Propane is usually higher than electric rates. Your contractor isn’t really making much sense without actual kWh costs to plug in for you.

Electric tankless is easy to build in at the build stage, but it has no real advantage in efficiency over traditional tanked electric. A heat pump electric likely makes the most sense. And heat pump HVAC as well.

I probably relayed the info totally wrong.

Electric here is outrageous though. For comparison, we currently rent a 500sqft house that had electric heating the first two years we were here. Our bills were $530 A MONTH in the winter, in a classified tiny house - horrific.

That far north, heat pumps become more 'problematic' vis a vis efficiency. There are calculators out there to determine relative costs between electric, propane and ng if you know the price for each.

With a guess at your high electric price, stay away from electric tankless.

Of course, it would help to know how many are in the house and how much you use hot water. Single? Married with 5 daughters using long showers every morning? Lots of laundry? etc?

I have propane on demand. I love the endless hot water. I just filled our 500 gal inground tank with $1.51 (US) propane. I fill it about once a year with 400 gal. It also runs the FP and range top. There are 2 of us. Long showers and huge tub.

Only caveat is we didnt do recirc. I dont care but a couple guests complained of no instant hot water. I asked if they had instant hot water with their tanks...crickets...

It sounds to me like your builder is planning to install a forced hot air heating system with a hot water coil in lieu of a direct-fired furnace. Hot water supplied to the coil is produced by a separate hot water heater. This type of system would be more difficult to control with a gas-fired hot water heater than an electric hot water heater.

Choosing the right system for your home requires that you consider the initial cost of the alternative systems, their operating and maintenance costs, and their various life expectancies.

One option to consider is a hybrid system which combines a heat pump (which will provide economic heating in spring and fall and summer air conditioning) with a back up furnace (which will provide heating during the coldest times of the year.)

I suggest you consult with a HERS rater or energy consultant in your area.

You need to post your electric rate and the price you think you will be paying for propane. That will indicate how much it will cost to heat with the heat pump or propane. Owning your own propane tank will get you the lowest price.

Another option is a heat pump with a propane furnace as a the backup. This is known as a dual fuel system.

The tankless hot water system is nice if you have a need for a lot of continuous hot water. In reality it does not save much money in operating costs. It also has to be maintained on a regular basis. If you pay someone to do then it becomes more expensive.

If electricity and propane are both expensive, my first choice would also be a heat pump with propane backup heat. You would run off the very efficient heat pump for moderate temps, and the propane backup would give you what you need to handle the cold winters.

For a water heater I would take a look at the hybrid heat pump HW heaters if you have the space, or get a high efficiency electric. With a standard electric HW heater you can use a timer to limit the number of hours it runs, and add insulation to make it even more efficient at holding hot water. If you are a working couple and the house is empty during the day, you can probably limit the "on" time of an electric hot water heater to about 2 hours in the morning and 2 hours in the evening.

Bruce

Heat pump hot water. Timer matters little. Insulation on the tank holds the heat so shutting the thing off saves pennies. A typical annual standby loss for a modern electric tank is $60 with your rates. A timer would save $5 a year. See the water is 120 when on and would probably drift just down to 116 in 12 hours. The heat lose is only reduced by 10% or so.

Far more important is wall insulation, windows and air sealing. But probably too late on that.

Hybrid (heat pump with gas furnace back up) and dual fuel (gas and electric) systems are the same thing.

Heat pumps have gotten very efficient and work at a lower temperature than in the past. I would have a sit down conversation with my HVAC contractor and my GC. Go over all of the options. For some reason, people don't involve the HVAC contractor in the discussion early in the process. It can save you a lot of money.

Insulation and great windows are passive and will save you money in the long term.

When we lived in upstate NY, we had a oil-fired hydronic heating system. Up north, oil-fired systems are less expensive to operate and have become very efficient. For AC we had central air. The hot water heater was part of this system. As a supplement, we installed a 75-gallon tank of propane to service the stove and fireplace logs.

I love tankless hot water if it's natural gas or propane. I have installed them in a number of my homes. But, these were in the South where natural gas and propane are relatively cheap. This won't be your situation.

I just pulled out an electric tankless in our rental apartment because it was undependable and surged, which is common with the electric models. I replaced it with a standard tank hot water heater. The electric tankless couldn't reliably heat a shower.

Bottom line, talk to the HVAC contractor sooner rather than later. You may even want to talk to more than one.

Lots of good advice here. As a "home performance" contractor, dealing with $ and energy savings with insulation, HVAC, hot water heaters, I have a few considerations.

If you've ever thought about getting solar panels, especially since you think you're in a high electricity cost area, you'll have considerable return-on-investment by going all electric with hot water, and heat pump HVAC, and producing your own electricity to power it.
Pay yourself or pay the propane company.

Never do on-demand electric water heaters. Everyone else here already went into that.

Insist on air sealing the house as well as possible while it gets built. You'll never be able to meaningfully improve the air tightness of the house after the sheetrock is up.

Thanks for everyone's input so far. We haven't actually started the build, but our HERZ rater needs to know what we're going with before we can start. I'll see if he can give us options.

Meeting with our GC tonight and will show him this thread!

FYI - HERS rater.

Definitely spend the money on the envelope. We switched between heat pump and NG on demand after we started - no big deal. The final HERS rating will be based on as-built including a blower door test so it seems strange that they need to know now.

In MA - you should get a price on either double stud wall or external foam. Might want to check on the 10-20-40-60 rule. That would be R40 walls which is the hardest to achieve. Takes a double stud or 3 inches of exterior foam.

You can look at the information for a Rheem hybrid electric water heater on the Home Depot website. I was reading through some owner reviews for the 50 gallon version recently and almost every comment mentioned how impressed the owners were with the energy efficiency of the hybrid (heat pump) style of water heaters. The water heater connects to wifi and provides reporting via an app about how little energy it is using. Most owners liked to be able to see the energy efficient performance on their smart phones and computers via the app.

My Heat Pump Hot Water heater is located in my Basementhere in the MD Suburbs of DC. The unit has no measurable effect on room (basement) temperature. It is about as noisy as my house Heat Pump. It removes maybe 1-2 cups of water from the basement air each day. Not enough to really be effective, but enough to require either a drain or a condensate pump to get rid of the water.

I have not done the math, the COP likey is higher for the Hybrid vs the Split Hybrid - particularly during the cold winter... pumping heat from 10 degrees to 120 degrees.

The only people that talk about cooling the nearby air with a Hybrid Hot Water heater seem to be folks that have never owned and operated one ... just sayin'

I would definitely recommend looking into a hybrid heat pump water heater, and also a cold climate heat pump or dual fuel system (heat pump with propane backup). The hybrid water heater will depend upon what area you have to set it up.

After great agonizing, I decided to use a hybrid hot water heater and cold climate heat pump....only been running the heat pump for two months and the water heater for a couple weeks, so no real world usage reports, but I am hoping I made the right decision LOL!