Strategy Guideline: Proper 

Water Heater Selection 

M. Hoeschele, D. Springer, A. German, 

J. Staller, and Y. Zhang

Alliance for Residential Building Innovation (ARBI)

August 2012
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iii

Strategy Guideline: Proper Water Heater Selection

Prepared for: 

Building America

Building Technologies Program

Office of Energy Efficiency and Renewable Energy 

U.S. Department of Energy 

Prepared by: 

M. Hoeschele, D. Springer, A. German, J. Staller, Y. Zhang

Alliance for Residential Building Innovation (ARBI)

Davis Energy Group, Team Lead

123 C Street

Davis, California 95616

NREL Technical Monitor: Michael Gestwick

Prepared under Subcontract No. KNDJ-0-40340-00

August 2012
iv

Acknowledgments

Davis Energy Group would like to acknowledge the U.S. Department of Energy Building 

America program and their funding and support of development of this guideline as well as 

research that informed it. Key technical information feeding into this report comes from two 

California Energy Commission-funded Public Interest Energy Research projects and Building 

America-sponsored work completed by the CARB team. We also recognize the input of ARBI 

partner Heschong Mahone Group, who developed the multifamily portion of this guideline.
v

Contents

Acknowledgments ..................................................................................................................................... iv

List of Figures ............................................................................................................................................ vi

List of Tables ............................................................................................................................................. vii

Definitions................................................................................................................................................. viii

Executive Summary.................................................................................................................................... x

1 Residential Water Heating Background Information ........................................................................ 1

1.1 National Overview...............................................................................................................1

1.2 Where Does Hot Water Energy Go?....................................................................................2

1.3 Regional Look at Water Heater Types.................................................................................4

1.4 Types of Systems.................................................................................................................5

1.4.1 Individual Water Heaters.........................................................................................6

1.4.2 Central Water Heaters Serving Multiple Dwelling Units......................................10

2 Water Heater Selection Process ....................................................................................................... 13

2.1 System Considerations.......................................................................................................13

2.1.1 Gas Tankless Water Heaters..................................................................................13

2.1.2 Heat Pump Water Heaters......................................................................................14

2.1.3 Solar Thermal Water Heating ................................................................................14

2.1.4 Combined Hydronic Systems ................................................................................15

2.1.5 Distribution Systems..............................................................................................15

2.1.6 Individual Water Heater Tool ................................................................................16

2.1.7 Multifamily Central Water Heater Tool ................................................................25

3 General Water Heater Implementation Details ................................................................................ 32

3.1 Applicable Health, Safety, and Energy Codes...................................................................32

3.1.1 Temperature Control..............................................................................................32

3.1.2 Pressure Relief Valves and Expansion Tanks........................................................32

3.1.3 Drain Pans and Seismic Strapping.........................................................................32

3.1.4 Piping and Insulation .............................................................................................33

3.1.5 Recirculation Controls...........................................................................................33

3.1.6 Combustion Safety, Combustion Air, and Venting ...............................................33

References................................................................................................................................................. 35

Attachment A: Supporting Information for Individual Water Heater Tool........................................... 36
vi

List of Figures

Figure 1. 2010 BEDB residential primary energy use breakdown ......................................................... 1

Figure 2. Typical hot water system energy flow schematic ................................................................... 3

Figure 3. Example central system design with approximate energy flows .......................................... 3

Figure 4. Regional gas water heating saturations................................................................................... 4

Figure 5. Relative residential pricing of electricity to natural gas (site basis) .................................... 5

Figure 6. Electric and gas storage water heater schematics ................................................................. 6

Figure 7. Central system utilizing two circulating boilers with storage tank ..................................... 11

Figure 8. Central system utilizing two large storage water heaters .................................................... 11

Figure 9. Individual water heater tool process flow .............................................................................. 17

Figure 10. Climate designation for evaluating HPWH performance .................................................... 18

Figure 11. Central water heater tool process flow................................................................................. 25

Figure 12. Average annual groundwater temperature (oC)................................................................... 27

Figure 13. Estimated boiler costs as a function of AFUE..................................................................... 30

Figure 14. Gas water heater clearance requirements ........................................................................... 34

Figure A-1. Sample input-output curve for individual field site ........................................................... 36

Figure A-2. Gas water heater efficiency versus recovery load ............................................................ 37

Unless otherwise noted, all figures were created by the ARBI team.
vii

List of Tables

Table 1. Current and April 2015 NAECA Storage Water Heater Requirements .................................... 7

Table 2. Water Heater Comparison ........................................................................................................... 8

Table 3. Commercial Water Heater Efficiency Standards..................................................................... 12

Table 4. Daily Recirculation Loop Heat Loss (kBtu) and % Savings Versus Base Case................... 16

Table 5. Estimating Hot Water Loads Based on Number of Occupants and Climate........................ 19

Table 6. Nominal Annual Operating Cost Versus Load (Based on $0.10/kWh and $1.00/therm) .... 20

Table 7. Nominal Annual HPWH Operating Cost (based on $0.10/kWh)............................................. 20

Table 8. Nominal Advanced Gas Water Heater Operating Cost (assumes $1.00/therm)................... 21

Table 9. Default Incremental Installed Costs†........................................................................................ 22

Table 10. Amortization Factor (Fixed Rate Loan Assumed)................................................................. 22

Table 11. New Construction Annual Savings Calculation .................................................................... 23

Table 12. New Construction Cost-Effectiveness Calculation............................................................... 23

Table 13. Calculation of 10-Year Savings............................................................................................... 24

Table 14. Retrofit Cost-Effectiveness Calculation................................................................................. 24

Table 15. Building Characteristics .......................................................................................................... 26

Table 16. Hot Water Use Assumptions ................................................................................................... 26

Table 17. Characterize Distribution System Performance.................................................................... 27

Table 18. Characterize Heating Equipment ............................................................................................ 28

Table 19. Local Utility Rates..................................................................................................................... 28

Table 20. Central Water Heater Spreadsheet Tool Outputs.................................................................. 29

Table 21. Calculation of Central System 10-Year Operating Cost Savings ........................................ 29

Table 22. Advanced System Cost Effectiveness Calculation †............................................................ 31

Table A-1. Projected Annual Efficiency Versus Load and Climate for Electric Storage and 

HPWHs................................................................................................................................................. 38

Unless otherwise noted, all tables were created by the ARBI team.
viii

Definitions

ACEEE American Council for an Energy Efficient Economy

AFUE Annual Fuel Utilization Efficiency

ANSI American National Standards Institute

ARBI Alliance for Residential Building Innovation

ASHRAE American Society of Heating, Refrigerating and AirConditioning Engineers

BEDB Building Energy Data Book

Btu British thermal unit

CARB Consortium for Advanced Residential Buildings

CEC California Energy Commission

CEE Center for Energy and Environment

DOE Department of Energy

DEG Davis Energy Group, Inc.

DHW Domestic hot water

o

C Degrees Celsius

o

F Degrees Fahrenheit

EERE Energy Efficiency and Renewable Energy

EF Energy factor

EIA Energy Information Administration

FSEC Florida Solar Energy Center

EPA Environmental Protection Agency

gpd Gallons per day

gpm Gallons per minute

HP Horsepower
ix

HPWH Heat pump water heater

IPC International Plumbing Code

IRC International Residential Code

kBtu/h Thousand British Thermal Units per hour

kWh Kilowatt-hour

LBNL Lawrence Berkeley National Laboratory

MBtu Million Btu

NAECA National Appliance Energy Conservation Act

NOx Nitrogen oxide

PIER Public Interest Energy Research

RECS Residential Energy Consumption Survey

UPC Uniform Plumbing Code

W Watt
x

Executive Summary

This Strategy Guideline on proper water heater selection has been developed to provide step-bystep procedures for evaluating preferred cost-effective options for energy efficient water heater 

alternatives based on local utility rates, climate, and anticipated loads. These procedures, 

developed both for individual water heater applications (both single and multi-family) and 

multifamily central systems, provide users with projections on operating cost savings over a 10-

year time horizon for retrofit applications and on a cash flow basis for new construction. The

savings information, combined with installation cost estimates, allows one to determine which 

alternatives make sense for a particular application. The information presented in this guideline

is based on latest monitoring results from residential field assessments of advanced gas water 

heater systems and heat pump water heater (HPWH) systems. The methodology presented here 

can be further refined as more data becomes available on emerging water heating technologies.

The tool is targeted at both single and multifamily new and retrofit applications. The intended 

audience includes:

• Builders and Building Owners

• Plumbers

• General Contractors

• Homeowners.

This guideline fills an important need because it moves beyond a simplified approach of 

comparing alternative water heating systems based on a single performance metric. By 

recognizing the load variations on equipment performance, climate differences, and retail fuel 

rates, one can develop a more customized performance assessment of competing technologies. 

This guideline represents the first step in the process of developing a comprehensive systembased evaluation of optimal water heater system design, which will hopefully be developed in 

the near future.

Other Building America-sponsored activities will lead to measure guidelines that focus on 

technology-specific implementation details related to installation issues in new and existing 

homes. These guidelines will address issues related to combustion air, venting requirements, 

space conditioning impacts, safety issues, and other implementation details. The CARB team has 

developed such a guideline on HPWHs, entitled “Heat Pump Water Heaters in New and Existing 

Homes”, and IBACOS is in the process of finalizing a tankless water heater guideline.
1

1 Residential Water Heating Background Information

1.1 National Overview

According to the U.S. Department of Energy’s (DOE) 2010 Building Energy Data Book

(BEDB)1

, residential water heating consumes 2.9 quads of primary energy annually, or 13.1% of 

the energy delivered to residential buildings (Figure 1). In milder climates, water heating 

represents an even larger fraction of total household consumption. For example, the 2009 

California Residential Appliance Saturation Survey2 indicates that average household water 

heating gas use represents 49% of the 354 therm/year household consumption (versus 37% for 

space heating), in contrast to the roughly 2:1 national heating to water heating ratio shown in 

Figure 1.

