Domestic Hot Water: No Perfect Solution

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Domestic Hot Water: No Perfect Solution

Gas or electric? Tank-style or tankless? It’s complicated.

Posted on May 13 2016 by Martin Holladay

Some questions are easier to answer than others. For example, there is a fairly straightforward answer to, “How should I insulate the floor of my unconditioned attic?” — namely, “With a deep layer of cellulose.” (There’s more to say on the topic, of course — but even a full answer isn’t very complicated.)

There is no easy answer, however, to, “How should I heat my domestic hot water?” Every type of water heating technology is flawed; every solution involves compromise.

Many factors affect the decision about what type of water heater to choose, including:

  • Do you have a big family or small family? (The most efficient water heaters are usually expensive. Big families find it easier to justify high equipment costs, because annual energy savings are proportional to hot water usage rates.)
  • Does your house now have, or will your house soon have, a photovoltaic(PV) Generation of electricity directly from sunlight. A photovoltaic cell has no moving parts; electrons are energized by sunlight and result in current flow. (PVPhotovoltaics. Generation of electricity directly from sunlight. A photovoltaic (PV) cell has no moving parts; electrons are energized by sunlight and result in current flow.) system? (An all-electric approach makes more sense for homes with PV than homes without PV.)
  • Is natural gas available at this site? (Natural gas is the cheapest available fuel, but that fact doesn’t help those without access to natural gas.)
  • Are you in a warm climate or a cold climate? (A heat-pump water heaterAn appliance that uses an air-source heat pump to heat domestic hot water. Most heat-pump water heaters include an insulated tank equipped with an electric resistance element to provide backup heat whenever hot water demand exceeds the capacity of the heat pump. Since heat-pump water heaters extract heat from the air, they lower the temperature and humidity of the room in which they are installed. makes more sense in a warm climate than in a cold climate.)
  • Is your house cramped? (If your house is tiny, you may prefer to install a tankless water heater, and it's unlikely that you will want a heat-pump water heater, which usually requires either a high-ceilinged basement or a fairly large mechanical room.)

The all-electric house

If your house has an unshaded south-facing roof, or a generously sized yard with room for a ground-mounted PV array, it's a good guess that your house will eventually be equipped with a solar electric system — especially if your local utility offers favorable net-metering contracts to customers with PV systems. Since PV costs keep dropping, it's hard to imagine that PV won't play a significant role in our energy future.

As PV systems become increasingly common, energy experts predict that most U.S. homes will eventually be all-electric. Since burning fossil fuels contributes to global warming, environmentalists have been among the first to embrace the all-electric ideal.

In many states, net-metering contracts wipe out a customer's electricity credits at the end of the year. That means that PV system owners who produce more electricity than they use are forced to donate their extra electricity to the grid. Instead of giving their electricity away, homeowners with large PV systems often swap their gas-fired water heater for an electric water heater. After all, for anyone who is subject to a “use it or lose it” net-metering contract, it makes economic sense to use all of the electricity one produces.

Because of all of these factors, I'm in favor of electric water heaters. If you live in a house that has room for a heat-pump water heater, that's what you should install. (Heat-pump water heaters use about half the energy of electric-resistance water heaters.)

If your house is cramped, you'll probably end up with an electric-resistance water heater — either a traditional tank-style water heater, or several point-of-use heaters in various locations around your house.

Using an electric-resistance water heater isn't as crazy as it sounds. If you are willing to install a few extra PV modules on your roof, you'll end up with an affordable, mechanically simple, low-maintenance system for domestic hot water. And considering the amount of hot water that gets wasted in long pipe runs to distant bathrooms, it often makes sense to install an electric-resistance point-of-use water heater to serve a bathroom or kitchen that is far from the home's main water heater. (For more information on this approach, see Point-of-Use Electric Tankless Water Heaters.)

While point-of-use electric water heaters can reduce the volume of hot water that is wasted when people who are waiting for hot water leave the faucet running, these appliances have several downsides, including the need for high-amperage electrical service and a reputation for increasing utilities' peak power surges. As I said at the beginning of this article, no water heating technology is perfect.

What about natural gas?

