Is now the time to switch to an electric water heater?

[Kolesar]

There is going to be a significant shortfall of methane/natural-gas this winter as detailed in this article: Daniel Gross, Slate.com. We had been considering replacing our gas hot water tank with a quite more efficient on-demand gas heater. Our installer said that she had had a few problems with the earlier designs and I am not sure it makes sense altogether with respect to financial, cost of ownership, or environmental concerns. There are other alternatives such as installing an electric hot water tank with a timer or an electric on-demand heater. My idea of a seasonal solar pre-heater tank was nixed by her.

We need to eventually do something to replace the hot water heater. The chimney is unlined and since the furnace is now ducted through the wall, there is less draft and hence a long-term problem of condensation on the tile chimney liner.

Our usage is small: both of us commute all day and don't need water midday or after 9pm. The shower has a wand and I don't think it is low-flow. We have a contract for gas for <$10/million cu ft (I recall) but that will end next year. Electricity is a pricey $0.13/kilowatt*hour here. Our region is about 80%/20% coal/nuclear although we technically have a contract with Green Mountain Energy for a “greener” source.

I am sure my cheapest option is to drop in a new electric tank now or when the gas tank fails. We still have the wiring and timer from when the house had an electric tank in the 1980s. I could install it myself. I am just wondering if a case can be made for an on-demand heater using either fuel source. Both have significantly higher initial costs. The information at the gas and electric companies' websites is woefully short of good pricing data to evaluate the choices.