More than 92% of U.S. households live in either single-family homes or multifamily buildings 

with four or less units (RECS 2009). For this segment of the population, individual water heaters 

represent the water heating appliance of choice. For the remaining ~8% of households, central 

water heaters serving multiple households represent the most common system type.

Figure 1. 2010 BEDB residential primary energy use breakdown

Over the past 70 years, storage water heaters have been the predominant water heater type in the 

United States, making up over 95% of the existing units installed in single and multifamily 

 1 http://buildingsdatabook.eren.doe.gov/docs%5CDataBooks%5C2010_BEDB.pdf 2 http://www.energy.ca.gov/appliances/rass/

13.1%

Space Heating

Space Cooling

Water Heating

Lighting

Refrigeration

Electronics

Wet Cleaning

Cooking

Computers

Other
2

households. Recently, gas tankless water heaters have made inroads with industry projected gas 

tankless sales of over 400,000 units per year (or 5% of annual sales) with near-term growth 

expectations significantly exceeding that of conventional storage water heaters3

. Storage water 

heaters maintain a reservoir of heated water available at all times, resulting in instantaneous 

delivery of hot water. Maintaining the hot water reservoir comes at the expense of standby losses 

attributed to tank losses and pilot energy common to virtually all atmospheric gas storage water 

heaters. Regardless of hot water demand, standby energy losses occur with storage water heaters.

In looking toward a future with more efficient water heating systems, not only are efficiency 

improvements necessary at the heat source, but water heater recovery loads also must be reduced 

through a combination of improved appliances, fixtures, and showerheads, as well as improved 

hot water distribution systems. In this environment, conventional storage water heaters, 

especially center flue gas units, will look increasingly undesirable as a component of an energy 

efficient home.

1.2 Where Does Hot Water Energy Go?

The breakdown of hot water energy use in a single or multifamily building type is comprised of 

the energy consumed at the fixtures, the distribution losses resulting from delivering hot water 

from the water heater to the use points, the water heater combustion (or conversion)

inefficiencies, and the associated standby losses (see Figure 2). Distribution losses vary widely 

based on factors including building type, presence (and control type) of a recirculation system, 

configuration of the distribution system, and use quantities and patterns. Gas water heater 

combustion inefficiencies typically range from 5%-25% of the recovery load, while electric 

inefficiencies are close to zero for electric resistance heating. Standby losses represent the energy 

required to maintain the system in an active mode4

. Gas tankless water heaters eliminate this 

standby thermal parasitic5, but exhibit cycling degradation as each draw requires the heat 

exchanger to be brought up to temperature, resulting in additional energy use, water waste, and a 

delay in hot water delivery. Auxiliary system inputs include energy contributions from solar 

systems, drain heat recovery devices, and desuperheaters.

In multifamily buildings, one finds either individual water heaters serving each apartment, or a 

central water heating system where multiple dwelling units are served from a single water heater 

system. This can encompass one or more water heating devices and/or storage tanks. The central

systems generally feature a pumped recirculation loop to more quickly deliver hot water to 

individual dwelling units. Figure 3 shows a typical schematic of such a system in a multistory 

building. The key components are the heating system, the recirculating loop (denoted by hot 

water supply and return lines) and the non-recirculating branch lines that feed individual units. 

The benefit of the recirculation loop is to bring hot water in closer proximity to the use points, at 

the expense of added thermal and pumping energy losses. In the example shown, the distribution 

losses are roughly the same magnitude as the hot water energy consumed.

 3 http://www.aceee.org/files/pdf/conferences/hwf/2011/Plenary%20-%20Mike%20Parker.pdf 4 For gas storage water heaters this represents about 40 therms/year (Hoeschele et al, 2011), which can significantly 

erode overall efficiency in low-load applications. 5 It is important to recognize that nearly all gas tankless units, HPWHs, and high efficiency gas storage products 

have parasitic electrical usage due to components including controls, pumps, and combustion air blowers.
3

Figure 2. Typical hot water system energy flow schematic

Figure 3. Example central system design with approximate energy flows
4

1.3 Regional Look at Water Heater Types

Nationally, 52% of homes are served with natural gas water heaters, 42% with electric water 

heaters, and the remainder served primarily by propane, and to a lesser extent, fuel oil. Figure 4

provides recent estimates of gas storage water heating saturation with higher percentages found 

in the western states and the northern tier. The southeast has the greatest saturation of electric 

water heaters. 

These regional differences are a function of both natural gas availability and the relative cost of 

natural gas and electricity, per Btu. Figure 5 plots the ratio of average statewide residential 

electric rates to average natural gas rates (2009 EIA data) on a “per kBtu” site energy basis6

. 

This plot highlights the wide range of pricing that exists throughout the United States and is 

informative in developing a first impression of whether conversion from gas-to-electric (i.e. 

HPWH) or vice versa, is appropriate for a given location. Not all states are shown, as the graph 

focuses on those states with the greatest range in electric/gas pricing. For areas with electric to 

gas ratios of 3 or higher, the economics of converting from gas to HPWH will be challenging. 

Conversely, for locales with ratios of <2, HPWHs should be an economically attractive 

alternative to gas.

Source: DRI International, 2009. Water Heater Market Profile

Figure 4. Regional gas water heating saturations

 6 1 kWh = 3.413 Btu/hour on a site energy basis
5

Prepping for Future 

Efficiency Retrofits

________________________________________

California’s Title 24 is 

proposing a requirement to

provide the infrastructure for 

future efficient water heater

retrofits, reducing some of the 

significant barriers. This 

approach would involve 

providing an adequate gas line 

to handle high capacity 

equipment, locating an 

electric outlet adjacent to the 

water heater location, and 

facilitating future alternative 

venting systems.

Figure 5. Relative residential pricing of electricity to natural gas 

(site basis)

1.4 Types of Systems

There are numerous recent resources that provide an overview of 

advanced water heating technology options. DOE’s Energy Efficiency 

and Renewable Energy website7 has information and simple tools for 

comparing efficient water heater options. A 2011 water heating 

“roadmap” was developed for DOE’s Building Technologies Program 

to assist DOE in developing a strategy for moving the marketplace 

towards more efficient water heating strategies8

. In addition, the 

Florida Solar Energy Center (FSEC) held a webinar9 in late 2011 

providing an overview of high efficiency options, and the American 

Council for an Energy Efficient Economy (ACEEE) recently 

completed an assessment of potential savings and expected cost 

effectiveness of various residential water heating technologies10.

 7 http://www1.eere.energy.gov/calculators/water_heating.html

8 http://www.ornl.gov/sci/ees/etsd/btric/pdfs/WaterHeatingTechnologiesRoadmap_9-30-2011_FINAL.pdf 9 http://vimeo.com/29780187

10 http://aceee.org/research-report/a112

1.0 

1.5 

2.0 

2.5 

3.0 

3.5 

4.0 

4.5 

5.0 

5.5 

Alaska

California

Colorado

New Jersey

New York

Minnesota

Utah

Wisconsin

New Mexico

Connecticut

Michigan

Maine

Illinois

Montana

Wyoming

Massachusetts

Kentucky

Oklahoma

Virginia

Louisiana

Oregon

West Virginia

Hawaii

Washington

Arkansas

Arizona

Alabama

North Carolina

Florida

South Carolina

Georgia

Ratio of Average Electric to Natural Gas per Site kBtu

Energy Factor Test

________________________________________

The EF test procedure 

prescribes six equal hot water 

draws (total of 64.3 gallons) 

at hourly intervals followed 

by 18 hours of standby.

Energy output from the water 

heater and energy consumed 

are totaled during the test. It is 

widely recognized that the EF 

test overstates the efficiency 

of gas tankless water heaters 

by limiting the daily load to 

six equal draws, which 

underestimates real world 

cycling effects. In addition, 

the fairly high recovery load 

(41,050 Btu/day) skews 

storage water heater 

performance higher than 

observed in mild regions.
6

1.4.1 Individual Water Heaters

Figure 6 compares the key components of residential electric (on the left) and gas storage water 

heaters. The electric water heater typically has two 4.5 kW electric elements that are interlocked 

to prevent simultaneous operation. The center flue gas storage water heater on the right has a 

burner on the bottom with hot combustion gases rising through the center flue and exiting at the 

top of the tank. The design is thermally less efficient than that of a storage electric water heater 

since the center flue design and continuously burning pilot contribute to significant standby 

energy consumption. This parasitic effect is clearly represented by typical Energy Factors (EFs) 

for conventional gas and electric storage water heaters. Energy Factor is the federally mandated 

performance metric for the vast majority of residential water heaters. These products include

storage water heaters (gas, propane, electric resistance, or heat pump) with storage volumes 

between 20 and 120 gallons, and input ratings of less than 75,000 Btu/hour.Gas units with EFs of 

~ 0.60 have recovery efficiencies in the neighborhood of 78%. Electric storage units, which are 

nearly 100% efficient at converting input energy to stored heat, demonstrate a smaller resulting 

standby degradation, with typical EFs of about 0.90.

Figure 6. Electric and gas storage water heater schematics

Gas tankless water heaters, with storage volumes of less than 2 gallons, and input ratings 

between 50,000 and 200,000 Btu/h are also covered by the EF rating. Currently, many of the 

residential/small commercial condensing storage water heaters on the market are not EF rated, 

since their input rating exceeds the 75,000 Btu/h maximum limit. These water heaters and other 

larger commercial water heaters fall outside of these criteria and therefore have performance 

defined in terms of thermal efficiency and hourly standby loss.
7

Current National Appliance Energy Conservation Act (NAECA) requirements for a 40 gallon 

storage water heater mandate a minimum EF of 0.59 for gas water heaters and 0.92 for electric 

water heaters11. Effective April 15, 2015, new NAECA requirements will boost minimum EFs 

slightly for units with storage volumes < 55 gallons, but gas-fired units above 55 gallon storage 

volume will be required to achieve condensing efficiencies and similarly, heat pump technology 

will be required for electric units above 55 gallons. Table 1 summarizes the current and 2015

minimum storage water heater EFs for 40 and 60 gallon storage units. 