If natural gas is available at your site, you probably already know that natural gas is an inexpensive fuel. In a leaky old house, atmospherically vented gas water heaters work pretty well. In a tight house, however, these atmospherically vented appliances can backdraft whenever the kitchen range hood fan is turned on. (For more information on this problem, see Makeup Air for Range Hoods.)

If you live in a mild climate and have an attached garage, one possible solution to the backdraftingIndoor air quality problem in which potentially dangerous combustion gases escape into the house instead of going up the chimney. problem is to install the water heater in the garage. As long as your garage doesn't have a powerful exhaust fan, the water heater is unlikely to backdraft.

If you want to install a gas water heater inside your tight house, you'll have to specify a sealed-combustion water heater or a power-vented water heater (either a conventional tank-style water heater or a tankless model). These water heaters cost more than atmospherically vented water heaters, but they solve the backdrafting problem.

If you live in a warm climate, one other option is to install a gas-fired tankless water heater outdoors, attached to an exterior wall. One advantage to this approach: you don't have to devote any precious indoor space to your water heater.

Advantages and disadvantages

When it comes to specifying a water heater, there is no clear winner. The table below summarizes the advantages and disadvantages of different types of equipment.

        Advantages     Disadvantages
Natural-gas tank-style water heater with atmospheric venting • Natural gas is an inexpensive fuel • Risk of backdrafting
• Fossil fuel burning contributes to global climate change
Natural-gas tank-style water heater with power venting or sealed combustionCombustion system for space heating or water heating in which outside combustion air is fed directly into the combustion chamber and flue gasses are exhausted directly outside. • Natural gas is an inexpensive fuel • Fossil fuel burning contributes to global climate change
• This type of water heater is expensive
Natural-gas tankless water heater • Natural gas is an inexpensive fuel
• Tankless water heaters are very compact
• Tankless gas water heaters use about 37% less energy than typical tank-style gas heaters
• Fossil fuel burning contributes to global climate change
• This type of water heater is expensive
Electric-resistance tank-style water heater • Electrical usage can be balanced by a PV system
• Equipment is simple and inexpensive
• High fuel cost
Electric-resistance tankless water heater (either point of use or whole house) • Electrical usage can be balanced by a PV system
• Tankless water heaters are very compact
• High fuel cost
• Requires high-amperage electrical service
• Puts a strain on electric utilities by increasing peak power loads
Heat-pump water heater • Electrical usage can be balanced by a PV system
• Electrical usage is significantly less than a resistance heater
• Requires a fairly large room
• Can be noisy
• Cools the air of the room where it is located
• Equipment is expensive
Solar thermal water heater • Reduces dependence on fossil fuel and electricity • Equipment is expensive
• Requires a backup system
• Equipment complicates re-roofing

A new decision tree

In 2013, I wrote an article for Fine Homebuilding called “The Water Heater Payoff”. The article included a "decision tree" designed to help guide homeowners through the water heater thicket.

I've updated my decision tree for this article; it now includes a more prominent focus on electric appliances.

Hot water bullet points

A few other principles to keep in mind:

  • If you have a tight, well-insulated house, you're probably using more energy for domestic hot water than you are for space heat.
  • Although solar thermal water heaters make environmental sense, they are too pricey for most families.
  • No matter what type of water heater you install, it's important to plan an efficient piping layout to reduce waste to a minimum. In most cases, that means that the water heater should be located close to the room where most hot water is used. The diameter of the hot water lines should be as small as possible (consistent with code requirements and minimum flow rate requirements). In some homes, it makes sense to install a demand-controlled hot water circulation system to reduce the time it takes for hot water to reach distant fixtures.
  • If your family prefers showers to baths, a drainwater heat recovery device will significantly reduce the energy you use for domestic hot water.

Martin Holladay’s previous blog: “These Superinsulated Homes Were Delivered By Truck.”

Click here to follow Martin Holladay on Twitter.

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May 13, 2016 10:55 AM ET

Water Heaters

Martin - Nice review article and update from your previous article.

May 13, 2016 11:12 AM ET

Do tankless water heaters really save energy?
by Patrick McCombe

Good writing Martin. "Tankless gas water heaters use about 37% less energy than typical tank-style gas heaters." Where does this fact come from Martin? I thought I'd read that families with tankless heaters often use more water because it's "limitless" , which would potentially use more energy. I also thought the savings varied based on how you consume hot water. i. e. steady draws throughout the day or all at once in the morning or night.

