You should check either with your local gas company or with your Town to find out about building codes, and to make sure you are not in violation. You probably need a new water heater. The useful life of these things is 20 years the most. They usually quit very suddenly and leave a big flood. You should consider yourself lucky that yours is "warning" you that it's time to replace it. The new gas heaters and water heaters are much more efficient than the old ones. Your gas bills will be lower. And, because of their higher efficiency, they emit less smoke. Therefore, even if your chimney is too small for your currect system, it may be fine for a new one. But you do need to get impartial assessment from either the gas company and/or your local municipality. Your system may have been approved according to codes that were used when the chimney was build years ago. But it may now be a violation because codes may have been updated. In that case, your system may be okay if there is a "grandfather" provision that avoids forcing all homeowners to update their systems.

joshct, Unfortunately with a condensing boiler, it runs most efficiently at lower temps (about 120 degrees) when it condenses the flue gasses it is wringing out as much heat as possible. At higher temps the flue gasses will not condense. To get 120 degree water for your shower, you should have a separate instantaneous or storage water heater. As for the wait for HW, there are recirc pumps you can get, but to be satisfied with this setup, you need to run an additional recirc line (1/2" or 3/4") from the farthest HW run back to the cold water inlet of the water heater. This will continuously (or timer model) recirculate HW through the run and back to the water heater eliminating the wait. Hope this helps, Dan

Natural gas tank heaters are still very common and cheap. LP gas tank heaters are perhaps less common. LP gas is probably the most expensive fuel out there (your situation may vary). It's reasonable that if people are using LP gas they are going tankless. Hybrid electric should be in the mix as Stax points out. It's generally the least expensive way to heat water if there is a space around the heater for heat exchange.

There is some additional work to do a gas to electric conversion: 1. Capping the gas line 2. Capping the vent 3. Running the electric circuit 4. Slightly different plumbing - the inlet is usually low on hybrid heaters, for example. 5. Hybrid heaters are heavier - more difficult to get into a basement than gas. The only one of these things that is significant is the 30 amp / 240 volt circuit. Note: Gas water heaters in older homes were located near the flue so they could vent. That vent was usually a separate flue - but still part of the fireplace. The fireplace is located in the living room - which is generally NOT where hot water is being used. Once untethered from the flue, consider if you can relocate the water heater closer to where hot water is actually being used. When I've relocated my water heaters, it's been part of a replumb on a 100 year old house and I was able to get the heater much closer to the points of use. What's more, changing the furnace to a condensing type that vents with PVC can trigger the need to line a masonry chimney to vent a standard atmospheric water heater. The point being is that for older homes with masonry flues, changing out the water heater to something that doesn't vent using the flue is part of a plan that includes eventually modernizing the furnace as well. In my homes, I've installed a gas tankless heater to avoid having to line the flue. In the future it would be a hybrid electric. Avoiding the cost of lining the masonry flue changes the economics of converting to a different type of water heater. Do not go with a standard resistance electric water heater though. Labor rates vary by market, but assuming that you don't relocate the heater I think there's price gouging, frankly. It's still "exotic" for many installers who have been very used to a very fast and easy "exact replacement". I don't know your location, but you may be able to find a skilled handyperson who can do this work. I think you are being smart about this and coming up with a replacement plan for major appliances instead of just stumbling through. And although I applaud you for being proactive on your heater replacement, I also think you do have time to do it on better terms. The cost for plumbers is unreasonable right now in many areas. You can wait a year (or two) until things settle down. There may also be additional incentives in the recent energy bill. Just a note: There really are some additional costs and considerations for a homeowner to making some of these conversions. You really want an outline of a plan, understand how projects are related, and do some of the work proactively. Also look for rebates and incentives. The only time most of these make sense is when you are replacing an existing unit that's end-of-life. But waiting until your furnace or water heater goes out isn't the time to redesign your plumbing, for example. Not planning ahead or working proactively insures that you will do the expedient thing to get the immediate problem resolved and miss the opportunity to reduce energy usage for another 12-20 years. For example, I just wired my detached garage for a class II charger. It was about $700 in materials with me doing the work myself. The actual charger will be another $800 - 1000. But I ran the circuit now because I plan to build a patio that would have made trenching a line much more difficult and expensive. Even if I don't get an electric vehicle, having it prewired will be a selling point. It's good to make a plan on some of these things so you can incorporate them into other projects.