Table 1. Current and April 2015 NAECA Storage Water Heater Requirements

Current April 2015

Gallons Gas Electric Gas Electric

40 0.59 0.92 0.62 0.95

60 0.56 0.89 0.75 1.99

The advent of new technologies such as tankless heaters, HPWHs, and gas hybrid units, which 

combine a tankless unit with a downsized storage tank, results in changes in both performance 

and hot water delivery characteristics relative to the mainstay gas and electric storage water 

heaters. Table 2 compares the pros and cons of the various water heater types serving single 

family buildings and individual units in multifamily buildings.

 11 Minimum efficiency is dependent on storage volume.
8

Table 2. Water Heater Comparison

Conventional Storage Advanced Technologies

Gas Electric

ENERGY STAR 

Gas 

(0.67–0.70 EF)

Gas Tankless Condensing 

Storage HPWH

Typical Efficiency 0.58–0.62 EF 0.90–0.95 EF 0.67–0.70 EF 0.80–0.95 EF ≥ 90% thermal 

efficiency

> 2.0 EF

Installed Cost (New) Low Low Moderate Moderate-high Moderate-high Moderate-high

Installed Cost 

(Retrofit) Low Low Moderate-high

High (assuming 

gas line must be 

upsized)

Moderate-high Moderate-high

Savings Versus 

Standard N/A N/A

For moderate to

high loads, 

typically ≥ 10%

Typically ≥ 30%

For moderate to 

high loads, 

typically ≥ 30%

Typically 

≥ 40% (versus 

electricity) 

depending on 

climate loads, 

installation 

details

Hot Water Delivery 

Performance

Immediate; 

good recovery 

capacity

Immediate; 

moderate 

recovery 

capacity

–

Cold start delay; 

minimum flow 

rate; cold water 

sandwich; endless 

hot water

Immediate; 

generally high 

recovery 

capacity

Immediate; 

relatively low 

heat pump 

recovery 

capacity

Maintenance Minimal Minimal Minimal If hard water area, 

can be significant

Generally 

minimal Some (air filter)

User Interactions None None None

Generally see 

change in behavior 

from users versus 

standard gas 

storage water 

heater

None

Mode, set 

points, and hot 

water loads 

affect 

performance and 

backup heating
9

Supporting Research

It is important to look at conventional storage water heater performance from a 

context of efficiency dependence as a function of hot water recovery load. As the 

graph below shows, an idle standard efficiency atmospheric gas water heater will 

consume about 40 therms/year just to maintain a hot tank. As hot water loads 

increase, efficiency, defined as energy flow out of the water heater divided by energy 

consumed, slowly climbs upward from zero. Water heating loads are typically 

characterized in terms of average gallons per day. “Typical” per capita hot water 

consumption has generally been assumed to be ± 20 gallons per day, although 

variations among households are large due to behavioral factors, frequency of tub 

use, and water efficiency of appliances, showers, and sink faucets. A recent 

compilation of data from various detailed monitoring studies across the nation (Lutz, 

2011) suggests average single family household usage of approximately 50.6 gallons 

per day, or 17.0 gallons per person per day.

The DOE EF test procedure assumes a daily hot water load of 64.3 gallons at a 77oF 

temperature rise (recovery load of 41,050 Btu/day or 15.0 MBtu/year), but more 

recent field monitoring studies suggest that this level is likely high. A recently 

completed California water heater field test of eighteen single family households 

(with an average of 3.6 occupants) monitored average recovery loads of 27,200 

Btu/day (9.9 MBtu/year). Another factor suggesting lower average water heating 

loads is that RECS estimates that 58% of U.S. households are single or two-person 

households. Future trends towards reducing shower and appliance hot water usage 

will further reduce usage, increasing standby parasitic as a total percentage of 

consumption. Multi-family central water heating systems generally see much higher 

loads than water heaters serving individual dwelling units, and therefore standby 

parasitics are a much smaller fraction of total usage.

0%

20%

40%

60%

80%

100%

120%

0

50

100

150

200

250

300

350

400

450

500

550

600

0 5 10 15 20 25 30 35 40

Percentage (Standby % of Total, or Delivery Efficiency)

Projected Annual Energy Use (therms)

Water Heater Annual Recovery Load (MBtu/year)

Standby Loss

Recovery Load

Combustion Inefficiency

WH Energy Usage

Standby % of WH Usage

WH Delivery Efficiency %
10

Recirculation Losses

_________________________________________

Field data from a California 

PIER multi-family DHW 

system research study (slated 

for completion at the end of 

2011) indicates that the 

average monitored

recirculation loop heat loss 

from 30 buildings was ~30%

of total use, or roughly equal 

to the total delivered hot water 

energy at the fixtures. 

However, the range of 

distribution loss varied widely 

(5%–61% due to loop 

configuration and operational 

differences. The variability 

among buildings is difficult to 

assess without monitoring.

1.4.2 Central Water Heaters Serving Multiple Dwelling Units

Compared to an individual water heating configuration, central water heating systems generally 

exhibit higher daily loads, with a resulting increase in daily operation (i.e. burner or heater 

operation) and fewer hours in standby mode. However, offsetting the decreased stand-by loss are

higher distribution losses associated with central system recirculation loops. The recirculation 

loop distribution piping ensures a quick delivery of hot water at a consistent temperature and 

significantly reduces water waste due to high wait times encountered in “trunk-and-branch” 

systems. Central system recirculation loops can also lead to increased plumbing design 

complexity and significant plumbing cost. Based on our regional understanding of central system 

practice, and surveying of key Building America teams with knowledge of central system 

configurations, there appears to be a high degree of variability in how systems are laid out, with 

resulting implications on overall system performance.

According to information presented at the 2011 ACEEE Hot Water Forum12, over 70% of central 

commercial water heating heat systems are gas-fired, with current sales approximately equally 

split between condensing and non-condensing gas-fired systems. Figure 7 and Figure 8 show 

typical layouts for the two common central gas-fired heating system configurations: boiler 

system with storage, and multiple storage water heaters.

Recirculation loop pumps installed with central systems may or 

may not be controlled. Often, controls are installed but 

building owners override them to address occupant complaints 

when they have problems getting hot water in the middle of the 

night. Common control options include a time clock, a 

temperature sensor to operate the pump based on a minimum 

return water temperature, a combination time clock/

temperature control, and emerging control technologies that 

include temperature modulating and demand recirculation 

systems.

Temperature modulation controls do not control the pump but 

instead control the water heater temperature setting. This 

control lowers the hot water temperature at times when 

demand is expected to be low, usually during the middle of the 

night. Both temperature modulation schedule and temperature 

setpoints can be tailored according to hot water demand 

patterns. 

Demand controls switch the recirculation pump on in response to either water demand or a 

combination of water demand and hot water temperature drop measured at the end of the loop. 

Water demand can be signaled by the user manually pressing a switch or activating a motion 

sensor or detected by a flow meter located at the beginning of the loop. “Demand only” sensors 

switch the pump on whenever hot water is drawn. Those controlled on both demand and return 

temperature switch the pump on when there is demand and the return temperature reaches a 

 12 See Slide # 4 at http://www.aceee.org/files/pdf/conferences/hwf/2011/Plenary%20-%20Mike%20Parker.pdf
11

lower threshold. Compared to the other controls, demand controls result in an increase in total 

pump off cycle time, enhancing energy savings while reducing wait time for hot water.

Figure 7. Central system utilizing two circulating boilers with storage tank

Figure 8. Central system utilizing two large storage water heaters

Federal standards mandate minimum thermal efficiencies of 80% for large gas storage water 

heaters and hot water supply boilers manufactured after October 2003. The federal standards 

require that water heater thermal efficiency and standby loss must be tested according to ANSI 
12

Z21.10.3-1998, §2.9 and ANSI Z21.10.3-1998, §2.10, respectively. Table 3 summarizes 

minimum efficiency requirements for large storage water heaters and boiler systems.

Table 3. Commercial Water Heater Efficiency Standards

Standards for Large Water Heaters

(Effective October 29, 2003)

Appliance

Input to 

Volume 

Ratio

Size

(Volume)

Minimum 

Thermal 

Efficiency

(%)

Minimum Standby Loss*,**

Gas Storage 

Water Heaters

< 4000 

Btu/h/gal Any 80 Q/800 + 110(Vr)*,** Btu/h

Gas Instantaneous 

Water Heaters

≥ 4000 

Btu/h/gal

< 10 gal 80 –

≥ 10 gal 80 Q/800 + 110(Vr)*,** Btu/h

Gas Hot Water 

Supply Boilers

≥ 4000 

Btu/h/gal

< 10 gal 80 –

≥ 10 gal 80 Q/800 + 110(Vr)*,** Btu/h

Oil Storage 

Water Heaters

< 4000 

Btu/h/gal Any 78 Q/800 + 110(Vr)*,** Btu/h

Oil Instantaneous 

Water Heaters

≥ 4000 

Btu/h/gal

< 10 gal 80 –

≥ 10 gal 78 Q/800 + 110(Vr)*,** Btu/h

Oil Hot Water 

Supply Boilers

≥ 4000 

Btu/h/gal

< 10 gal 80 –

≥ 10 gal 78 Q/800 + 110(Vr)*,** Btu/h

Electric Storage 

Water Heaters

< 4000 

Btu/h/gal Any – 0.3 + 27/Vm%/h

* Standby loss is based on a 70°F temperature difference between stored water and ambient requirements. In the 

standby loss equations, Vr is the rated volume in gallons, Vm is the measured volume in gallons, and Q is the 

nameplate input rate in Btu/h.