May 13, 2016 12:31 PM ET

Edited May 18, 2016 4:04 PM ET.

Response to Patrick McCombe
by Martin Holladay

I based that statement on a well-respected research project conducted in Minnesota. The researchers — Dave Bohac, Ben Schoenbauer, and Martha Hewett of the Center for Energy and Environment in Minneapolis, along with Tom Butcher of Brookhaven National Laboratory and Mary Sue Lobenstein of Lobenstein Consulting — monitored water heaters in ten homes for over a year. Their data have been published in a report, “Actual Savings and Performance of Natural Gas Tankless Water Heaters”.

For a summary of the researchers' findings, see my article, Are Tankless Water Heaters a Waste of Money?

May 13, 2016 1:47 PM ET

heat pump split system
by David Gadbois


I e-mailed one of the U.S.-based reps for Sanden at the end of last year. As you know, they make a heat pump split system for domestic water heating. For an all-electric house, it will probably be the hot ticket for many. Things might have changed since then, but here is the information he gave me:

"We are hoping to have the certifications in place by the end of the year,
and will be offering product for sale in 2016

The product will consist of a 4.5kw External HP unit which will then be
connected to multiple sizes of storage tank, 50, 60 and 80 Gallon
depending on the requirement of the application"

May 13, 2016 2:08 PM ET

Response to David Gadbois
by Martin Holladay

GBA readers who want to learn about the Sanden water heater can read my article on the topic, Split-System Heat-Pump Water Heaters.

If I were to include the Sanden water heater in my table listing advantages and disadvantages, here's what I would write:

• Electrical usage can be balanced by a PV system.
• Electrical usage is significantly less than a resistance heater.
• Unlike most heat-pump water heaters, the Sanden doesn't rob space heat from the house.

• Equipment is expensive (probably $5,000 or more including installation).
• Few installers are familiar with the equipment.
• Few plumbers are familiar with trouble-shooting and repairs.

May 13, 2016 3:10 PM ET

David, Sanden was at NESEA
by Jonathan Lawrence CZ 4A New Jersey


Sanden was at NESEA in March but I don't recall what the rep said the availability was. They are going to be at the AIA show in Philly next week and I plan on having a more detailed conversation with the rep there. Hammer and Hand has installed a few of these out West and at least one unit is set up to also provide hydronic space heating, although Sanden does not approve of it for that use. I agree with Martin's pro's/con's list and I will be pressing the rep to see how people are going to get service if this thing fails. Can't wait a week for parts for a HWH.

May 13, 2016 4:08 PM ET

Sanden - Price and release date
by Brad Hardie

The Sanden co2 Water Heater is available beginning in June 2016, from Maine Performance Building Supply (East coast), and Small Planet Supply (West Coast).

Going price is $3500, not including installation. They’ll have two tank size options available: 43 & 83 gallons. Right now they are not recommending them for space heating, but for water heating.

May 17, 2016 12:02 AM ET

by James Morgan

Con: slow recovery?

May 17, 2016 6:15 AM ET

Response to James Morgan
by Martin Holladay

Yes, that is a disadvantage of heat-pump water heaters. But engineers have addressed the disadvantage by using high-volume tanks and (in most cases) including an electric-resistance element that kicks in when necessary. The bottom line: you want a bigger tank than you think.

May 17, 2016 11:52 AM ET

Another renewable option
by Brian Knight

Great summary of an extremely important subject. We have put HPWH into two homes with small mechanical rooms with louvered doors. One room is open to the floor truss system and the other to the space behind the attic knee-walls of a cape design, still within conditioned space with SIP roof panels. One homeowner has complained about the noise in the adjacent pool room.

Just posted this compost water heating system. I feel it's one of the healthiest and most cost-effective ways of heating water. Don't expect it to go mainstream but it's another tool, most appropriate for those willing to perform the necessary maintenance and increase their supplies of compost.

May 17, 2016 12:54 PM ET

Response to Brian Knight
by Martin Holladay

Greenhouse operators have been heating greenhouses with horse manure for at least 100 years. (As you probably know, the distinction between a "cold frame" and a "hot frame" depended on whether there was a layer of hot horse manure under the soil or not.)

