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Musings of an Energy Nerd

Domestic Hot Water: No Perfect Solution

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

Gas or electric? Tank-style or tankless? When it comes to choosing a water heater, there is no easy answer.

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) 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 heater 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…

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  1. user-4524083 | | #1

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

  2. GBA Editor
    Patrick Mccombe | | #2

    Do tankless water heaters really save energy?
    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.

  3. GBA Editor
    Martin Holladay | | #3

    Response to Patrick McCombe
    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?

  4. user-5714885 | | #4

    heat pump split system

    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"

  5. GBA Editor
    Martin Holladay | | #5

    Response to David Gadbois
    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.

  6. Jon_Lawrence | | #6

    David, Sanden was at NESEA

    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.

  7. Irishjake | | #7

    Sanden - Price and release date
    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.

  8. morganparis | | #8

    Con: slow recovery?

  9. GBA Editor
    Martin Holladay | | #9

    Response to James Morgan
    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.

  10. Brian Knight | | #10

    Another renewable option
    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.

  11. GBA Editor
    Martin Holladay | | #11

    Response to Brian Knight
    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.

  12. GBA Editor
    Martin Holladay | | #12

    Heat-pump water heaters in small rooms
    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."

  13. Brian Knight | | #13

    Thanks Martin, including the
    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.

  14. GBA Editor
    Martin Holladay | | #14

    Response to Brian Knight
    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.

  15. Brian Knight | | #15

    Based on my results so far, a
    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.

  16. GBA Editor
    Martin Holladay | | #16

    Compost labor
    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?

  17. Brian Knight | | #17

    Perhaps it gets
    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.

  18. lutro | | #18

    Mineral water and tankless heaters?
    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.

  19. lutro | | #19

    Actual article on Actual Savings
    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:

  20. deanm | | #20

    Water heater add-ons to geothermal HVAC systems
    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?

  21. GBA Editor
    Martin Holladay | | #21

    Response to Dean McCracken
    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?

  22. GBA Editor
    Martin Holladay | | #22

    Response to Derek Roff (Comment #18)
    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?).

  23. deanm | | #23

    "Instant" hot water to dishwasher - Recirculation? Small tank?
    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?

  24. GBA Editor
    Martin Holladay | | #24

    Mineral build-up in tankless water heaters
    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.

  25. GBA Editor
    Martin Holladay | | #25

    Response to Dean McCracken (Comment #23)
    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.

  26. Expert Member
    Dana Dorsett | | #26

    Bursty filling of newer appliances abuses tankless heaters, etc
    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.

  27. lutro | | #27

    Dishwasher heating (Comments 23 and 25)
    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.

  28. Expert Member
    KOHTA UENO | | #28

    WSU Research on Split System Heat Pump Water Heaters
    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.

  29. GBA Editor
    Martin Holladay | | #29

    Response to Kohta Ueno
    Thanks for the link. The measured efficiency of the Sanden is impressive.

  30. charlie_sullivan | | #30

    Sanden looks great ... freeze protection?
    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?

  31. LaciB | | #31


    BUilding a highly efficient house in ZOne 5. Planning on install PV panels. Mech Engineer has specified gas RHEEM PRESTIGE TANKLESS WATER HEATER B-1: RTGH-95DVLN-2 with standby 20 gal storage tank. Water heater will be located in basement of three story house with 3.5 bathrooms. Is this a good plan?

  32. GBA Editor
    Martin Holladay | | #32

    We can't design a system based on your information. You need to determine whether the diameter and the length of the hot water supply pipes (from the water heater to the distant faucets) is excessive (which can result in long wait times). We also have no idea if your natural gas is cheap or expensive -- local energy prices matter. You need to read the article on this page, as well as articles on piping -- for example, these two articles:

    "Residential Hot Water Distribution System Introduction" (Be sure to click on the links to all of Gary Klein's articles.)

    "Hot water circulation loops"

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