** Water heaters and hot water supply boilers with > 140 gal storage capacity are not required to meet the standby 

loss requirement if the tank surface is thermally insulated to R-12.5, if a standing pilot light is not installed, or (for 

gas-or oil-fired storage water heaters), if there is a flue damper or fan-assisted combustion.
13

Endless Hot Water

________________________________________________

Two recent field studies have 

collected high resolution data that 

addresses whether tankless water 

heater “endless hot water” 

contributes to higher hot water 

loads. A 2010 Minnesota CEE study 

that converted in ten homes storage 

to tankless water heaters, showed 

there was no statistically significant 

change in hot water consumption. A 

2011California Residential Gas 

Water Heating Program completed 

“pre” and “post” monitoring that 

indicated that at four of six tankless 

retrofit sites hot water consumption 

remained essentially the same. The 

remaining two sites showed 

increases, indicating more study of 

consumer behavior may be needed.

2 Water Heater Selection Process

Two tools have been developed for this guideline: one focused on water heaters serving 

individual dwelling units, and a second that addresses multifamily central water heater 

installations. Both tools present a process for selecting appropriate cost-effective water heaters 

based on specific information on hot water loads, climate, and utility rates. Default incremental 

cost assumptions are provided, but ideally, site-specific cost estimates should be used, especially 

in retrofit applications where implementation costs for different technologies can vary 

significantly based on venting requirements, electrical availability, and gas line upsizing needs.

The individual water heater tool is presented in the form of a step-by-step manual calculation. 

This tool relies on recent field performance data on current advanced water heater technologies

to model the performance of the different technologies. The multifamily central water heater tool 

is more complex in terms of inputs, and therefore has been developed as a stand-alone 

spreadsheet tool. It focuses solely on gas water heating performance assessment, since robust 

field data on advanced electric (i.e. HPWH) options are not complete at this time. This guideline 

document describes how to use the spreadsheet tool.

2.1 System Considerations

As new higher efficiency water heating technologies 

have entered the market in the past few years, early 

adopters have generally realized energy savings, but have 

also in some cases experienced a change in water heating 

delivery characteristics. Table 2 presented some of the 

key attributes of the different technologies. This section 

explores some of the hot water performance issues 

associated with different technologies in more detail.

2.1.1 Gas Tankless Water Heaters

Tankless water heaters have some unique hot water 

delivery characteristics, which offer benefits and can also 

lead to undesirable user behaviors. Widely marketed as 

providing “endless hot water”, these units, unlike storage 

water heaters, will provide hot water indefinitely13 up to 

a maximum flow rate (defined by heating capacity, 

setpoint, and inlet water temperature). For large 

households, this provides the advantage of being able to 

handle sequential high demand water heating loads. A 

potential disadvantage is that this could contribute to 

longer showers, resulting in reduced energy savings.

Tankless units also experience a time delay in delivering 

hot water due to start-up sequences, especially if the heat exchanger has fully cooled off from the 

prior draw. Most homeowners will notice the longer time delay, which may lead to a change in 

 13 A more extreme high load case (typically in cold climates where winter water heating Btu needs can be high) is 

where the unit cannot keep up with the load as the deltaT and flow rate exceed the unit’s heating capacity.
14

HPWHs and Homeowner

Interactions

____________________________________________

HPWHs represent the residential 

water heating technology whose 

performance is most sensitive to 

homeowner interactions. With a 

capability to set operating 

modes, as well as tank setpoints, 

the user has significant influence 

on performance. Applied loads, 

usage patterns, showerhead and 

appliance properties all factor 

heavily into how well the heat 

pump can keep up with loads 

and how much electric 

resistance heating is needed.

Educating both plumbers and 

consumers is a critical step in 

achieving optimal performance.

Solar Thermal Water 

Heating

____________________________________________

Although solar thermal water 

heating currently remains an 

expensive option, it can be a 

viable strategy in locations with 

significant solar availability, 

high gas and electric rates, and

high water heating use, 

especially in multi-family 

applications. Existing Federal 

tax credits and state incentives 

(see http://www.dsireusa.org/) 

will improve overall economics.

behavior in certain draws as occupants may give up on 

waiting for hot water to arrive. Time delays of 20 seconds 

or so are not uncommon, and can result in increased and 

unacceptable water waste and waiting times, especially in 

retrofit applications where homeowners have prior 

expectations on delivery times. Gas tankless minimum 

flow rates (typically 0.4 to 0.75 gpm) may also impact 

behavior as certain common draws, such as shaving or dish 

rinsing, may be impacted by the minimum flow rates.

User behavior and adaptability are key factors in how 

occupants respond to tankless delivery characteristics. 

Some occupants will seamlessly modify their behavior, 

while others will allow the performance changes to 

negatively influence their perception of the technology. 

Hybrid gas technologies, which marry a tankless unit with 

a smaller storage volume, aim to provide a middle ground 

performance approach while maintaining the rapid 

delivery characteristics associated with storage water 

heaters.

2.1.2 Heat Pump Water Heaters

HPWHs offer attractive EFs based on their lab testing 

results. In fact, testing of HPWHs under the EF test load 

profile indicates little or no electric resistance heating is 

required, nor is represented in the EF rating. Field findings 

suggest that resistance heating operation can be significant

depending upon climate (both due to inlet water and 

evaporator inlet air), setpoints and load patterns. Common 

real world occurrences of high daily loads or short 

duration, high intensity loads, can lead to situations where 

heat pump recovery capacity is insufficient to satisfy the 

tank thermostat, triggering inefficient electric resistance 

heating. Conversely, load reduction measures which 

reduce hot water use at showerheads, fixtures, and 

appliances will contribute to reduced peak and daily hot 

water loads, and should therefore improve HPWH 

efficiency. Much still needs to be learned on the factors 

and sensitivities affecting HPWH field performance 

variations, but homeowner education is clearly an important step in achieving optimal HPWH 

performance.

2.1.3 Solar Thermal Water Heating

Solar thermal water heating is a technology that is frequently considered as a potential 

component of an energy efficient water heating system. A good overview of technology options 
15

Minimizing Loads

____________________________________________

Remodels or appliance 

replacements are the perfect 

opportunity to evaluate water 

and energy efficient alternatives 

in showerheads, fixtures, clothes 

washers, and dishwashers. Visit 

the EPA and EnergyStar 

websites listed here, as well as 

your local utility for potential 

incentives.

www.epa.gov/watersense/

www.energystar.gov/index.cfm?

c=products.pr_find_es_products

can be found at the EERE website14. Relatively high costs make the market penetration low in 

single family homes, although multifamily installations generally offer better economics due to 

economies of scale and consistently higher loads for the system to work against. In many cases, a 

solar system will have a pre-heat tank that circulates water to the collectors and provides preheated water to the water heater. Storage systems interface well with solar systems, although 

condensing appliances may not operate at expected condensing efficiencies if water temperatures 

are too high. The BA-PIRC team is currently testing HPWHs with solar pre-heat in the 

laboratory to assess the combined performance and cost effectiveness. Gas tankless water heaters

coupled with solar thermal systems have been observed to experience burner modulation control 

issues when solar pre-heated water comes within 20°F to 30oF of the setpoint temperature. In this 

situation, the system may fire, and then shut off, leading to fluctuating output temperatures as the 

system attempts to reach a stable condition.

2.1.4 Combined Hydronic Systems

Combined hydronic systems utilize a single heating device to 

deliver heated water to both a delivery device (fan coil, 

baseboard, or radiant floor or panel) and for potable water for 

domestic uses. Common heat sources include high capacity gas 

tankless units, storage gas water heaters, boilers, and larger 

commercial HPWHs. Some building jurisdictions require a heat 

exchanger to isolate the potable water from the space heating 

loop, adding cost and reducing efficiency. The benefits of 

combined hydronic systems lie primarily in the potential cost 

advantage associated with using one heating appliance versus two 

appliances (a water heater and a space heater). The realized cost 

savings from eliminating the space heater can be applied to a 

single high efficiency water heating device. A key performance 

benefit for storage water heaters in low-load combined hydronic

applications is that the combined space and water heating loads 

will serve to improve the operating efficiency of the system. 

Significant research is currently underway within Building 

America (NorthernSTAR and BA-PIRC research projects) to identify preferred system 

configurations, document lab and field performance, assess customer satisfaction, and develop 

input for a design guide.

2.1.5 Distribution Systems

Distribution systems are a key part of the domestic hot water system, linking the heat source and 

the use points. In non-recirculating systems, hot water entering a “cold” distribution system will 

experience a transit time proportional to the entrained pipe volume (between water heater and 

fixture) divided by the hot water flow rate to reach the end user. During this time, some energy is 

lost, and additional energy contained in the water may be fully lost for the next draw. The 

specifics of the distribution system layout, pipe location, fixture/appliance flow rates, and use 

patterns all play into determining the overall impact in terms of distribution losses, water waste, 

 14 http://www.energysavers.gov/your_home/water_heating/index.cfm/mytopic=12850
16

and hot water waiting time. Recirculating systems generally result in much higher distribution 

losses, but significantly reduce water waste and hot water wait time. 

In larger homes or homes undergoing significant remodels, there are often bathrooms or other 

use points that are remote from the existing (or proposed) water heater location. Although every 

effort should be taken to optimize building design (i.e. hot water use point locations) relative to 

the water heater location, there are certainly cases where a second water heater or a demand 

recirculation system should be considered. A second water heater could make sense if the 

extended pipe runs are of extended length and large pipe diameter (more than a gallon of 

entrained pipe volume), since the incremental equipment cost would be partially offset by 

reduced plumbing costs and distribution losses. This could also improve customer satisfaction 

due to reduced hot water delivery times. Care should be taken in the selection of the second 

water heater, balancing the standby effects of a second storage tank versus a tankless water 

heater.