Good luck with your experiments. I've been composting for 40 years, and I can think of at least four reasons why I wouldn't want to heat my domestic hot water with compost:

1. The tubing makes it hard to move the material with a tractor.

2. When you need the heat the most, the compost pile is frozen.

3. Circulating water lowers the temperature of the compost pile, slowing its rate of decomposition and reducing the chance that heat will kill weed seeds.

4. Keeping a pile hot requires a tremendous amount of labor, with frequent need to exchange material and refresh the pile.

That said -- good luck with your experiment.

May 17, 2016 1:02 PM ET

Heat-pump water heaters in small rooms
by Martin Holladay

You wrote, "We have put HPWH into two homes with small mechanical rooms with louvered doors."

GBA readers should be advised that this may not be a good idea. It's important to verify whether this type of installation meets the manufacturer's installation requirements. In some cases, this approach may void the water heater warranty.

According to Measure Guideline: Heat Pump Water Heaters in New and Existing Homes, "Even with a louvered door, locating the HPWH in a closet will likely reduce overall performance of the unit."

May 17, 2016 3:37 PM ET

Edited May 17, 2016 3:40 PM ET.

Thanks Martin, including the
by Brian Knight

Thanks Martin, including the floor system and triangular areas of the attic knee wall sections helped the small rooms meet HPWH manufacturer's requirements, without louvered doors. Still, the more those spaces see air circulation the better. I like louvered doors to all rooms without dedicated ventilation.

Some good points to consider on compost water heating. Sorry to soil your comments section but seems timely. Much like home insulation, climate seems to make a big difference. My experimental first, water heater pile kept water warm through the majority of Western North Carolina's winter with zero added insulation. I wonder if in northern climates like yours, increased insulation levels in the same proportions as wall/roof R-value for climate zones could keep the pile warm. Bagged, dry leaves are plentiful in my neighborhood in autumn and expect it to make good insulation before it's composted.

You have many years of compost building on me but in my experience with bagged leaves and coffee grounds, weeds have never been a problem. I've been doing warm/hot compost for 8 years and never been much of a pile turner either. At most, my piles get turned once, more to make room for a fresh pile. Leaves and coffee are easy to mix when building the pile and seem to get warm even by themselves.

I doubt you could measure the difference in decomposition by stealing the pile's warmth in a typical domestic situation, but slowing it down would improve performance in my mind, by extending the rebuild time. Long lasting warm temperatures are what I'm after and seem to be achieving, with no turning.

My compost ingredients are urban based, as is my 1/8 acre city lot. No need for a tractor with pitchfork and wheelbarrow. With the hanging spool set up, dealing with the tubing is not difficult at all. With the system in place, 97% of the labor is needed anyways, to build a regular compost pile of equal size.

May 17, 2016 3:54 PM ET

Edited May 17, 2016 3:57 PM ET.

Response to Brian Knight
by Martin Holladay

Everyone's situation is different. If you can keep a compost pile hot for 12 months of the year, and if that pile is large enough that you can steal a useful amount of heat from the pile, good for you. I know for a fact that it would be a tremendous amount of physical labor for me to achieve that.

Anyone with a stable full of horses, and the need to move the horse manure every day, might find your suggestion attractive. Horse manure gets hot -- hotter than unmodified cow manure or chicken manure -- by itself. All you have to do is move several tons of it, several times a year, and you are good to go.

Here in northern Vermont, the thermometer drops to -30F most winters. You would need a really big pile, with a perfect ratio of carbon to nitrogen, and lots of hay bales as insulation, to keep a compost pile hot through a Vermont winter. And it's hard to move materials when the snow is 3 feet deep -- so renewing the pile isn't easy from mid-November to early May.

May 17, 2016 4:14 PM ET

Based on my results so far, a
by Brian Knight

Based on my results so far, a six month rebuild or twice a year is reasonable to expect for maximizing performance, with no turning. This makes it through the winter but may be too hard to insulate up there.

May 17, 2016 4:18 PM ET

Compost labor
by Martin Holladay

How many hours does it take you to gather materials?

How many hours does it take you to move a pile of finished compost, and then to build a new pile where the old one was?

