For homes that use 41 gallons or less of hot water daily, demand water heaters can be 24%–34% more energy efficient than conventional storage tank water heaters. They can be 8%–14% more energy efficient for homes that use a lot of hot water—around 86 gallons per day. You can achieve even greater energy savings of 27%–50% if you install a demand water heater at each hot water outlet.
Selecting a Demand Water Heating Device
Demand water heaters cost more than conventional storage water heaters. However, you may find that a demand water heater may have lower operating and energy costs, which could offset its higher purchase price.
Tank less Coil and Indirect Water Heating Units
Tankless coil and indirect water heaters use a home's space heating system to heat water. They're part of what's called integrated or combination water and space heating systems.
How They Work
A tank less coil water heater uses a heating coil or heat exchanger installed in a main furnace or boiler. Whenever a hot water faucet is turned on, the water flows through the heat exchanger.
These water heaters provide hot water on demand without a tank, like a demand water heater, but because they rely on the furnace or boiler to heat the water directly, tank less coil water heaters work most efficiently during cold months when the heating system is used regularly. That's why they can be an inefficient choice for many homes, especially for those in warmer climates.
Indirect Water Heating Units
Indirect water heaters offer a more efficient choice for most homes, even though they require a storage tank. An indirect water heater uses the main furnace or boiler to heat a fluid that's circulated through a heat exchanger in the storage tank.
The energy stored by the water tank allows the furnace to turn off and on less often, which saves energy. Therefore, an indirect water heater is used with a high-efficiency boiler and well-insulated tank can be the least expensive means of providing hot water.
Indirect systems can be fired by gas, oil, propane, electric, solar energy, or a combination of any of these. Tankless systems are typically electric or gas-fired. Also, these integrated or combination water heating systems not only can work with forced air systems but also with hydronic or radiant floor heating systems.
Selecting a Combination Water and Space Heating System
Integrated or combination water and space heating systems usually cost more than a separate water heater and furnace or boiler, but installation and maintenance costs may be less. For example, you won't need multiple utility hook-ups since there's one source of heat. There also aren't as many moving parts to maintain or service. Some of these high efficiency systems may also provide you with lower utility costs.
Most combination water and space heating systems are usually designed for new construction. However, there are some retrofit units available that can work with an existing water heater.
When selecting a system, you need to consider its size. The sizing of a combination system involves some different calculations than those used for sizing a separate water heating or space heating system. It's best left to a qualified plumbing and heating contractor.