For central multifamily recirculating systems, a key factor affecting water heater recovery loads, 

and therefore the savings associated with a high efficiency system, is the configuration of the 

recirculation system and how the system is controlled. The ongoing PIER central water heating 

study has monitored more than thirty multifamily buildings in California. In addition to 

characterizing distribution system heat loss in these buildings, the study investigated the energy 

savings through recirculation loop control technologies. Data were collected under four 

recirculation control modes: continuous pumping, temperature modulation, timer control, and 

demand control. Monitoring was underway for more than a year with each applicable control 

strategy being implemented for at least two weeks. Table 4 presents study results from three of 

the projects, ranging in size from 40 to 98 housing units. The results indicate that controls reduce 

recirculation loop heat loss, although impacts do vary widely. Demand controls reduced heat loss 

more than temperature modulation and timer control strategies.

Table 4. Daily Recirculation Loop Heat Loss (kBtu) and % Savings Versus Base Case

Site 1

(98 Units)

Site 2

(82 Units)

Site 3 

(40 Units)

Continuous Pumping 640 221 202

Temperature Modulation 633 (1%) 205 (7%) n/a

Timer Control 601 (6%) 220 (0%) 187 (7%)

Demand Recirculation 412 (36%) 178 (19%) 180 (10%)

2.1.6 Individual Water Heater Tool

The water heater selection tool presented in this guideline takes into account estimated hot water 

loads, local climate effects (for HPWHs), local natural gas, propane, and electric rates, and 

current “best” estimates of equipment performance based on hot water load sensitivities. Local 

rates are important, because for the homeowner, operating costs are the driver rather than relative 

efficiency. The performance data incorporated into the tool is based on the latest research on 

advanced gas water heaters and HPWHs (a more complete description of the assumptions and 

the modeling methodology can be found in Appendix A.) Both hot water loads and local utility 
17

rates play a primary role in determining operating cost savings relative to the existing or base 

case electric or gas storage water heater. The flow chart in Figure 9 outlines the calculation 

methodology. The last step in the process, comparing projected savings to the expected 

implementation costs, can be completed with default cost assumptions or with real site-specific 

cost estimates. The latter is clearly preferable, especially for retrofit situations, since unique site 

characteristics can have a significant impact on costs.

Figure 9. Individual water heater tool process flow

Step 1: Determine Climate 

From Figure 10 below, select the climate that best characterizes your location. (Note that the 

selected climate only influences the performance of HPWHs. It also will affect the hot water load 

as cold water supply temperature is dependent on climate).

Calculate Advanced System Projected Savings

Calculate Base Case Operating Costs

Gas Base Case or Electric Base Case

Determine Inputs

Climate Load Elec Rates Gas Rates

Determine Cost Effectiveness (New or Retrofit Scenario)
18

Step 2: Estimate Hot Water Load

Residential hot water loads are characterized as low, moderate, above average, or high. Realizing 

that inlet and outlet water temperatures strongly affect the water heater recovery (Btu) load, a 

rough approximation for the four load categories (in terms of gallons per day) is 20, 45, 65, and 

110 gpd, respectively. For new construction, assume either moderate or above average loads, 

unless more specific household information is available. For retrofit applications, try to assess 

the current occupant situation, or rely on the load suggestions presented in Table 5 below. In 

cases where two load categories are shown, red highlighting denotes the recommended selection.

Figure 10. Climate designation for evaluating HPWH performance
19

Table 5. Estimating Hot Water Loads Based on Number of Occupants and Climate

Number of Occupants in Household

Climate Type 1–2 3 4 5+

Cold/Very 

Cold/Subarctic

Low/

Moderate

Moderate/

above average

Above average/

high High

Marine Low Moderate/

above average

Above average

Above average/

high

Mixed Humid Low Moderate/

above average

Above average

Above 

average/high

Hot/Dry/Humid, 

Mixed/Dry Low Moderate Moderate/

above average

Above average/

high

Step 3: Calculate Electric and Gas Rate Factors to Reflect Local Retail Prices

3a. Calculate Electric Rate Factor

Enter Local Average Electric Rate in the calculation below:

Elecfactor = 

Local Average Electric Rate( $

kwh)

$0.10

kWh (nominal Electric Rate)

3b. Calculate Gas Rate Factor

1. For natural gas customers, enter Local Average Gas Rate:

Gasfactor = 

Local Average Gas Rate ( $

therm)

$1.00

therm (nominal Gas Rate)

2. For propane customers, enter Local Average Propane Rate:

Gasfactor = 

Local Average Propane Rate ( $

gallon) * gallon

0.91 therm

$1.00

therm (nominal Gas Rate)

Step 4: Calculate Base Case Annual Water Heating Cost

Identify the base case water heater type (gas storage or electric storage). For retrofit projects, this

is the existing water heater. For new construction, this depends on local building practice. 

Calculate Base Case annual costs (BC$) using Table 6 and the appropriate equation below.
20

Table 6. Nominal Annual Operating Cost Versus Load 

(Based on $0.10/kWh and $1.00/therm)

Low Moderate Above Average High

Electric Storage $135 $344 $486 $785

Gas Storage $95 $190 $258 $412

For electric storage water heater base case:

Annual Base Case Cost (Electric Storage) = Table “6” Cost x Elecfactor = zzzzzzzz BC$

For gas storage water heater base case:

Annual Base Case Cost (Gas Storage) = Table “6” Cost x Gasfactor = $ zzzzzzzz BC$

Step 5: Calculate Advanced Systems Operating Cost

5a. HPWH

Use Table 7 to determine nominal annual HPWH operating costs. Note, if the HPWH location is 

not in unconditioned space (e.g. in a basement or inside conditioned space), the user should 

consider (based on site conditions) moving one climate down in the table to approximate 

improved performance due to more favorable operating conditions (i.e. assuming a HPWH in 

conditioned space in a cold climate, the operating costs for a marine climate should be used for 

calculations). Keep in mind that an indoor HPWH will affect space heating and cooling loads; 

this effect has not been considered in this evaluation process. 

Table 7. Nominal Annual HPWH Operating Cost (based on $0.10/kWh)

Low Moderate Above 

Average High

Cold/Very Cold/Subarctic $102 $194 $290 $574

Marine $84 $157 $230 $437

Mixed Humid $71 $132 $191 $352

Hot/Dry/Humid, 

Mixed/Dry $62 $114 $163 $295

Annual HPWH Operating Cost = Table “7” Cost x Elecfactor = $ zzzzzzzz Total$
21

5b. Advanced Gas Water Heaters

Using Table 8, determine projected annual advanced gas water heating cost for technologies that 

are being considered. Calculate actual annual gas cost for each technology using the local 

Gasfactor. (Electric usage is estimated at 80 kWh/year for all of the advanced gas technologies

based on findings from a recently completed field study (Hoeschele et al, 2011).) Apply local 

Elecfactor to determine annual electric costs.

Table 8. Nominal Advanced Gas Water Heater Operating Cost (assumes $1.00/therm)

Low Moderate Above

Average High

ENERGY STAR < 0.70 EF $77 $166 $231 $376

Condensing Storage $70 $144 $197 $317

Gas Tankless $49 $133 $193 $329

Condensing Tankless $41 $116 $169 $290

Advanced WH Annual Gas Cost = Table 8 Cost x Gasfactor = zzzzzzzz Gas$

Advanced WH Annual Electrical Cost=80 kWh x $.10/kWh x Elecfactor = zzzzzzzz Elec$

Advanced WH Total Operating Cost = Gas$ + Elec$ = zzzzzzzz Total$

Evaluate annual operating costs for all gas water heaters of interest.

Step 6: Estimate Incremental Costs and Define Viable Options

Incremental costs for a specific technology in a specific application will vary based on many 

factors, especially in retrofit situations where site factors will significantly affect the 

implementation costs for a given technology. Equipment make and model, product pricing 

through existing distribution channels, plumber familiarity with the technology, and site factors 

(gas line upsizing, electrical circuit upgrade, venting issues, etc) all contribute to the final 

projected costs. Table 9 presents default incremental costs for each of the identified technologies, 

which are intended to represent the full installed cost for the advanced water heater minus the 

cost of a conventional replacement water heater. The costs were developed from a variety of 

sources including recent vendor surveys as part of Davis Energy Group’s ongoing retrofit 

program activities, the NREL cost database, and online price quotes. It is recommended that 

current bids or refined estimates are used in lieu of the default costs, if possible. 
22

Table 9. Default Incremental Installed Costs†

New Retrofit

HPWH $1,000 $1,500

ENERGY STAR < 0.70 EF $400 $800

Condensing Storage $700 $1,600

Gas Tankless $600 $2,000

Condensing Tankless $900 $2,300

† Ideally use site-specific cost estimates in lieu of default values

Step 7: Calculate Projected Savings for All Alternatives

New construction and retrofit applications are deemed to have different economic drivers. For 

new construction, the presumption is that a positive cash flow on a fixed rate 30-year mortgage 

would represent a favorable investment option for the buyer. For retrofit, a 10-year simple 

payback is the assumed cost-effectiveness metric for comparing various efficiency alternatives. 

For simplicity the calculation does not take into account the impact of gas/electric rate 

escalations or mortgage tax deduction benefits, although one could perform such a calculation, if 

desired.

For new construction cases, go to step 7a, and for retrofit proceed to step 7b.

Step 7a: Calculate Projected Cost Effectiveness for New Construction Case

Table 10 presents amortization factors for both 15- and 30-year fixed rate loans. Select the 

appropriate Amortization Factor (AF), with interpolation between values allowed, if needed.

