Standard tank-style water heaters typically deliver about a decade of service in most Indianapolis homes.
That’s why longtime homeowners are accustomed to swapping out a failing water heater for a brand-new
one every 10 to 12 years. But these days, the price tag for those replacement waters seems to have gone
through the roof. What cost a few hundred dollars just a decade ago will normally cost into the thousands
today. There’s no single reason for the jump in price. In fact, it’s caused by a variety of factors.
Your friends, the government
Water heater manufacturers have become very good at meeting government regulations. They’ve had to,
because Congress created higher energy efficiency mandates for water heaters and other appliances.
(Fortunately, they also created tax credits and other incentives to encourage homeowners to buy more
energy-efficient models.) That meant manufacturers had to figure out how to get that kind of efficiency
out of something as basic as a standard water heater. So they fine-tuned heating elements, added
insulation, and replaced mechanical thermostats with digital controls. All big improvements, all adding to
the cost to make them.
Have you heard of inflation?
Groaning at your utility bills and afraid to walk into the supermarket? We get you. Inflation and other
economic factors like low unemployment mean manufacturers have to pay higher wages. They already
pay a small fortune for the energy to run their production lines, so imagine how much their bills are
climbing. They have to build all those extra costs and impacts into their prices while keeping the business
profitable.
Material costs have skyrocketed
Probably the biggest single impact in recent years has been the steep jumps in the price of the raw
materials that go into water heaters. To make a water heater, you need steel, aluminum, and copper — and
you’ve probably heard how those costs have soared in recent years. Commodity prices are more volatile
than ever, so manufacturers have to deal with unpredictability and limited sources for the raw materials
they need to keep their factories open and producing.
Demand has remained strong
Okay, the housing market doesn’t seem to be healthy right now, but higher loan rates aren’t going to last
forever. Keep in mind that since the economy recovered from the 2008 Great Recession, the trend has
been consistently larger growth in housing prices. The lack of housing supply in many markets at a time
of strong demand has driven home prices to extraordinarily high levels. When homes and other housing
units are being built, there’s more demand for nice, shiny water heaters.
Water heater supplies can be tight
Strong demand combined with a limited supply does what to prices? That’s exactly the environment right
now. The demand is a manufacturer’s dream, but there’s an accompanying nightmare. That would be the
current state of the global supply chain. As in many industries, the pandemic exposed the vulnerabilities
in how we do business. Stronger demand has multiplied the impacts (and costs) of shortages and delays. It
has also forced manufacturers to take a closer look at how (and where) they source parts and raw
materials. And, to nobody’s surprise, that just drives prices even higher.
Where can I find more expert advice?
If you have questions about extending the life of your water heater or are thinking it’s time to consider a
replacement, you’ll find the information and advice you need from a name your neighbors have trusted
for years: Johnson Comfort. They’ll talk with you about your home and listen to your unique challenges
before recommending the water heater that will best meet your family’s needs. Why not call them today?
