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I have a hot water heater. Its 30gal tank. 125ft away from my breaker box. will a 20amp breaker with 12-2 wire still good for that distance

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Nope, you'll need 10-2 on a 30A breaker, owing to the 23A of current typical in 30gal water heaters. However voltage drop will be reasonable.

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    One rule of thumb I have heard and follow is for every 100' of circuit length, up the wire size one gauge. This keeps the voltage drop under 5%. The breaker will remain at 30-Amps. – Paul Logan Dec 15 '17 at 5:28
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    @PaulLogan I would make it more like 150-200', and I would base it on your practical everyday loading, certainly not the breaker provisioning. I did run the numbers on Southwire's calc and they were at around 2.5% at 23A which is fine. – Harper Dec 15 '17 at 7:13

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