Amy,

I would ask option #3 in the "Electrical Wiring" forum on the details about that move, I believe this would be the best option, shouldn't cost too much and it sounds like it could be a code violation as-is. But you would still have to add the water heater replacement and if you replaced the water heater in the same spot using an electric tank water heater, this would be the least costly option. 50 gallons sounds big, usually a 40 gallon for 2-3 people is normal.

Hope this helps,

Dan

1. who told you it was too close? And how close is too close?
2. does the utility closet have an outside wall?
3. how would you ventilate a gas unit?

Mine electric unit is about 12-18 inches from my panel. I've never considered it to be 'too close'. And if it were too close, it would have never passed inspection.

1. In the process of getting a bid for a new gas furnace, the tech called the city inspector and said they want to see 30 inches between the panel and the tank and 36 inches in front of it unobstructed. This closet is fairly small and there's maybe 12 inches in between. I've been told the code has been on the books for years and was never enforced until recently.
2. Closet has no outside wall.
3. Gas would be vented straight out through the roof.

amyspaetzle i have a 60 gallon electric tank underneath an electric panel, and loads of space. They have never said anything was too close. Ignore them. Or, get a 40 gallon electric tank, raise the temperature and add a tempering valve to mix hot water with some cold to make it cooler when it comes out the tap.

The NEC specifies the required clear space for access to electrical panels. Those specifications will certainly apply to new construction. Generally residences will require 3' of clear distance from the front of the panel and 6 1/2 feet of vertical distance. I interpret these spaces as being for people to be able to work on the equipment. Clearance to the sides for other equipment require that any covers or doors be able to be opened at least 90 deg. Exceptions are listed for some existing installations. Inspectors sometimes present their personal preferences as being required-- and as a practical matter, one might be well advised to comply.

The NEC calls out 30 inches wide, 36 inched deep and 6.5 ft for the 'working space' in front of the panel (think about as big as a refrigerator).

The panel does NOT have to be centered in the space under the NEC.

There is no separation called out from other equipment, just the working space clear of anything not flush on the wall.

Ask the AHJ for a detailed citation of the requirements they are trying to impose.

Yeah, brickeyee has a nice way of getting pressure to apply on the guy without getting all discuss-ey and argument-y.

Resist.

This is not new construction. This is replacing an existing tank. No inspection required.

Switching to gas will be expensive, running a new line from the street and then through the house, then running a vent flue from the tank to the roof. However, much of this cost would also be involved with installing a new gas furnace.