High Efficiency Tank Water Heaters

Thursday, January 19th, 2012

Hello again from Olson Defendorf Custom Homes.  We are a custom home builder in Austin, TX.  Today we are going to post about high efficiency water heaters.  

Although tankless water heaters have gotten a lot of attention the last few years, tank-style units offer plenty of efficient options, and in some cases, are actually more efficient.

There’s no arguing that tankless has become a buzzword among the green community, and it might be tempting to blindly jump on the bandwagon. But don’t discount tank-style water heaters too quickly. Advancements in both electric and gas storage water heaters are offering leaps in efficiency that are putting tank water heaters back on the green radar.

Pumped Up Efficiency

Perhaps one of the greatest advancements has been the integration of HVAC heat-pump technology into electric tank water heaters. The combination of the two technologies can produce efficiency ratings as high as 2.3 EF (Energy Factor), compared to the current minimum efficiency rating for a 60-gallon water heater at 0.89 EF, making them one of the most efficient water heating options available.
Often referred to as “hybrids,” these units are more than twice as efficient as standard electric water heaters and cost less than half the amount of money to operate. By using an Energy Star–rated heat-pump model, the DOE estimates that the average household can save almost $300 per year compared to a standard electric water heater. The units do cost more up front (about $1,200–$1,800), but the payback period is estimated to be only three years. They also can earn three points toward LEED certification, versus two for an electric tankless unit out of a total of six points available for water heating. The National Green Building Standard (NGBS) awards 7 points for heat pump units with a 1.5 EF and a maximum 10 points for 2.0-EF models.
A heat-pump water heater operates like a heat-pump HVAC system, borrowing heat from the atmosphere. An evaporator inside the tank uses refrigerant to absorb heat from the surrounding air and transfers it to a heat exchanger that heats the water inside the tank. Cool air is then expelled into the atmosphere. The tank includes electric heating elements to provide back-up heating if necessary.  The general layout of the appliance is similar to a conventional electric water heater, but there are some installation considerations. The integrated heat pump makes the tank a little taller than standard tank water heaters, and they require a condensate drain connection.
The biggest consideration, however, is that heat-pump water heaters require a whopping 1,000 cubic feet of ambient air to operate. Also, because the heat pump borrows heat from the surrounding air, homes in colder climates may require the unit to be installed in a conditioned space, and as a result, may not save as much energy. Basically, homeowners would be paying for another appliance to replace the heat being used by the heat pump—a fact that isn’t taken into consideration in efficiency ratings. At the same time, this means the unit may actually help the AC during warmer months.