Table 10. Amortization Factor (Fixed Rate Loan Assumed)

Interest 

Rate

Amortization Factor 

(30-Year Term)

Amortization Factor 

(15-Year Term)

3% 0.051 0.083

4% 0.057 0.089

5% 0.064 0.095

6% 0.072 0.101

7% 0.080 0.108

To compute cost effectiveness, enter BC$ from Step 4 in the Base Case row and Total$ for 

alternative system options from Steps 5a and 5b into column A of Table 11. In Column B, 

subtract base case operating costs to determine annual savings (positive value in Column B).
23

Table 11. New Construction Annual Savings Calculation

System

Type

[A] Annual

Operating Cost ($)

[B] Projected

Annual Savings ($)

Base Case BC = $ n/a

HPWH A1: $ = BC – A1 = $

ENERGY STAR < 0.70 EF A2: $ = BC – A2 = $

Condensing Storage A3: $ = BC – A3 = $

Gas Tankless A4: $ = BC – A4 = $

Condensing Tankless A5: $ = BC – A5 = $

Table 12 requires information from Tables 9–11 and incorporation of any local incentives that 

would reduce the cost of the advanced measure. A cost-effectiveness ratio is calculated as shown 

in Column E. Any measure with a value greater than one is deemed cost-effective, with larger 

values indicating greater relative cost-effectiveness.

Table 12. New Construction Cost-Effectiveness Calculation

A B C D E

(Table 11)

Annual 

Savings ($)

(Table 10) 

Amortization 

Factor

(Table 9) 

Incremental 

Cost ($)

Incentives 

($) 

CostEffectiveness

Ratio

A/(B*(C-D))

HPWH

ENERGY 

STAR < 0.70 

EF 

Condensing 

Storage

Gas Tankless

Condensing 

Tankless

Step 7b: Calculate Projected Savings for Retrofit Case

This tool presumes a 10-year simple payback as a reasonable retrofit economic criterion for 

assessing cost-effectiveness of competing technologies. To compute 10-year savings, enter BC$

from Step 4 in the Base Case row and Total$ from Steps 5a and 5b for alternative system options 

into column A of Table 13. In Column B, 10-year savings are calculated.
24

Table 13. Calculation of 10-Year Savings

System 

Type

[A]

Annual Operating 

Cost $

[B] 

10-Year 

Projected Savings $

Base Case BC = $ n/a

HPWH A1: $ = 10 * (BC – A1) = $

ENERGY STAR < 0.70 EF A2: $ = 10 * (BC – A2) = $

Condensing Storage A3: $ = 10 * (BC - A3) = $

Gas Tankless A4: $ = 10 * (BC - A4) = $

Condensing Tankless A5: $ = 10 * (BC - A5) = $

Two final factors affecting cost may come into play before completing a final determination of 

alternative system cost-effectiveness: incentives or tax credits, and any costs associated with sitelevel fuel switching. Local, state, and or federal incentives or tax credits for individual 

technologies may be available (see http://www.dsireusa.org/). Fuel switching costs include those 

associated with converting a site from electric-to-gas (in areas where gas service is new to the 

area) or from gas/propane to electric (where electric rates are low and HPWHs may be 

attractive)15. Table 14 is used to compute retrofit cost-effectiveness taking into account these two 

factors. Incentive amounts

16 are entered into Column C, and Column D is designed to include 

costs associated with fuel switching. Column E performs the final calculation for determination 

of savings for a specific technology.

Table 14. Retrofit Cost-Effectiveness Calculation

A B C D E

(Table 13)

10-Year 

Savings

(Table 9) 

Estimated

Incremental

Cost

Incentives 

Fuel 

Switch 

Cost 

Calculated

Savings

(A+C)-(B+D)

HPWH

ENERGY STAR < 

0.70 EF 

Condensing Storage

Gas Tankless

Condensing 

Tankless

Compare 10-year savings to incremental installation cost. If the savings are greater than 

incremental installation cost, the measure is deemed cost effective over a 10-year time horizon.

 15 In this case, there will be a cost for running a 240V dedicated circuit to the HPWH. 16 Visit http://www.dsireusa.org/ to determine what incentives may be available for your application.
25

2.1.7 Multifamily Central Water Heater Tool

The multifamily central water heating tool attempts to characterize the performance and energy 

use of central recirculating systems based on a limited set of input data. This is a challenging 

prospect given the uncertainty in trying to quantify recirculation system performance in a 

simplified manner. Studies have shown performance ranging from relatively low loop losses to 

very high losses. The PIER field monitoring suggests that 30% central system distribution losses 

may characterize average losses; any one particular project could deviate widely from the mean. 

When evaluating multifamily central systems, it is important to realize that since the water 

heating recovery load is much higher than for a unit serving a single household, the economics 

for an energy efficient system are generally much more compelling. Although commercial water 

heaters and/or boilers are considerably more expensive than residential-scale products, the bangfor-the-buck is much greater. Figure 11 outlines the process for the multifamily central water 

heater evaluation.

Figure 11. Central water heater tool process flow

Click MultiFamily_Central_DHW_EvaluationTool_v1.0.xlsx to access the central water heater 

spreadsheet tool. 

# of Dwelling Units Average # of Bedrooms per Unit Average Floor Area Per Unit

Usage Patterns # of Stories Climate

Recirculation Loop Condition Recirculation Loop Pump Power

DHW Input Thermal Efficiency Standby Loss

Gas Rate Electric Rate

DHW Load Distribution Loss Water Heating Equipment

Describe Building Characteristics

Describe Basecase DHW Equipment

Describe Distribution System

Calculate High Efficiency DHW 10 Year Projected Savings

Describe Utility Rates

Calculate Basecase Operating Conditions

Annual Operating Cost
26

Step 1: Describe Building Characteristics (Table 15)

1a: Enter the number of dwelling units in the apartment building in row five. The number of 

dwelling units in the building is a metric to describe if the building is considered a small, 

medium, or large building.

1b: Enter the average number of bedrooms per dwelling unit in row 6.

1c: Enter the average floor area per dwelling unit in row 7. 

1d: Enter the number of stories in building in row 8.

1e: Enter the hot water usage pattern in row 9 based on the estimated gallon per day hot water 

consumption per occupant listed below in Table 16.

1f: Enter the estimated average annual water temperature in row 10 of the tool. Use Figure 12 as 

a resource, if needed. Based on field monitoring of water heater inlet water temperatures, 5°F 

should be added to the Figure 12 value to reflect increased inlet water temperature due to passive 

heating in garages and or basements.

Example for Los Angeles: Inlet temperature = (20°C) 68°F + 5°F = 73°F.

Table 15. Building Characteristics

4 Input

5 Building Number of apartment units 30

6 Average number of bedrooms per unit 2

7 Average floor area per unit (ft2

) 700

8 Number of stories 3

9 Occupancy Use quantity High use

10 Climate Average annual groundwater temperature (°F) 65

Table 16. Hot Water Use Assumptions

Multifamily Load Assumptions

Low Use Medium Use High Use

Gallons per Day per Occupant 11.52 14.40 17.28
27

Source: Environmental Protection Agency

Figure 12. Average annual groundwater temperature (oC)

Step 2: Describe Distribution System (Table 17)

2a: Using the pull-down menus in row 11, describe the DHW distribution system condition as 

“poor”, “normal”, or “good”. The calculation tool assumes a distribution system heat loss equal 

to 30% of the end use load for a “normal” system, based on California PIER field research17. The 

“normal” heat loss is increased by an additional 30% if the distribution system can be 

characterized as poor, and decreased by 30% if characterized as good18. Realizing that this input 

is somewhat qualitative, the general recommendation for all new construction and most retrofit 

applications is to specify “normal”.

2b: Specify pump size, in horsepower, in row 12.

Table 17. Characterize Distribution System Performance

11 Distribution Recirculation loop condition Poor

12 Recirculation loop pump size 0.25

 17 Preliminary findings under California Energy Commission PIER project (contract number 500-06-029) 18 There are multiple qualitative factors that need to be assessed to determine the condition of the distribution 

system. Pipes could be located in unconditioned space or located in the conditioned space. What is the level of pipe 

insulation on the hot water supply and recirculation lines? Is the insulation securely wrapped or is it falling off in 

sections? 

Temperature

Conversions

5oC = 41oF

10oC = 50oF

15oC = 59oF

20oC = 68oF

25oC = 77oF

(interpolate as 

needed)
28

Step 3: Describe Base Case Primary DHW Equipment (Table 18)

Identify the base case water heater type and characteristics. For retrofit projects this is the 

existing water heater. For new construction this will depend on local practices and the local 

building code.

3a: Input Total DHW Input Rate (Btu/hr) in row 13.

3b: Input DHW thermal efficiency (%) in row 14.

3c: For systems consisting of large DHW storage tank type water heaters, or boilers coupled with 

storage tanks, input DHW system storage tank standby loss (Btu/hr) in row 15. Manufacturer 

specifications and the AHRI Primenet on-line directory19 will report standby loss for specific 

manufacturer and model number. (For existing water heaters not listed, assumed standby loss is 

equal to 2.5% of input capacity.)

Input DHW system standby loss (Btu/hr) in row 15.

3d: Input setpoint temperature in row 16.

Table 18. Characterize Heating Equipment

13 Heating Equipment Total heating capacity (Btu/hr) 600,000

14 Thermal efficiency (%) 80%

15 Standby loss (Btu/hr) 15,000

16 Setpoint temperature (°F) 135

Step 4: Input Utility Rates (Table 19)

4a: Average electric rate in $/kWh in row 17.

4b: Average natural gas rate in $/therm in row 18.

Table 19. Local Utility Rates

17 Fuel Prices Natural gas cost ($Therm) $1.00

14 Electricity cost ($/kWh) $0.14

Step 5: Tool Outputs (Table 20)

Outputs from the tool are shown in Table 20 and can be found in rows 20-33 of the tool.

