Commercial Electric Water Heaters: To Tank or Not to Tank

Before we evaluate tankless versus storage tank solutions, let’s start with a little history. The first tank-based water heaters were invented in 1889 in Pittsburg by Edwin Rudd. Although tankless water heaters seem like a more recent invention, they were developed just 40 years later in 1929. As you might guess, they were created for situations where space is limited. Tankless systems have evolved greatly since their inception, particularly over the last 35 years. Both tank and tankless water heaters have their own set of advantages and drawbacks, which is why both are in use today. Deciding which configuration is best for your needs depends on several considerations, so a better understanding of the two solutions can help you make the right decision. Let’s dive in.

How Much Space is Available?

Space usage is always a key consideration when evaluating any mechanical/capital equipment purchase. Some benefits of a tankless system are that they take up less space than a conventional tank installation and work well for lower-demand, point-of-use applications.

As the demand for hot water increases, so does the size of the heating unit, and the space required to support the proper power infrastructure. A tank system may be best in demanding applications or ones with higher forecasted future needs.

Consider the Electrical Infrastructure

Tankless systems demand increased power over storage-based solutions. They usually require modern high-capacity electrical infrastructure that consists of increased amperage (and possibly voltage), and higher capacity cabling, wiring, and circuit breakers. Keep in mind that a tankless solution might cost more than initially anticipated due to electrical infrastructure upgrades in retrofitting situations. Additionally, although tankless heaters themselves take up less space, you may find you need more space for the high-capacity electrical requirements. For new buildings that have a modern higher-capacity infrastructure already in place, it often makes more sense to go tankless.

Inside a Hubbell Tankless Model HX/TX

Define Upfront and Lifetime Costs

When evaluating your options for hot water solutions, it’s important to look at both upfront AND lifetime costs. For tankless systems, initial costs tend to be higher, due to the need for a high-capacity electrical infrastructure. Electrical system upgrades are often needed, particularly with older facilities. Day-to-day costs can be greater too since most businesses tend to utilize hot water during peak electricity rate times. With a tank-based system, you can minimize this by heating and storing hot water during off-peak hours.

Some, but not all, tank-based systems may have shorter lifespans than tankless models. This is often due to the degradation of the tanks and their linings, as well as other factors. Utility bills could be higher with a tank system since it’s constantly heating the water, rather than heating it only when needed.

Is a Tankless System Greener?

Tankless heater systems are thought of as a green solution when compared to tank-based ones. It’s true! Tankless systems create hot water on demand very quickly and efficiently, however, they are subject to standby heat loss, while storage tanks have made significant strides against heat loss in recent years. For instance, Hubbell’s storage tanks lose about one degree a day, thanks to their highly efficient insulation and design.

So, Which is Better?

To put it simply, it depends. The best approach for a particular application requires both a very good understanding of current needs and solid forecasting of potential needs while evaluating all cost and efficiency factors. Ultimately, you’ll need to select a system that is economically feasible both short and long-term, and of course, scalable.

Not sure what approach is best for your needs? Take a look at our electric products here or contact one of our application specialists to help you choose the optimal solution.