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.

dreamgarden, I think you fell for a line of BS. Yes, the standards are going up in 2015. The minimum EF for a 40 gal gas tank water heater will be 0.62 (up from 0.59) A quick check at Lowes and we see that 50 gal gas EF 0.67 (exceeds proposed standards) for $569 Since it doesn't require any exotic anything to hit the 0.62 rating except a little more insulation, we will see 40 gal heaters in $400 range or less - just as the 0.59 standard are now. Personally, I think all tank heaters should have a minimum EF of .82 It's absolutely ridiculous that we would install a gas appliance where almost 40 cents of every dollar spent on fuel is wasted.

Argh -- I was hoping that a power vent of the exhaust gas would be sufficient to solve the problem, and that I wouldn't necessarily need a direct vent of outside air for combustion. Just having a power vent of the exhaust gas would be easy to retrofit into our system, and as a big added bonus, the power vent systems seem to be incredibly energy efficient. Having a direct vent for the combustion from outside air would be more difficult to retrofit in, and such systems for whatever reason don't seem to have as high energy factors as the power vent-only designs do. I'm thinking that perhaps I may just permanently disable the exhaust fan. The exhaust fan helps in late spring early fall when the outside temp in Phoenix swings from high to low greatly overnight. In the summer time, it doesn't help that much, since the outside temp stays hot all the time. I already have radiant insulation on the inside of the garage door (we're south facing), which has greatly assisted in rejecting heat from being soaked into the garage. Alternatively, I may look into solving the negative pressure situation. Presumably, I could cut more holes into the walls of the garage, and then verify that the exhaust gases are not being sucked out of the flue. I'm thinking I may just be on the threshold of the negative pressure situation, insofar as the problem does not occur all the time. On the flip side, I don't really want to start cutting holes into the walls of the garage willy nilly unless I know it's going to solve the problem.

Larsi is right. When you're on that front load learning curve, experimenting with all the new knowledge and toys, I doubt that there is much saving. I learned new ways to make our laundry better and fixed everything that wasn't the"new clean" Later the water usage did go down when I didn't "need" to wash those sparkling clothes. How does your water authority measure consumption. Do you have a "seasonal adjustment" that's factored in in addition to your actual consumption. Is there a "consumption tax" addition if you use water during a peak period. I found those little "hidden" use expanders by going to water authority. They weren't happy with all my questions, but were required to respond. We use "gallons consumed" without including the "sewer adjustment" add in or the peak rate penalty. Found that actual gallons consumed during comparable time periods were about 10-15% less once the euphoria of front load laundry subsided. Its a wonderful learning area, you should enjoy it!