 19 http://cafs.ahrinet.org/gama_cafs/sdpsearch/search.jsp
29

Table 20. Central Water Heater Spreadsheet Tool Outputs

20 Output

21 Load Daily dwelling unit hot water draws (gal/day) 51.8

22 Daily building hot water draws (gal/day) 1555

23 Temperature rise (°F) 70

24 Annual hot water Btu demand (therm/yr) 3298

25 Distribution Normal recirculation loop heat loss (therm/yr) 2807

26 Recirculation loop heat loss correction factor 1.0

27 Annual recirculation loop heat loss (therm/yr) 2807

28 Annual recirculation pump power consumption 

(kWh/yr)

1634

29 Heating Equipment Annual boiler Btu consumption (therm/yr) 8793

30 Standby loss (therm/yr) 1161

31 Peak hour demand (Btu/h) 481,807

32 Costs Annual boiler Btu consumption ($/yr) $8,793

33 Annual pump electricity consumption ($/yr) $229

Record the Annual boiler Btu consumption ($/yr) (Row 32) in Column A for BC$. Complete 

spreadsheet evaluation of high efficiency option and enter Annual boiler Btu consumption ($/yr)

in the Advanced Case row in Table 21.

Table 21. Calculation of Central System 10-Year Operating Cost Savings

System 

Type

[A]

Annual Operating Cost $

10-Year 

Projected Savings $

Base Case BC = $ n/a

Advanced Case A1: $ = 10 * (BC – A1) = $

Advanced Case A2: $ = 10 * (BC – A2) = $

Advanced Case A3: $ = 10 * (BC – A3) = $

Step 6: Estimate Costs and Determine Cost Effectiveness (Table 22)

Costs for commercial water heaters and boilers for various efficiency levels were estimated 

based on the NREL National Residential Efficiency Measures Database20, as well as vendors that 

Davis Energy Group is involved with for retrofit project activities. Condensing storage water 

heaters are estimated to cost an additional $9.35 per kBtuh of input capacity. Boiler costs from 

the NREL database, as a function of efficiency, are shown in Figure 13. Since the slopes for both 

regression fits are approximately the same, an incremental cost of $1.60 per kBtu is assumed for 

 20 http://www.nrel.gov/ap/retrofits/group_listing.cfm?gId=2
30

each AFUE point above 80%. These estimated costs are generic and should only be used if sitespecific costs, which fully address unique site issues, are unavailable.

Incremental costs are calculated as shown below:

Condensing Storage Cost = $9.35 per kBtuh * Input Rating (kBtuh)

or 

Efficient Boiler Cost = $1.60 * (AFUE – 80) * Input Rating (kBtuh)

Enter actual or above calculated incremental costs in Table 22, as well as the 10-Year Savings 

summarized in Table 21. Advanced system options with savings > incremental costs should be 

considered for implementation.

Figure 13. Estimated boiler costs as a function of AFUE

y = 1.6184x - 104.32

R2 = 0.998

y = 1.5654x - 92.238

R2 = 0.9997

$0

$10

$20

$30

$40

$50

$60

78 80 82 84 86 88 90 92 94 96

Installed Cost per kBtuh

Boiler Efficiency, % (AFUE)

New Construction

Retrofit
31

Table 22. Advanced System Cost Effectiveness Calculation †

Efficiency Option (Table 21)

10-Year Savings Incremental Cost

Option 1

Option 2

Option 3

Option 4

† Ideally use site-specific cost estimates in lieu of default values
32

3 General Water Heater Implementation Details

This guideline broadly addresses key implementation details that apply to water heater 

installation issues. Individual Building America Measure Guidelines addressing various 

advanced technologies are intended to focus in more detail on the issues specific to that 

technology.

3.1 Applicable Health, Safety, and Energy Codes

Provided below is essential information from various building codes that must be considered 

when inspecting, servicing, or replacing an existing water heater or installing a new one. This is 

not intended to be a complete list nor a direct citation of applicable codes. It is the responsibility 

of the installing contractor to insure that all national and local codes and manufacturer 

installation instructions are complied with.

3.1.1 Temperature Control

The temperature of water from tankless water heaters shall be a maximum of 140°F (IPC 1995, 

501.6). Serious burns can result from exposure to a water temperature of 140°F for only 5 

seconds.

For water heaters used as a heat source for a space heating system (“combined system”) the 

water heater shall have a maximum outlet temperature of 160°F (IPC 1995, 501.2). Even if not 

required by code, a tempering valve or mixing valve should be provided if the space heating 

system requires water temperatures higher than 125°F.

A draft ASHRAE standard, Prevention of Legionellosis Associated with Building Water Systems

(ASHRAE 188P) was available for public review in 2010 and will likely be published in 2012. 

The standard covers housing units supplied by one or more centralized hot water heaters, and 

specifies that in non-healthcare building facilities or when local regulations prohibit use of the 

temperatures of 51°C (124°F) and higher, hot water shall be stored at 49°C (120°F) or above. 

The standard also requires annual inspection and maintenance to include verification of 

thermostat function and twice per year draining to remove scale and sediment. Higher water 

temperature settings can accelerate the accumulation of sediment, which harbors Legionella

bacterium.

3.1.2 Pressure Relief Valves and Expansion Tanks

All water heaters shall be provided with approved pressure and temperature relief valves. They 

shall be set to open only at pressures below 150 psi and at temperatures below 210°F (UPC

2006, 608.4; IRC 2003, P2802.2; IPC 1995, 505.5). 

Where a backflow prevention device or check valve is installed on the water supply to a water 

heater, an expansion tank must be installed to prevent an increase in pressure (UPC 2006, 608.3; 

IPC 1995, 608.3.2).

3.1.3 Drain Pans and Seismic Strapping

Where water heaters or storage tanks are installed in locations where leakage will cause damage, 

they must be installed in a pan that is not less than 11⁄2” deep that is connected to a drain that is 
33

the same size or larger as the pressure-temperature relief valve. The drain must be terminated in 

an indirect waste receptor, or to the exterior of the building and not less than 6” nor more than 

24” above grade (IPC 1995, 505.5) (IRC 2003, P2803).

In seismic design categories C, D, E, and F, storage type water heaters shall be anchored or 

strapped to resist horizontal displacement due to earthquake motion. Strapping shall be applied 

within the upper 1/3rd and lower 1/3rd of the tank’s vertical dimension(UPC 2006, 508.2)

3.1.4 Piping and Insulation

Piping and components connected to a water heater for space heating applications shall be 

suitable for use with potable water (IRC 2003, 2802.2).

PEX-AL-PEX cannot be installed within the first 18” of piping connected to a water heater. 

(UPC 2006, 604.13.2)

Recirculating hot water lines must be insulated to at least R-2 (IRC 2006, 403.4), or in 

accordance with the formula below (IPC 1995, 608.2.1):

( )/ 25) i o R = t − t where:

R = resistance of insulation in hr-ft2-°F/Btu

ti = temperature in water pipe (°F);

to = design temperature of surrounding air (°F)

3.1.5 Recirculation Controls

Recirculating pumps shall include controls to shut them off automatically or be provided with a 

manual shut-off (IPC 2009, 608.3).

3.1.6 Combustion Safety, Combustion Air, and Venting

All burners and ignition devices for water heaters installed in garages must be a minimum of 18” 

above the floor (UPC 2006, 508.14).

Code allows the use of indoor combustion air or a combination of indoor and outdoor 

combustion air sources for naturally vented gas water heaters. However, this practice is highly 

discouraged, as installation of whole house fans or other high volume exhaust systems can cause 

back-drafting of the water heater and fire hazard. Equations for calculating the minimum 

allowable interior volume of air for naturally vented and fan assisted appliances are given in 

UPC 2006, 507.2.

Existing indoor gas water heater closets that are vented to indoor space through a louvered door 

can be converted to outside combustion air by sealing off the louvers, gasketing the closet door, 

and providing combustion air openings to the crawlspace and/or attic. Permanent combustion air 

ducts must be provided that each have a minimum free area of 1 in2 per 4,000 Btuh of rated 

water heater input if the ducts are vertical, and 1 in2 per 2,000 Btuh of rated input if the ducts are 

horizontal. They must terminate within 12” of the top of the closet and within 12” of the bottom 

of the closet. See UPC 2006, 505 & 507 for other requirements and options.
34

Figure 14 provides clearance requirements for venting of mechanical draft and direct vent water 

heaters.

Figure 14. Gas water heater clearance requirements
35

References

Bohac, D., Schoenbauer, B., Hewett, M. (2010). Actual Savings and Performance of Natural Gas 

Tankless Water Heaters. Minnesota Center for Energy and the Environment.

Brozyna, K. Rapport, A. (2011). Measure Guideline: Transitioning to a Tankless Water Heater. 

IBACOS. November 2011.

Colon, C., Parker, D. (2010). Side-by-Side Testing of Water Heating Systems: Results from the 

2009-2010 Evaluation. Florida Solar Energy Center report FSEC-CR-1856-10.

Davis Energy Group. (2007). Residential Feasibility Assessment of Gas Tankless Water Heaters 

in PG&E Service Territory (2007 Update of Original 2004 Report). Prepared for PG&E.

DOE (2009). ENERGY STAR Water Heater Market Profile and Program Design Guide: 

EPA (2012). Online Tools for Site Assessment Calculation. Environmental Protection Agency. 

http://www.epa.gov/athens/learn2model/part-two/onsite/tempmap.html

Hoeschele, M., Springer, D. (2008). Field and Laboratory Testing of Gas Tankless Water Heater 

Performance. ASHRAE Transactions, vol. 114, pt. 2, 453-461.

Hoeschele, M. et al. (2011). California Residential Advanced Gas Water Heater Field Study.

CEC PIER task report (in draft form).