May 17, 2016 5:42 PM ET

Perhaps it gets
by Brian Knight

Perhaps it gets philosophical, but the activities you mention are things I've been doing to make compost anyways, the 97% labor guess. Gathering material is probably most intensive, divided up over many trips home, driving by starbucks or through the neighborhood with maybe five hours devoted for busy autumn weekends when a lot of bagged leaves are on the curbs. The coffee seems to be less work than the leaves because they are accumulated year round, where the leaves are more seasonal, you have to jump on them before the city hauls them off.

Harvesting the pile and building a new one, I guess 4-7 hours of labor with setting up the spool and fussing with the tubing maybe adding 30 minutes. It's been hard to get an exact time with the two water heater piles as I have been messing with a video camera to attempt documentation.

May 18, 2016 1:04 PM ET

Edited May 18, 2016 1:30 PM ET.

Actual article on Actual Savings
by Derek Roff

The link that Martin provided in comment #3 to the article "Actual Savings and Performance of Natural Gas Instantaneous Water Heaters" took me to a very brief summary, plus a further link to a pay per view PDF. The complete article text is available without cost at this link:

May 18, 2016 1:29 PM ET

Mineral water and tankless heaters?
by Derek Roff

Various studies have reported various findings on how serious a problem mineral scale is on the efficiency of tankless water heaters. One report said that the higher relative efficiency of a tankless water heater could be reduced to zero or negative numbers, in as little as one month of use, if the water supply has a high mineral content. This report is referenced on page 16 of the article "Actual Savings and Performance of Natural Gas Instantaneous Water Heaters", along with references to other reports with different findings. That same page asserts, "newer TWHs only require flushing in areas with hard water", and on page 17, "Current TWH technology only requires the operator to remove any build up from a small screen at the water heater outlet". No references are indicated for either of these latter two statements.

That "Actual Savings..." article is dated 2010. I'm wondering if anyone knows of more recent testing on whether scale buildup is a significant efficiency inhibitor for tankless water heaters in areas with hard water, and what field maintenance requirements are like today.

May 18, 2016 3:50 PM ET

Water heater add-ons to geothermal HVAC systems
by Dean McCracken

We are considering a geothermal installation for heating/cooling. Domestic hot water add-on units are marketed as better options than the alternatives discussed above. Opinions?

May 18, 2016 3:58 PM ET

Edited May 18, 2016 4:01 PM ET.

Response to Dean McCracken
by Martin Holladay

A "geothermal" system -- more accurately called a ground-source heat pump -- can be quite efficient if you are lucky enough to have a team that includes an experienced system designer, a good installer, and a contractor who can commission the system. Not every homeowner is lucky enough to have access to such a team, unfortunately, and I've heard a lot of stories about nightmare installations.

Ground-source heat pumps are also notoriously expensive -- generally $18,000 to $35,000 for a residential system. It's hard for future energy savings to make up for the very high installation cost, especially when compared to a few air-source heat pumps (minisplits) and a PV system.

If you have your heart set on a ground-source heat pump, and you are confident in the skills of your designer, installer, and commissioning agent, and you can afford to sign the check, go right ahead with your plan. If you have a ground-source heat pump, you should include a desuperheater, which is capable of producing domestic hot water (especially during the summer, when the system is in air conditioning mode).

For more information on this topic, see Are Affordable Ground-Source Heat Pumps On the Horizon?

May 18, 2016 4:08 PM ET

Response to Derek Roff (Comment #18)
by Martin Holladay

Thanks for sharing the link to the article. I have corrected the link in my comment (Comment #3), as well as in the article that discussed the researchers' findings (Are Tankless Water Heaters a Waste of Money?).

May 18, 2016 4:11 PM ET

"Instant" hot water to dishwasher - Recirculation? Small tank?
by Dean McCracken

We are preparing for a major remodel, and one problem I would like to solve is the dishwasher inlet temperature! Dishwashers really require "instant on" hot water to do a good job. We find ourselves running the tap until the water at the sink has reached temperature before starting the washer (same practice for showers).

As appliances use less-and-less water in the name of conservation, they need that water hot as soon as they begin filling. It seems that hot-water recirculation or an under-sink heater may consume less energy and water than the typical water heating strategy. It seems to me that even an undersink tankless heater might not be able to provide sufficient immediate heating to reach a temperature needed.

Since we are doing a major remodel, we will have the opportunity to route extra pex tubing with insulation for a recirculation loop. I imagine activating the loop pump prior to use rather than have it run constantly - or even on a schedule. Opinions?

