Thanks, but no tanks

Building code requirements limiting energy and water use and government initiatives encouraging conservation are becoming increasingly important as population growth and electrical consumption increase demand on water and energy supplies.

An on-demand tankless water heater can help.

In years past, most tankless heaters sold here were electric point-of-use units with limited capacity, relegating them to consumer niche markets, such as in-home apartments and vacation homes with low hot water demand. The development of more efficient natural or propane-fired units and the introduction of high-capacity, whole-house gas-condensing units have made tankless a viable alternative.

Tankless units account for 5% to 8% of all water heaters sold. Gas-condensing units — which increase efficiency by using exhaust heat to warm water — account for almost a quarter of the 400,000 tankless units sold in the United States, said Trey Hoffmann, global product manager of Rinnai America in Peachtree City, Ga. The units initially cost more, he added, but their greater efficiency results in lower utility bills.

Milwaukee-based A. O. Smith recently introduced a "hybrid" unit that combines the best features of tankless and conventional technologies to create a new category of water heating. It uses a secondary heat exchanger to route heated exhaust gases back through a "buffer" water tank to extract additional heat. While the hybrid enlarges the unit's installation footprint, the company said it increases the unit's efficiency.

Good news for the category is that the federal energy tax credit program was extended through Dec. 31, 2013, allowing buyers to claim up to $300 for high-efficiency water heating equipment, including tankless units with an Energy Factor of 0.82 or better. Moreover, many local and state utilities offer rebates for homeowners who purchase these appliances.

This story appeared in the digital pages of HCN sister publication Residential Building Products and Technology.

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