Just to be sure--have you checked to be sure that your replacement water heater has to meet a revised code? That seems a bit unusual.
In the house I am working on now, I wanted to replace the electric water heater with a gas one, and save DD about $150/year in utilities bills. I found a safe way to route the flue and gas lines, and when I had the roof replaced I put the boot in place for the vent. Then I had the plumber out to get a price for some other work, he told me I couldn't put a gas water heater there. It is under a staircase, and gas water heaters are no longer allowed under staircases due to fire egress concerns. Seems a bit over the top to me (this is a two story house with other means of egress, I don't think gas WHs are nearly the fire threat of some other appliances (e.g.
any clothes dryer)), but that's the new code. So, now I have an extra hole in my roof for a gas WH flue that I can't install.
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But, if I had a gas water heater there
already, I could replace it with another gas WH (per my county building inspector), the rule just prohibits new installations of gas water heaters under staircases.