Fueling Options

Generally, heat pumps are the most efficient tank-type choice for homes that don’t have access to natural gas. However, builders can still earn one LEED point or one NGBS point by installing a high-efficiency electric tank model. This includes 80-gallon units rated at 0.89 EF or higher, 50-gallon units at 0.92 EF or higher, or 40-gallon units at 0.93 EF or higher. Electric tank models are not covered under Energy Star, so check efficiency ratings closely. Builders may want to look for an electric water heater that has been certified by the Air-Conditioning, Heating, and Refrigeration Institute (AHRI) to ensure that the manufacturer’s high-efficiency claims are valid.
For areas where natural gas is more cost effective than electricity, builders may want to consider using a gas condensing tank-style water heater. Residential models are still in development, but some manufacturers have been marketing their commercial units for residential use, with some condensing models claiming thermal efficiencies of up to 96%—higher than even tankless, which are rated at about 80% thermal efficiency.
The general operating principles of a condensing model are similar to a standard tank water heater, but with better heat exchange. Instead of venting combustion gases outside like a standard gas tank water heater, a condensing model uses those gases to heat the water. The flue in these models also has been redesigned with a greater surface area so that the heat and combustion gases have a longer distance to travel, and, therefore, heat the water more efficiently. Basically, the tank heats up almost as quickly as it’s filled and can provide more continuous hot water, overcoming one of the usage drawbacks of conventional storage water heaters.
Like condensing furnaces, condensing water heaters produce condensation as a by-product of the combustion process, which means builders will need to install a condensation drain. Also, they require electricity and PVC pipe to accommodate the power venting.  Because current models aren’t rated as residential units, builders should know that they don’t have to meet FVIR or low-NOx requirements; however, as of press time, residential units were expected to launch by the end of 2010. Once available, the DOE estimates that homeowners can cut water heating energy use by 30% versus standard gas storage models and greatly reduce greenhouse emissions by taking about 75 therms off their natural gas bill. Installing gas-condensing models can earn two LEED points. And while the NGBS does not specifically mention condensing models yet, gas-fired units operating with an EF of 0.80 and higher are generally eligible to earn 10 points.
Conventional gas tank water heaters also are getting more efficient. In September, Energy Star upped its energy rating requirements for gas tank units from 0.62 EF to 0.67 EF. To meet those levels, manufacturers have to add power to their units, which is why most high-efficiency models are power vented or power direct vented. While these units are easily installed in new homes, they do require additional work in remodeling because the venting system needs to be replaced with PVC. There are a few innovative atmospheric models on the market that are Energy Star rated, but keep in mind that most standard atmospheric models are unable to reach anything above 0.63 EF. Even so, 40-gallon gas tank units with an EF of 0.61 or above will still provide one LEED point, and 60-gallon and 80-gallon models only need to reach 0.57 EF and 0.53 EF, respectively, to earn one LEED point.
Another detail to look for on gas water heaters is emissions. While only California has ultra-low NOx requirements (emission levels of less than or equal to 10 nanograms of nitrogen oxides per joule of heat output), some manufacturers are finding a cost benefit in manufacturing several of their units at low NOx rates. There are also several propane-fueled (LP) models available for builders who don’t have access to natural gas. The Propane Education & Research Council claims that LP water heaters are a greener option compared to electric water heaters. “Even though there aren’t any emissions from an electric water heater at the home site, there is a lot of coal being burned to make that electricity,” says Tom Jaenicke, energy advisor to the council.

Setting a New Standard

While tank-style units have certainly come a long way, they do have their limitations. When not in use, they produce standby losses, and, of course, they can run out of hot water. Tankless models address both of those issues, but they offer their own set of drawbacks. Tankless units have a longer payback period (15 to 20 years), and they don’t have stored capacity for high-demand periods. They also have minimum and maximum flow rates, which is especially challenging as more green homes adopt low-flow faucets and shower fixtures.
With shortcomings on both sides, it’s easy to see why manufacturers are now starting to come out with a new form of hybrid: tankless units with small storage tanks. They operate like a tankless unit, but a small buffer tank allows them to overcome some of the negative attributes normally associated with tankless models like minimum flow rates or “cold water sandwiches.” By capitalizing on the strengths of both tankless and storage water heaters, these units can reach efficiencies of up to 90%. However, because they represent a new water heater category, they do not yet qualify for Energy Star, LEED, or NGBS points.
Needless to say, this is an exciting time for the water heater industry. Innovation is at its peak and doesn’t show signs of leveling off anytime soon. A new federal rulemaking has required that as of April 16, 2015, newly built electric tank models with volumes of 55 gallons or greater achieve an EF of 2.05—an efficiency level that isn’t possible without heat-pump technology. Similarly, the ruling calls for gas tank models with volumes of 55 gallons or greater to have an EF of 0.8012, which requires gas-condensing technology. “The 2015 standards will change the way people look at large water heaters above 55 gallons,” notes Tommy Olsen, a senior product manager at Rheem.
While meeting the new standards will certainly require a lot of work on behalf of manufacturers, it’s good news for contractors. With a vast array of greener water heating options—including solar thermal—specifiers no longer have to rely on trends, but instead can choose a high-efficiency model that truly fits their needs. 

Thanks to Lisa Bonnema at Eco Magazine for her article.