Summary:

Woodland Water Heater Jacket

Installing insulating water heater jackets in woodland street houses was the EDGE Fund's first project! Jackets were installed in houses over Fall Break 2008. Take a trip down to the basement if you're ever in a Woodland St. house, maybe you'll get lucky and find one! If you do, be sure not to take it off or damage it. And if after seeing one you get an indescribable urge to call your parents back home and talk them into getting one themselves, we can't be held accountable!

Background premise:

Many older (more than seven years) water heaters suffer from significant heat loss if they are not properly insulated.  The U.S. Department of Energy’s, “A Consumer’s Guide to Energy Efficiency and Renewable Energy ” indicates that insulating jackets may reduce water heating costs by 4-9% per year.  This proposal addresses the possibility of installing insulating jackets on water heaters operated by the College.

Cost-benefit estimation:

In order to evaluate the present value of this project we must know the following: the number of houses the college operates with un-insulated water heaters, the cost of purchasing and installing water heater jackets, and the annual savings from the installation of each jacket.

It is not immediately clear how many houses the college operates that have un-insulated water heaters.  There are roughly 20-40 houses that the college operates that have water heaters.  This analysis will describe the results if either 20 or 40 houses are assumed to exist, and it is important to remember that changing the number of houses will have a linear effect on the results.

Water heater jackets are very inexpensive, and range in price between $10 and $20.  Installation is relatively easy, and should take a novice handyman less than an hour.  If the college pays $20 per hour for labor, then the cost of installing a jacket will be between $30 and $40.

The amount of savings per installed jacket is uncertain.  Water heater manufacturers provide information about the average energy costs associated with one years operation of various models.  One such estimate of a 5 gallon tank estimates that annual energy consumption is between 4624 and 5109 kwh per year.  At an average cost of electricity of $0.10/kwh, this means heaters cost between $462.40 and $510.90 per year.  Thus, a 4% to 9% savings would be between $18.50 and $45.98 per year per water heater.  These numbers may be clarified by determining what types of water heaters are in each house, and possibly by any additional information on hot water usage in these houses.

In the worst case scenario using the ranges outlined above, water heater jackets will have a positive net present value after two years, and will yield positive benefits for all years afterwards that the heater remains in operation.  In the worst case scenario, if a discount rate of 10% is used, and if water heaters remain in operation for 10 years, then each jacket will have a net present value of $73.67, so if there are 20 houses, then total net present value will be $1473.40, with a total cost of $800.  In the best case scenario with the same discount rate and lifetime horizon, the net present value per jacket will be $252.53, and with 20 houses the total net present value would be $5050.60 with a total cost of only $600.

Additional benefits:

With regards to the objectives of the EDGE fund to promote campus awareness of issues and activities concerning energy efficiency, this project may not be as attractive as others with more prominently visible implementations.  However, this project is also alluring because its results are relatively reliable, and because it will provide a large positive return without require too large a portion of the total fund.