Foodservice Equipment Reports

High-Efficiency Water Heaters Make The Grade

You specify Energy Star equipment, replace bulbs with CFLs and rinse with low-flow prerinse nozzles. You're aware of where you're using energy in your kitchens, and how you can save. But did you know one of your biggest energy hogs is quietly and constantly guzzling gas in your utility room?

Yes, it's your water heater, and the gas load on that standard model in a full-service restaurant is almost as much as the gas load on the entire cook line, says Don Fisher, president and CEO of Fisher-Nickel Inc., which runs Pacific Gas & Electric's Food Service Technology Center in San Ramon, Calif.

'You tend to think of a water heater as just one piece of equipment,' says Fisher, 'but that one piece of equipment burns' the gas of many. If your concept is using standard water heaters, you can save money—a lot of it—by switching to a high-efficiency condensing model, and Fisher's FSTC has the numbers to prove it.

Until now if you thought about water heaters you might've been put off by the higher cost for an H.E. unit. Though the price difference between standard efficiency and H.E. has narrowed in the past few years—due in part to lower stainless prices and maturing manufacturing technology—H.E. units can cost $1,500 to $3,000 more than standard, Fisher estimates. So the return needs to be compelling.

Fortunately, it is. In short, a new H.E. water heater can pay for itself in less than two years, says the FSTC, making all your energy savings after that drop to the bottom line. How much savings, you ask? You could save 10% to 20% in energy costs using an H.E. unit, according to this FSTC data. Read on for details.

Starting At The Beginning
In a three-month test set up in a 192-seat, full-service chain restaurant in their hometown, FSTC staffers set out to discover how much energy H.E. units really save and if the higher efficiency is worth the cost.

The test site had a 100-gal., 400,000 Btu/h standard-efficiency water heater that was connected to a hot water recirculation system. For the test, the FSTC installed a 100-gal., 300,000 Btu/h H.E. (condensing) unit alongside the existing unit. The units were plumbed so that they could operate independently or simultaneously in either a series or parallel configuration, and so that the recirculation line could be configured to return to either tank's inlet.

'Our initial idea was to test each of the heaters independently,' says Amin Delagah, FSTC project engineer. But at 300,000 Btu/h, the restaurant operator was concerned that the H.E. unit might not recover quickly enough to meet peak hot water demand (demand here ranged from a low of 1,400 gals./day to a high of 3,700 gals./day). And while neither heater alone could have kept up with the really high-peak demand days, those days were pretty rare. Nonetheless, the operator wanted both tanks operational during the test to ensure backup.

With the two tanks plumbed, FSTC got down to the business of capturing data and crunching numbers. In addition to water meters on the cold water supply line to each tank, staffers attached temperature probes to measure the temp of the water going in and going out of each tank. Flow meters were attached to measure the amount of gas flowing to each heater, and data acquisition loggers throughout recorded water usage, gas usage and temperatures at 5-min. intervals.

Armed with this data, techs calculated energy efficiency by dividing the energy transferred to the heated water by the gas consumed by the water heater.

Variations On A Test
With water heaters humming, FSTC staffers collected data based on three scenarios. The first (1a) let the standard-efficiency water heater operate as originally installed with the hot water recirculation line going into its inlet. (This was the least ideal setup in terms of energy usage.)

The second scenario (2a) collected data on the H.E. water heater as it operated upstream of (and unaffected by) the standard. In this case, the recirculation line returned directly to the H.E. unit's inlet.

In case 3a, the H.E. water heater operated upstream of the standard again, but this time the recirculation line bypassed the H.E. tank and entered the standard heater inlet. This data captured the H.E. numbers without the interference of the recirc line.

With initial data collected, the next step was to retest all three scenarios in what the FSTC called an optimized mode. Designated 1b, 2b and 3b, the optimized mode put a timer on the recirculation pump so that instead of running continually, the pump was shut off for 10 hours a day when the restaurant was closed.

The other optimizing step only impacted the standard tank: Techs switched the flue damper switch on the top of the tank to the 'on' or 'automatic' position so that the damper opens and closes as needed. Early versions of flue damper switches were notoriously unreliable, according to Fisher, so operators would just set controls to 'hold open damper.'

'You don't want [the flue damper switch] set in the open position,' says Fisher. 'That allows heat to escape all the time, and your standby temperature loss is substantial.'

FSTC staffers went on to test each of the six variations for two weeks. Table 1 shows the results of all six tests, including system efficiency, projected annual gas consumption, cost and the ultimate savings. These numbers are based on California rates of $1.20/therm and on 365 days/year operation, 2,083 gals./day hot water flow with an 80�F temperature rise. The numbers also include local electricity costs attributed to the blower motor on the H.E. water heater ($0.15/kWh. in Calif.). So while your results may vary, Fisher says there's no question you'll see a return on your investment within a year or two on the higher-cost H.E. After that, your savings are gravy.

