Some people prefer gas water heaters, but when the unit is coming into the house, we have to be concerned with the burner, so most installations indoors choose the electric water heater. You can use a gas water heater if you follow certain precautions.
Homeowners like using natural gas for different reasons. I think that the big positive in having natural gas at home for me is that water heaters and cooking equipment can still work if the electricity goes out. There are situations where builders see installing gas water heaters as problematic. It is not because they do not have the ability; it is because this can take more work, which means a higher building cost. Actually, one of the frequent questions asked at the end of a home inspection is can you run gas lines through a house. Running a gas line is like running a plumbing line, so yes it can be done, but in a finished home this means a little demolition of wall surfaces. If you live in a one story home, you may have a better option: run the line in the attic, then you only need to bring it down to where you need it. This bringing in of a gas line is wanted by homeowners in the kitchen for a gas oven instead of the electric. Most homeowners begin asking about gas lines for water heaters when they are considering a tankless unit.
What if I want a gas water heater in a closet? You may not have a great deal of space for your water heater. Placing it in the garage can be good, when you have an attached garage. If you have a larger utility room, the water heater can go into that room. The attic is also a great choice. The attic in a hot climate like Houston already will heat the water heater up before you have turned on the burner. In some homes, the only option is in a closet. This is often true in condos and town homes, where space is limited. Using a closet space is perfectly acceptable, but the use of gas or any fuel that is going to be burned (liquid petroleum or liquid natural gas come to mind) causes certain issues. When installing an electric water heater, we just need the power supply (both heaters will need drains for the safety pan and temperature-pressure relief valve). With the gas, we need to be concerned with a bit more.
First, I am going to need a vent. Once the gas has been burned, you do not want to breathe the exhaust, so the proper vent to the exterior is needed. (This is why you will not see gas in most condos). After we have the exhaust venting out of the closet and home, we need to think about the air in the space. For any fuel in our appliances to burn, we need air. In this case we call this combustion air (I mention this because you may have someone discuss the combustion air, and all that they mean is the air in the space that will be used by the burner). A closet is not big enough to hold enough air that is required for its burner. Think of it in this way: you have a lit candle sitting on the table, and you place a glass jar over the candle. Maybe there is an ever so slight gap between the jar and the table, but in the end, the lit candle uses up the available oxygen, so it goes out. The closet needs an air supply. The best way to achieve this supply of air is to create an air flow through that space. If you look in the photographs above, you will see that there are two openings. One is down below, closer to the burner compartment. The other is at the top of the closet. With this set up, we bring air through the space. The lower vent has a screen, because we do not want the pilot light to be blown out by a strong gust. The screen diffuses the air direction. Here is the big problem if you are looking at a current set up, and you are wondering if it is correct: the vents are blocked by homeowners, because they want to improve energy efficiency in their homes, and they feel a cold air blow into the house, because of this vent. These vents need to be kept open.
There are other options when installing a furnace in a confined space. I like the idea of direct vent installations. In this scenario, an air inlet brings fresh air to the burner compartment, and the exhaust air is vented out of the building. This method can be more energy efficient in the sense that the homeowner does not need to deal with unconditioned air being brought into a space, which could otherwise effect the home. This direct vent method in fact can have a special vent where inlet air comes through the outer wall of the vent, while the exhaust air travels through the interior of the vent pipe (we are discussing a double walled pipe). The water heater in the photographs was on the second floor of the home, so the vents were not too hard to create. There was no space in the attic due to the roof design, so the closet became the best spot for a gas water heater. They could have installed the water heater in the utility room, which is downstairs in this house, but that would have taken space away from the clothes washing and drying operation.
I was thinking of a gas water heater with a tank when writing this post, but I believe that if people are considering the idea of installing a new gas water heater in their home, and they are looking at a closet, they may be thinking of a tankless unit. The rules mentioned above would be the same. You need air in the closet. The one additional concern with a tankless unit is the size of the gas supply pipe. Tankless units require more fuel to be supplied to its burner to heat up the water than a tank unit needs, but the tankless unit would use less fuel overall. Even though you gain space with a tankless unit, do not consider this closet for storage space. Closets with mechanical equipment should not be used for storage. The stored items can block the vents. Moving material in and out of the closet could damage parts of the equipment. The stored items may be great to burn, causing a fire in the home. I have seen too many problems with homeowners using these closets for extra storage. My favorite was the chemical smell coming from the air conditioning system, because the homeowner was storing cleaning supplies in the section of the closet that was meant to be an air duct for their air conditioning system.
Having a gas furnace or burner in a closet is not too common in the Houston area. You will find them though, so it is good to know what to examine. I am wondering if I will see more tankless units installed in various types of homes. I think in the future that could be a trend, where we would then need to be careful about the installation and the air supply.