May 18, 2016 4:13 PM ET

Mineral build-up in tankless water heaters
by Martin Holladay

You pose good questions on mineral buildup in tankless water heaters. I have lived with two propane-fired tankless water heaters (only one at a time) over the last 25 years; I use them as backup for my solar thermal / wood-heated DHW system. Neither tankless heater ever required cleaning to remove mineral buildup.

I understand that this is a real problem in areas with hard water, but it's hard to figure out how big a problem it is. I welcome comments from GBA readers with experience on this issue.

May 18, 2016 4:16 PM ET

Response to Dean McCracken (Comment #23)
by Martin Holladay

Check the specs of the dishwasher you are considering purchasing. Many dishwashers, especially European models, include instantaneous electric-resistance water heaters to boost the temperature of incoming water.

May 18, 2016 4:48 PM ET

Bursty filling of newer appliances abuses tankless heaters, etc
by Dana Dorsett

Water sipping dishwashers & clothes washers short-cycle tankless HW heaters into lower efficiency, a problem not solved by a recirculation loop. The amount of fuel wasted to heat up a 1 gallon washer-fill by the lower efficiency isn't as big a problem as the equipment wear & tear of 4-6 ignition cycles for that gallon of hot water. It can make more sense to have the appliances themselves heat the water where possible (which is usually the case for dishwashers, less common for clothes washers), supplying them only unheated water. That way there is no abandoned heat in the distribution plumbing, and only the water used by the appliance is being heated.

Recirculation loops save water, but tend to use more energy with a greater volume of abandoned hot or tepid water in the now higher volume loop. Insulating both the supply & return loops to at least R3 helps a with that.

Drainwater heat recovery heat exchangers can yield substantial energy savings for families who shower rather than tub-bathe. Bigger gravity film types can recover over 50% of the heat that was otherwise going down the drain, saving half the input energy (and input power) of long-ish draws that have simultaneous drain & potable hot water flows. It does nothing for tub fills.

High mass condensing tank type combi water + space heat systems can beat hydronic boiler + standalone HW heater solutions on efficiency.

In the changing net-metering of solar PV landscape tankless electric HW heaters have a potential down side. Some utilities are now allowed to assess "demand charges" for the highest average power used in any 15 to 60 minute interval during a billing period for their solar customers as a means of recouping grid costs. A couple of 10 minute showers with a 20,000 watt tankless doesn't use much energy overall, but it has the potential to put a serious spike in the demand charges.

May 18, 2016 5:43 PM ET

Edited May 18, 2016 5:44 PM ET.

Dishwasher heating (Comments 23 and 25)
by Derek Roff

Our dishwasher is a bit different from both Dean's description of no internal heat, and Martin's mention of instant inlet water heating. Ours has internal, electrical resistance water heating, but it takes the time it needs, rather than being instantaneous. That is usually two to three minutes of water heating, after filling, and before the pump starts spraying the water on the dishes. Of course, it takes a little longer in the winter, when the input water is colder. The salesman told us that our dishwasher would keep heating the water as needed during the wash cycles, so that it didn't cool off. I'm not sure if that is true, but having opened the dishwasher at many different points during the cycles, I can verify that the water inside is always very hot.

May 23, 2016 9:05 AM ET

Edited May 23, 2016 9:05 AM ET.

WSU Research on Split System Heat Pump Water Heaters
by Kohta Ueno

Apologies if somebody has already linked to this, but Ken Eklund/WSU's presentation on their research on Sanden split system HPWHs from the PassivHaus conference is available here:

Takeaway--yep, definitely some nice efficiency numbers there. The key kicker will probably be cost.

May 23, 2016 9:27 AM ET

Response to Kohta Ueno
by Martin Holladay

Thanks for the link. The measured efficiency of the Sanden is impressive.

May 23, 2016 10:43 AM ET

Sanden looks great ... freeze protection?
by Charlie Sullivan

The results from field monitoring of the Sanden look great. It looks like it beats an indoor conventional HPWH, even in cold climates. But what about freeze protection in those climates? I think they use heat trace cable on the water lines for that, but that makes me nervous--if you lose power for 8 hours in the winter, does the equipment get destroyed? Do you need a battery backup for the heat trace?

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