DAVID SEITZ

I have received many requests from individuals and companies asking that I provide information on tankless water heaters, both gas and electric. I have tried in the following to provide what I consider to be the most basic and important information. The rest of the story is covered in the SEISCO CHALLENGE report available on the SEISCO web site www.seisco.com.

I spent over 22 years of my life in my own mortgage banking; real estate development and construction companies. I first used tankless water heaters in 1987 in a high rise, resort condominium at South Padre Island. All this fun, before I started the 15-year endeavor to develop the first electric tankless water heater truly suitable as a replacement for the tank in a whole house application. Fifteen years and 5 U.S. patents later we are extremely proud to have accomplished that goal

Equally important was and is my dream that tankless should be the enabling technology that makes solar thermal, heat recovery and other systems not only work satisfactorily but more efficient. We have accomplished that with the much-appreciated support of DuPont Engineering Polymers.

I will preface this discussion with a simple analogy of improvements to our home.

All of us would like to have a 30-year roof, but many of us can’t afford one. Even if we could, other than lasting longer, the roof would, in all likelihood, neither save us money on energy or water, nor would it provide us with additional day-to-day lifestyle benefits.

The tankless water heating system can easily last 20 years or more with normal maintenance. That’s twice as long as the standard tank heater. Add to that the lifestyle benefits of being able to enjoy endless hot water when you want it and for as long as you need it, while saving money on energy costs, and water. The tankless water heating system, although more expensive initially, is definitely within the financial reach of most of us and the returns are quite significant.

There are so many advantages to the use of on-demand or "tankless" water heaters that we could literally spend all day discussing them. A particularly significant one is being able to recover very expensive space. You can literally pick up a whole closet. To add this closet during a remodel would probably cost more than the heater. The financial and personal benefits of the tankless system overwhelmingly support the move to this technology over the tank.

Since you are starting out trying to understand on-demand water heaters you will want to consider any or all of the following: (Don’t forget to look at the SEISCO CHALLENGE report available at www.seisco.com)

Issue 1. NEW HOMES should always start with TANKLESS. It is so simple and inexpensive in relationship to useful life and benefits. The only real issues are sizing and location. Most of the difficult issues utilizing tankless are experienced when one is trying to retrofit an existing home from a tank to tankless. These are discussed in the following.

Issue 2. GAS vs. ELECTRIC. DO YOU STILL BELIEVE THAT HEATING WATER WITH GAS IS LESS COSTLY THAN ELECTRIC? You may be very surprised to know that in all likelihood that isn’t so. In fact if you are a family of two, using a gas tank type water heater vs. the electric tankless, it most definitely isn’t so. In all but the exceptional case, the cost for the gas heater just keeping water hot, BEFORE YOU USE THE FIRST DROP, will exceed the cost of the total actual hot water that is used when heated by electric. Today’s cost of gas continues to rise at a much greater rate than electricity. Since electricity is generated by many means, it is derived from multiple energy sources and as such not as vulnerable to price fluctuations as single fuel sources such as natural gas. USA TODAY, in its cover story in the May 31, 2002 issue’s MONEY Section, explained the potential crisis looming for natural gas. The bottom line is, regardless of the additional NEW production; the total monthly production capacity is gaining very little or declining as a result of overall decline in production from existing wells. Demand however continues to increase rapidly. The problem (depleting wells production base) is similar to a swimming pool with a large hole in it draining out water while someone is trying to fill it with a straw. The result is simple; demand will exceed supply. The article suggests, and I agree, that we in the U.S. are currently in the same situation with natural gas that we were in 1969 with daily oil production. Our production of oil peaked in 1969 and today has dropped from 9 million to currently 4 million barrels per day. Simply put that means there is obviously going to be pressure on natural gas prices as a "single energy source" that are unlike those for the much broader sources for generating electricity, including coal, hydro, wind, solar, fuel cell and more..

The National Association of Home Builders Research Center did an excellent report named the "Performance Comparison of Residential Hot Water Systems" for the National Renewable Energies Laboratories on Residential Water Heating Systems, which included the electric tankless, the perceptions vs. the reality. Their tests in 2001-2 showed that in a high volume user’s home, using only a single SEISCO, being the tankless tested; the heating capacity was exceeded less than 1% of the total time hot water was required. Even then a slight adjustment in flow was the only corrective action needed. This report covers the all the significant issues including perception vs. reality and even the problems with reliability with earlier units. Go to www.toolbase.org and do a search for SEISCO, and then go to report (not the "model") item 12. On the report page numbered "31" you will find the footnotes that tell you that the SEISCO was used as the tankless water heater. This is a joint site for the NAHB Research Center and HUD’s PATH (Partnership for Advancing Technologies in Housing and is an incredible site for new technologies.

As a native TEXAN I love natural gas and don’t think we should be burning it, as we do in an unregulated fashion and particularly to heat water. There are too many other very important applications for gas that are also more favorable environmentally.

Issue 4. Sizing. There is a lot of smoke and mirrors in this one. First of all advocates of gas promote the idea that every home should have an on-demand gas water heater capable of producing 6 gallons per minute of hot water. Wrong, even the very high performance gas versions offered will only raise the incoming water temperature at this flow rate 50º F (read the fine print). As previously discussed the installed cost for these heaters is almost prohibitive and in most cases you could install two electric SEISCOs together, which will provide better performance at less cost than one of these gas versions. Don’t confuse these high performance gas models with the gas versions currently seen at retail stores, as these retail versions will typically only provide moderate performance. The 50-gallon storage tank contains 35 gallons of useable hot water so if 6gpm was really required, your normal hot water supply would be depleted in 6 minutes or the time it takes for just ONE shower.