Lutz, J.D. (Lawrence Berkeley National Laboratory). (2008). Water Heaters and Hot Water 

Distribution Systems. California Energy Commission, PIER Buildings End-Use Energy 

Efficiency. CEC-500-2005-082.

Lutz J.D., et al. (2011). Hot Water Draw Patterns in Single-Family Houses: Findings from Field 

Studies. Lawrence Berkeley National Laboratory. LBNL-4830E.

PG&E. (2010). Laboratory Evaluation and Field Testing of Residential Heat Pump Water 

Heaters. Pacific Gas & Electric Applied Technology Services Test Report #:491-10.04.

Pigg, S., Cautley,D., Mendyk,A. (2010). Energy Use by Residential Gas Water Heaters- A 

Technical Field Study in 10 Wisconsin Homes. Energy Center of Wisconsin. Report # 254-1.

Schoenbauer, B., Hewett,M., Bohac, D. (2011). Actual Savings and Performance of Natural Gas 

Tankless Water Heaters. ASHRAE Transactions, vol. 117, pt.1, 657-672.

Shapiro, C., Puttagunta, S., Owens, D. (2011). Measure Guideline: Heat Pump Water Heaters in 

New and Existing Homes. Consortium for Advanced Residential Buildings.

Valley Energy Efficiency Corporation. (2007). Super Efficient Gas Water Heater Appliance 

Initiative. California Energy Commission, PIER Energy-Related Environmental Research 

Program. CEC-500-05-010.

Weingarten, L. Weingarten, S. (1992. The Water Heater Workbook: A Hands-On Guide to Water 

Heaters. Elemental Enterprises: Monterey, California.
36

Attachment A: Supporting Information for Individual Water Heater 

Tool

The performance assumptions built into the Water Heater Selection Criteria Strategy Guideline

for water heaters serving individual users is based on recent field research into the performance 

of conventional and advanced water heaters. This field research was utilized to better represent 

the performance of emerging gas technologies, instead of relying on nominal efficiency ratings.

The CEC PIER Residential Water Heating Program included an 18-home California field 

monitoring effort involving pre-monitoring of existing gas storage water heaters and postmonitoring of advanced gas water heaters, including ENERGY STAR® storage water heaters 

(0.67 to 0.70 EF), condensing storage units, and tankless water heaters (both condensing and 

non-condensing). HPWH performance was based on detailed monitoring data provided by the 

CARB team’s ongoing monitoring of fourteen HPWHs in New England. This Building America 

work has been underway since late 2010 with data collection continuing into early 2012. The 

CARB team completed a HPWH measure guideline in November 2011.

Figure A-1 below provides an example of the data used to generate the performance curves for 

the gas water heaters. The data is plotted with daily input gas energy on the Y-axis and daily 

output thermal energy on the X-axis. The data in Figure A-1 represents gas water heater 

performance for both existing gas storage and advanced gas water heater modes (in the example 

provided, CTWH indicates a condensing tankless water heater). Base case input-output data, 

defined by the linear regression relationships shown, were averaged over all the base case sites, 

and likewise all advanced site data were averaged over the four different advanced water heater 

system types (ENERGY STAR- six sites, condensing storage- three sites, non-condensing 

tankless – three sites, and condensing tankless – five sites).

Figure A-1. Sample input-output curve for individual field site

y = 1.3394x + 14459

R2 = 0.9649

y = 1.2117x + 746.29

R2 = 0.9904

0

20000

40000

60000

80000

100000

120000

140000

160000

180000

200000

220000

0

20000400006000080000

100000120000140000160000

Daily Energy Input (Btu/day)

Daily Energy Output (Btu/day)

Base

Post- CTWH
37

Figure A-2 represents the average performance of each gas water heater product type. The data is 

plotted in the format of daily efficiency versus output energy (or recovery load). This format of 

plotting efficiency more clearly highlights the degradation in storage water heater efficiency at 

very low usage levels. (The average monitored recovery load at the 18 California sites over a 12-

month period was ~ 27,200 Btu/day, or 1/3 less than the recovery load assumed in the Energy 

Factor test procedure.)

Recovery load is used as the X-axis in Figure A-2, as opposed to hot water gallons per day, since 

it is a better reflection of what drives the overall efficiency of a water heater. A gallon of hot 

water in Minnesota in December has considerably higher energy content (relative to the cold 

water inlet temperature) than a gallon of hot water in Palm Springs in July. With the recovery 

load approach, one can better represent differences in usage due to both hot water volume and 

climate (i.e. inlet water temperature) effects.

Figure A-2. Gas water heater efficiency versus recovery load

Preliminary HPWH field performance data has suggested that significant performance variations 

relative to EF ratings are found to exist when units are installed in real households. Current 

HPWH design features fairly low capacity compressors (0.5 to 1 ton nominal capacity) with 

second stage electric backup (typically 4.5 kW). Control strategies vary widely among the major 

manufacturers. Therefore, occupant behavior, tank setpoint, load pattern, and climate all 

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

1.00

0

10,00020,00030,00040,00050,00060,00070,00080,00090,000

100,000

Annual Water Heater Delivery Efficiency

Daily Recovery Load (Btu/day)

Existing Gas Storage WH

Tankless

Condensing Tankless

Condensing Storage

0.67 - 0.70 EF EnergyStar
38

potentially play significant roles in determining the operating efficiency. The CARB team 

graciously provided interim performance data from their 14-home HPWH field monitoring 

project that has been underway since late 2010. Data from the three monitored HPWH products 

were averaged to provide a relationship of COP versus inlet air temperature. (The performance 

assumptions should be reviewed in the future as more data become available). Preliminary 

findings also show an improvement in efficiency as loads increase, up to a point, at which time 

the combined effects of higher loads contribute to increased second stage heating operation. This 

effect was added to the simplified performance model, by degrading the calculated “heat pump 

only” (i.e. no second stage electric heat) COP by 0.09 for each 10,000 Btu of additional recovery 

load beyond 27,000 Btu/day. The net impact of the performance degradation at higher loads is 

reflected in the average annual COP values shown in Table A-1. Non-climate dependent electric 

storage water heater efficiency values are also shown as per current California Title 24 modeling 

rules listed in Appendix RE (Table RE-7)21.

Table A-1. Projected Annual Efficiency Versus Load and Climate for Electric Storage and HPWHs

Low Moderate Above 

Average High

Storage Electric 0.72 0.84 0.88 0.94

HPWH (climate dependent)

Cold/Very Cold (40°F) 0.95 1.49 1.48 1.28

Marine (50°F) 1.16 1.84 1.86 1.69

Mixed Humid (60°F) 1.37 2.19 2.24 2.10

Hot/Dry/Humid, Mixed/Dry (70°F) 1.58 2.54 2.62 2.50

The four hot water recovery load options available in the calculation tool are based on estimate

of representative hot water loads, based on household size and climate effects. According to 

RECS22, a surprising 58% of US households have two or less occupants, with nearly 27% of 

households having just one occupant. With best estimates of hot water loads averaging roughly 

16-19 gallons per day (Lutz et al, 2011), the ARBI team developed four usage categories—Low, 

Moderate, Above Average, and High. Since recovery load takes into account both gallons of hot 

water and the inlet to outlet “delta T”, we have listed a few “volume and deltaT” examples to 

demonstrate equivalency to the recovery load assumptions.

Low Usage (9,100 Btu/day) = 21 gal/day at a “hot climate” deltaT of 52°F , or

= 16 gal/day at a “cold climate” deltaT of 77°F

Moderate Usage (27,000 Btu/day) = 42 gal/day at a typical “cold climate” deltaT of 77°F, or

= 52 gal/day at a typical mid-range deltaT of 67°F

Above average Usage (40,000 Btu/day) = approximately equal to Energy Factor recovery 

load, or

 21 http://energy.ca.gov/2008publications/CEC-400-2008-002/CEC-400-2008-002-CMF.PDF 22 http://205.254.135.24/emeu/recs/recs2005/hc2005_tables/detailed_tables2005.html
39

= 72 gal/day at a typical mid-range deltaT of 67°F, or

= 60 gal/day at a “cold climate” deltaT of 77°F

High Usage (69,000 Btu/day) = 124 gal/day at a typical mid-range deltaT of 67°F, or

= 100 gal/day at a “very cold climate” deltaT of 83°F

With the four recovery load levels defined, annual gas water heater energy use (both base case 

and advanced) can be calculated using the relationship shown in Equation A-1:

Equation A-1:

Annual Gas Use (therms) = 365 days/year

100 000 Btus/therm * 

Daily Recovery Load (

Btu

day)

Load Dependent Efficiency

where the Load Dependent Efficiency is determined from the plot shown in Figure A-2.

Parasitic electrical use associated with the advanced gas water heaters is also addressed in this 

analysis. The GTI PIER field monitoring project found an average advanced water heater 

electrical consumption of 80 kWh/year (58 kWh/year for tankless), less than the ~ 102 kWh/year 

observed in the Minnesota CEE tankless study (Schoenbauer et al, 2011), where recovery load is 

higher and anti-freeze usage occurred with some installations. For this study, 80 kWh/year was 

used as proxy for the parasitic energy assumed for all advanced gas storage water heaters.

Electric water heater energy consumption is handled in a similar fashion as shown in Equation 

A-2. The load-dependent efficiency is taken from Table B-2.

Equation A-2:

Annual Electric Use (kWh) = 365 days/year

3 413 Btus/kWh * 

Daily Recovery Load (

Btu

day)

Load Dependent Efficiency

Energy use for both the base case scenario and the alternative cases are then converted to annual 

costs using nominal energy rates of $1.00 per therm and $.10 per kWh. Final site-specific cost 

adjustments can then be made using local retail rate factors, as outlined in the tool.
DOE/GO-102012-3602 ▪ August 2012

Printed with a renewable-source ink on paper containing at 

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