Editor's Note: Scientific American's George Musser will be chronicling his experiences installing solar panels in 60-Second Solar. Read his introduction here and see all posts here.

As we continue to wait for our solar paperwork to go through to receive the subsidies and loans, I’ve kept looking for ways to save energy, and I’ve come to a sad realization. It looks like we’ve already done most of the no-brainers. We’ve weatherstripped doors, sealed air leaks, blown in insulation, tweaked our steam heat system, screwed in compact fluorescents and LEDs, and turned our five-year-old daughter into a zealot for turning off lights. Gone are the days when I came home from work only to find every single light in the house turned on.

But the fruit is getting steadily harder to pick, and the household finances are now working against the cause of energy conservation. Our water heater is a good example. We currently have a gas-fired storage water heater. It’s about 15 years old and last week the drain valve sprang a small leak, so I figured this would be the time to replace it with one of the tankless units that conservation advocates wax eloquent about. A tankless unit heats the water only when we actually need it, unlike the storage unit, which maintains a reservoir of hot water (50 gallons, in our case) that has to be continually reheated as heat escapes into the basement and up the chimney. Our family needs hot water only in the mornings and evenings, yet our water heater runs 24/7.

The energy factor—a measure of efficiency—of tankless units is typically 0.85, compared to 0.62 for storage heaters. To sweeten the deal, the state of New Jersey offers $300 rebates for tankless units and the Feds now offer a $1,500 tax credit on this and other energy-saving measures.

So it seems like a open-and-shut case. Yet our plumber tells that half his customers who get tankless water heaters later ask to have them removed. One big disadvantage is that such heaters have not only a maximum flow rate, but also a minimum flow rate. If you just turn on the faucet for a small amount of hot water, the unit won’t fire. When I told this to my wife, I could see my dreams of a tankless unit swish down the drain.

I thought I could talk her around, until I considered the cost. Replacing our storage unit will run about $1,400, whereas a tankless unit would cost twice as much. Even with the rebate, the payback time is measured in decades. About the only financial justification for tankless heaters seems to be the fact they last longer, but that’s too long-term a proposition for me. Consumer Reports reached a similar conclusion last fall.

Never one to be daunted, I began to look for other ways to reduce my water-heating bill, only to be stymied at every turn. A so-called indirect water heater, which would use our main steam-heat system to heat the water, is said to be extremely efficient. But I couldn’t find any data to support this claim, and I stopped looking when I found out that the system is twice as expensive as the tankless unit.

I thought about getting an ultra-high-efficiency storage heater, but began to cough uncontrollably when I saw the price—even higher than the indirect unit. And I looked for a timer for my cheapo storage heater, so that we could shut it off during off-peak hours, yet such timers bizarrely don’t seem to be exist for gas water heaters (even ones with electronic ignition).

About the only useful contraption I could find was a coil that wraps around the water drain to extract some of the waste heat and return it to the water heater. I’ll probably install it, if only to salvage some pride from this whole episode. If anyone has other ideas, I’ll all ears.

I’ve also hit a brick wall on how to save money on space heating. Replacing our boiler with a smaller one would eventually save money, but again it would take a decade to pay off the $5,000+ cost. Retrofitting our steam heat with hot water or air is similarly cost-ineffective. The contractors I talked to said they wouldn’t even give me an estimate for a full retrofit, because they knew I would choke on it.

And so my family finds itself in the same predicament as many around the country. We want to do the right thing, but it just costs too much. I'm just not sure policymakers who want owners of older homes to cut costs are going to get them to do that unless they provide the subsidies that they now provide to solar.

Photo of George’s current water heater