A couple of interesting things as you look at the table: Notice that when the hot water recirculation line returns to the inlet of the H.E. water heater and runs constantly (2a), it's not any more efficient than the standard unit in the optimized mode, with the recirculation pump on a timer.

Fisher and company hypothesized that the hot water returning to the H.E. tank from the recirculation line reduced the efficiency of the H.E. heater. The warmer temperature of that returning water prohibited the heater from extracting as much heat from the flue gasses as it would on colder incoming water; ergo, lowered efficiency.

As soon as the recirculation line to the H.E. unit was turned off for 10 hours a day, the H.E. tank became 7.5% more efficient than the optimized standard. If you compare the H.E.'s optimized performance (3b) to that of the standard heater in its original installation mode (1a), efficiency improves almost 17%! Translate optimized performances of both water heaters into dollars, and the H.E. unit was projected to save from $950 to $1700 (10% to 20%) a year compared to standard-efficiency water heater performance.

The recirculation pump really affects the daily efficiency of water heaters—and this was an interesting finding, according to Delagah. 'We're looking into discovering if there's a way to install H.E. water heaters so that the need for the recirculation system is eliminated altogether,' he says. 'At the very least, recirculation systems need timers—that's just a standing recommendation.'

The Upshot
With the H.E. water heater clearly outperforming the original standard water heater, the FSTC recommended the operator opt for H.E. units in the future. In fact, the techs suggested the operator to buy two 100-gal., 300,000 Btu/h H.E. units and set them up in parallel operation so that the restaurant always had a backup water heater. Although the initial purchase price is higher, the payback—especially with a timer on the recirculation pump—is quick.

Note, too, that when you specify an H.E. water heater, you must specify PVC venting because the condensate from an H.E. unit is caustic; it'll eat through metal. Fortunately, PVC is much less expensive than stainless, saving installation costs and making payback even quicker.

More tests are coming, says Fisher, and some data is available on water heaters used in quick-service settings. One thing the FSTC hopes to explore more fully is hot water usage in different types of restaurants and the impact that has on your choice of H.E. water heater capacity and style (tank or tankless.) But for now, the FSTC wants you to know the ROI on H.E. water heaters is here.

A Tankless Job
During the standard- vs. high-efficiency tank-style water heater comparison, which was conducted in 2006, techs from Pacific Gas & Electric's Food Service Technology Center wondered if, when and where an operator might use new tankless water heating systems. Rather than store hot water, tankless units heat water on demand through a system of heat exchangers.

Throwing a tankless unit into the mix was beyond the scope of the FSTC test described in our main story, but based on information they gathered from the Gas Appliance Manufacturers Association, tankless heaters were only nominally more efficient than standard-efficiency tank water heaters in '06.

'Only one of the tankless models at the time was rated as high efficiency,' explains Fisher. 'Saving space was the real draw because these units are really small and hang on a wall.' In the test site, where the ultimate recommendation was the installation of two, 100-gal., 300,000 Btu/h H.E. tank-style water heaters (for a total of 200 gals. storage capacity and 600,000 Btu/h), the research team realized it would take three or four tankless units to meet the restaurant's peak hot water demands—and that wasn't considered practical or cost effective.

But the jury's not out on tankless. While tankless might not work for a restaurant that uses a lot of hot water, it might work well for smaller venues or those who don't specify warewashing and hot water recirculation equipment, according to Fisher. 'Since our tank-style water heater test, we've seen several new high-efficiency tankless models come on the market.'

Tankless water heater efficiency has already been put to the test in one quick-service restaurant, and we'll deliver a report on those results in a future issue. In the meantime, go to and click on the Tankless Water Heater Report, which was released in late '07.

Sticking With Standard? Do This Now!
Even if you're not ready to replace your existing standard-efficiency, tank-style water heaters with high-efficiency units, you can still save cash by optimizing your standard versions, according to Pacific Gas & Electric's Food Service Technology Center. Here's how.

If you have a recirculation pump running through your units (this line continually circulates hot water to all your hot water outlets so that it's always 'at the ready'), you should install a timer on the recirc pump that will turn the system off when the restaurant is closed. In the water heater test described in our main story, the FSTC pros shut the pump down for 10 hours a day. Turning off the pump greatly reduces heat loss from the pipes, which allows the heater to conserve heating energy when there's no demand.

Next, if your heater has a flue damper, set the damper control on 'automatic;' do not set it on 'hold open damper.' 'You want the damper to open and close as needed,' says Amin Delagah, FSTC project engineer. 'If the damper stays open all the time, you're constantly losing heat.'

Finally, insulate your hot water lines so they lose less heat on the way to your faucets and equipment. And the next time you need to replace a water heater, go with a high-efficiency unit with a timer-equipped recirculation pump to get the most out of your energy dollars.

Note: The Food Service Technology Center program is funded by California utility customers and administered by Pacific Gas & Electric Co. under the auspices of the California Public Utility Commission. This test is part of the Emerging Technology Program. For the full report go to and click on Commercial Hot Water Heating Systems in Restaurants-An Emerging Technology Field Monitoring Study.

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