Currently we have a failing propane 40 gallon tank (bad control/leaks a bit) in our basement. It does not meet the HW needs for a family of 4 given our schedules.
I have been weighing options on best next move.

1) Larger Propane Tank (low initial install cost/higher energy consumption currently $1200/yr)
2) Tankless Inline Propane Water Heater ($$$$ and have to upgrade the line to piping, not sure we will realize any savings as savings seems to when water not used not on)
3) Indirect off an older Well McClain B-66HE Oil Fired boiler that is reliable and currently using 800 gallons/year for a 100+yr old home in New England. Pro's long life and no(extra) maintenance. Cons firing an older boiler in the summer.

Indirect and In-Line tankless cost the same installed.

Is option 3 a viable option to do on a older boiler running very well I am guessing from late 70's?

 

I don't see a problem with the indirect on the boiler. I'm sure that boiler is a good size as far as BTU's and will give you faster recovery times on the indirect than you had on the propane heated tank. You will also be able to use it with a new boiler should you replace what you have.

 

As long as oil is available you might want to look into an oil-fired water heater. Cost will be higher than a propane-fired water heater but less than either a tankless or an indirect. Oil-fired water heaters have very fast recovery times, almost impossible to run out of hot water. Biggest downside is that your present chimney may not be able to handle a second oil-burning appliance.

 

1200 a year just to heat the water? really? yikes! why? seriously, is propane that expensive? That's a hundred a month... I bet even a 50 gallon electric would cut that in half.

 

Sounds like he lives in a house full of women.

 

An electric water heater takes a lot longer to heat a given amount of water. If you need a 50 gallon gas or oil heater, chances are you would need an 80 gallon electric.

 

True that Allan, but still, I would bet one could run even an 80 gall for less than $100 / mo... just sayin'

 

Depends upon the cost of electricity, the incoming water temperature, the outgoing water temperature and the total amount of water being used.

It takes one BTU to heat one pound of water one degree Fahrenheit. Electric water heaters are the most efficient method of heating water BUT the "fuel" in most cases is also the most expensive available. In my area where electricity is below the national average in cost and natural gas is above the national average in cost it is less expensive to use natural gas to heat water even considering the considerably lower efficiency of a tank-type gas-fired water heater.

 

But still... $100 a month to heat water? Propane must be WAY expensive where he is. My 40 gall electric eats about $35 in electrons a month and them electrons ain't cheap here. My incoming water is pretty cold too, 57°F year round. Yeah, family of only 2 versus 4 but I still can't get my head around why LP is costing $100 / month, which was the point of my comment. Is LP REALLY that much more expensive than other fuels? or is there something bad wrong with OP's existing water heater?

While OP hasn't returned apparently, only droop has ventured an opinion as to his original question...

 

Propane is a byproduct of the refining of crude petroleum. As such the price of propane is tied pretty closely to the price of crude petroleum or, if you will, to gasoline. I think I saw propane advertised at $3.75 a gallon the other day but it could have been $4.75. It also depends on how and where he gets his propane. 100 pound (25 gallon) cylinders would probably have a higher per-gallon cost to fill than if he had a 1,000 gallon bulk tank and was buying 800 gallons at a crack.

Back when I had a propane fueled truck the cost of propane motor fuel was about a buck less than propane for heating purposes. I didn't understand why since it all came out of the same bulk tank so I asked the owner and he said it was volume, he sold a lot more motor fuel and each sale was for a larger amount than filling barbecue tanks.

I do find it strange that the OP has an oil-fired heating system but a propane water heater. Oil heat and natural gas water heaters were not uncommon many years ago because the gas piping in the older cities were originally for lighting and subsequently for domestic water heating and couldn't supply enough volume for heating systems. Those areas that didn't have piped gas usually had (have) either oil or propane for heating and hot water but rarely are both fuels used in a single home except that propane MAY be installed just for cooking appliances and maybe a clothes dryer.

As for why this particular installation uses so much propane it could be as Droop suggested, that there are a lot of showers and/or baths being taken or it could be that the water heater is all fouled with soot on the fire side or a ton of scale on the water side.

 

Woohoo! Do I win a prize? It's costing me about $26 a month in natural gas to make hot water, cook, and dry clothes with. My brother makes hot water with LP using a tankless heater. If he was spending $100 a month to make hot water, I would have heard about it already. $1200 a year is a good chunk of what I spend to heat my home. Either something is wrong with his hot water heater, or his math.

 

I don't know what it is costing me for just water heating since I have only experienced two consecutive days when I didn't have to use my furnace so far this year.

BUT, using my figure of $3.75 a gallon for propane $100 would buy a bit over 26-1/2 gallons of propane. Using 120,000 BTUs per gallon (I think it is closer to 108,000 but I'm too lazy to look it up) and 80% conversion efficiency give approximately 2.56 million BTUs to heat the water. Assuming the incoming water is 50 degrees and the outgoing water is 120 degrees we have a 70 degree rise which requires 70 BTUs per pound of water or about 583 BTUs per gallon. So, 2.56 million BTUs will heat approximately 4,390 gallons of water. Divide that by 30 (days in a month) and we get a daily hot water consumption of about 146 gallons.

Depending on the size of the family, the amount of clothes washing done with hot water, the number of showers and baths taken, the lengths of the showers, the flow rate of the shower head and any other uses of hot water such as dish washing 146 gallons a day may not be excessive. Remember also that my calculations were assuming incoming water temperatures that may be higher than exists in the original poster's home, my guesstimate for the BTUs available for actually heating the water is probably high and that we haven't a clue to how high the water is heated OR how much is used and to me it seems that $100 a month may very well be the cost of the OP's water heating.

 

It's 91,330 BTU per gallon. Using that number I get about 138 gallons per day which I don't think is very much for a family of 4. My wife and I use about 50 gallons a day each. I supposed if you have little ones, they don't use as much as a teenager taking showers. Wow man. That's a lot of cash for hot water.

Check out Wholesale Propane Prices | Propane Prices for wholesale propane prices. Here in NJ, it was $3.91 per gallon wholesale in March.

 

Just realized that 138 gallons of 100% hot water. So if the 4 people use 50 gallons per day each, that's 200 gallons total per day. I would expect hot water usage to be less than 50% of the total. So I think 138 gallons of hot is a lot. Talked to my brother about what he pays for propane. He says its about $20 a month for both the tankless and his clothes dryer. He refills every 2 1/2 years so that number is based on a lower price for propane.