (a very rough but highly available indicator of energy consumed) has gone down substantially. I hasten to add this is a home of two people with limited needs. I think the results would vary widely depending on demand.

This year we replaced the in-floor heat boiler with a Viessman Vitodens 100 that can also supply on-demand domestic hot water. Had we known that was going to happen we would have just gone with the one unit.

Bottom line is we are very happy with both. They suit our needs perfectly.

Some good info above;

While it may never pay for itself, one of the next water heaters that I am looking at is the Rheem RHE50. There is more to my plan than just saving money and efficiency; one of the reasons I am looking at this is that I would like to block of my old exhaust vent that goes though the roof. Since my furnace upgrade, only the hot water tank makes use of this vent. A few (very few) of the new water heaters like the one above are a condensing version. This is much like the new HE furnaces, that both pull and exhaust air directly from the outside.

By eliminating the vent stack, I now have much less chance of a CO poisoning due to back drafting. There is a lot of info here on venting, and MUA (Make Up Air) due to venting large semi-professional ranges. I believe that the ultimate fix to is is to limit the items in the house that can provide CO back drafting. I don't have a fireplace, but that is another possible cause of above.

Are these new hot water tanks efficient? Yes. Can you still fill up a large spa with them; Yes. Can you have almost endless flowing hot water; Yes again.

Why are there not more of these out there? Well Bradford White had one; so does AO Smith along withe Rheem above. All the major players know that this is where hot water tanks are going. So whats the downside? How new technology is and the cost. Cost is higher than any other residential hot water tank, and since they are more complex than your standard gas fired tank, they may be more prone to repair. Non HE furnaces used to be very simple also; and look where they went.

It's only a matter of time before these new hot water tanks become popular. They install in the same location as your current hot water tank. They use the same gas line; so no big rework there like is needed for instant hot water.

The venting is different but no more different than a HE furnace, so there are many contractors that know how to install those.

This is a leading edge product, but since you wanted to be efficient you might want to check them out.

This post was edited by black88mx6 on Sat, Dec 14, 13 at 20:08

Amykas:

As a reference point the price of a 50 gal. power vent gas water heater from Sears is ~$870 online. The energy factor of that model is 0.70. The energy factor of the model you cited is 0.59, I think. So the higher efficiency version would be almost 20% more efficient. I'm not sure if there are differences in installation cost or reliability in this comparison.

Solar water heat was supposedly the only truly economical use of solar, though with very low cost of natural gas that may no longer be true. Tankless is neat, but as these often require gas line upgrades the installation can be too expensive to be economical. (I'm not a plumber but explored tankless for my own home & was informed by multiple plumbers of their opinions on tankless.)

If you don't already have one inexpensive CO/Nat Gas detectors can be purchased at most hardware stores or online. These are similar to a smoke detector; it will sound an alarm if unsafe levels of poison gases are detected in your home.

Good luck.

The Rheem RHE50 has an energy factor of .82 one of the highest on the market and on par with most tank-less.

This post was edited by black88mx6 on Sat, Dec 14, 13 at 23:27

Generally, excluding items priced for exclusivity, the cost of an item is its energy cost, whether the energy is derived from one source or another (including the energy that was expended to produce the wealth that provided subsidy funding). The on-going operational cost is another cost of energy. The sum of these over some period that one might call the lifetime of the object is the total energy cost excluding the cost of disposal.

If the total energy cost over its anticipated lifetime divided by the lifetime is predicted to be less than what one is presently spending, then energy saving will eventually occur. The saving may be in natural gas, electricity, or the cost of building solar cells. In a free market, these would all move toward equal delivered energy cost, and one could then select among secondary factors such as whether one prefers fracking, or generating really noxious chemicals used in semiconductor fab, or some other issue difficult to pin down the true cost for.

kas