Dear Mr. Nelson:
Thank you for writing back to me. You are going in the right direction in getting away from the 5.5 KW electric heater. They cost a fortune to run. We might be able to use a small heat pump (50,000 BTU's) if the basement is big enough. Then it would dehumidify the basement as it ran. Good if you have water problems down there. The problem is that if the basement doesn't have enough cubic feet it will get too cold in there and the heat pump will freeze up and not heat that well. If that is the case with you then you can always stick the heat pump outside and use it 1/2 the year and the Spapak the rest of the year. You will still probably pay for the heat pump in electrical savings in 4 or 5 years and it will last much longer than your Spapak. I have a very cool heat pump water heater combination made by Rheem. I just got them in. They work great in basements and heat you domestic hot water for much less then element heat or propane. Less than natural gas too but not as much. I am thinking of putting in on my house. Here is a link to it.
I hope that helps.