Finally and very important to remember is the fact that good design of a water heating system does not always suggest removing the tank. In fact, where large peak flows are required or desired such as filling a spa tub, or body spa multiple shower heads, it is very desirable to keep some hot water storage and add the SEISCO tankless as an enabling technology to insure that you always have enough hot water. It makes absolutely no sense to "over design" any tankless system for infrequent use when the choice is as simple as filling a tub a little slower. Alternatively the combination of storage and tankless can be much less expensive and ultimately more efficient. Proper design is the key to developing the right hot water system.

IT’S NOW THAT WE NEED TO DISCUSS THE ISSUES OF THE COSTS OF PERFORMANCE VS. EXPECTATIONS.

The standard shower will flow at 2.5 gallons per minute and the shower temperature is typically 104º. Some think they take showers at hotter temperatures and are very surprised when they actually measure the temperature. In the winter when the incoming water temperature is 55º F, the average shower requires 1.95 gpm of 120º F hot water mixed with the cold water. In the warmer areas or times of the year when the incoming water temperature is 75º F the shower would require approximately 1.7 gallons per minute of 120ºF hot water from your heater. Keep in mind that this colder incoming water is the reason that tank heaters run out of water quicker in the winter than the rest of the year. With the tankless you won’t run out but you may be limited to how many hot water uses you can perform at the same time.

When you put this in perspective, unless taking two showers simultaneously all year, even in the coldest times of the year, is a requirement the consumer would do very well with a heater that can increase the incoming water temperature 65º F when the flow rate out of the water heater is 3 gpm or 180 gallons per hour. (Tank heaters are rated for first hour recovery. Do you have a 180-gallon water heater now?) This means that when the incoming water is as low as 55ºF it would be heated to 120º F. at this flow rate. Since you are mixing the hot with cold, this would easily take care of one person showering while still providing enough extra hot water to take care of someone simultaneously using hot water to brush their teeth, shave etc.

The NAHB "Performance Comparison —" report determined that even in a high use home the hot water usage would exceed the ability of the SEISCO RA-28

(28kW) heater less than 1% of the time. Utility then is not the issue but rather expectation. If you have a body spa or feel you want to always take two showers at the same time or fill a spa tub at full blast then you will want to get more power. Again as I said the simplest way to do that is just place the SEISCO down stream of your existing tank so that you have a volume of pre-heated water for those peak flow times. Alternatively you can purchase one of the gas tankless rated at 200,000+ btu or place two Seisco tankless heaters in parallel.

Again, there are so many of us "Active Americans" running around and families of three or less, that will see little, if any benefit from the additional cost required to install a gas or electric tankless heater rated for more than a 60-65º increase in water temperature at a flow rate of 3 gallons per minute (gpm) from the water heater. In order to obtain this performance a gas tankless must have an efficiency rating (EF) of 82% and be rated at least for 116,000 btu per hour and an electric at 95,500 Btu’s per hour or 28kW. This difference in Btu rating may be confusing but gas is rated at the heat output of the burner whereas the electric for the heat that is going directly into the water.

In the preceding example a home that has an electrical service rated at 200 amps would in all likelihood not have to be upgraded but the gas service would need to be upgraded to accommodate a minimal 3/4" gas supply line. If you use a gas tankless don’t skimp on the service because that is the same service you probably need for space heating, dryer and/or cooking and you don’t want the appliances to be competing for the required pressure. The cost for installing the electric heater, assuming a clear access from the location for the water heater to the electric panel box, should not run over $250-450 plus the retail cost of the heater at say $625. The gas heater installation will cost as much or more for the increase in gas service alone.

Recently, I participated on a radio show when a caller called in and expressed his disappointment at having paid over $2,500 for the installation of a gas tankless water heater. He paid $1,200 for the gas tankless heater he could have bought for less than $600 and paid over $1,500 for the gas service upgrade.

To make it even more unpleasant the gas heater, which has obvious limitations for location, had to remain in this consumer’s garage far from the master bath and by the time the hot water got to the bath, the water had lost at least 10º F. from the pipe transportation losses. Every consumer needs to understand that pushing hot water through long runs of cold uninsulated pipes running through concrete slabs results in big energy losses from the water they paid to heat. It is thus important to be able to locate ANY water heater as close to the major points of use as possible. Every consumer should contact the manufacturer or someone with whom he has confidence to obtain manufacturers suggested retail and avoid this kind of situation.

Issue 5: Expectations: Now is where we need to speak of expectations. What if one is building a home and wants to take the two showers simultaneously or alternatively fill the tub at 6 gpm of tempered water (hot and cold mix of 360 gallons per hour-fills a big tub fast)? Now we need a heater with a capacity of 3.9 gpm with a minimum of a 65º rise in water temperature. This will require a gas on-demand tankless water heater with an 82% (EF) that is rated at a minimum of 165,000 btu’s per hour or an electric (or two in parallel) with a total rating of 134,946 btu per hour or 39.5kW. (Two Seisco model RA-18’s). Even better, alternatively one 40-50 gallon storage tank water heater with a 28kW installed downstream from the tank.

In this example, if the consumers home is over 2,500 sq.ft., and the dual SEISCO electrics are chosen, his home’s electrical service will probably need to be rated at 225 amps or more (for the whole house not for the heater). If the combo tank and SEISCO are chosen then the electrical service requirement could be less. Regardless, however, of the size of the house, it will almost definitely require an upgrade to the gas service (just for the heater).

Decision time. The electric tankless water heating system should, with periodic simple maintenance, last and serve the consumer well for 20 years saving energy, water and money. With this in mind, the consumer needs to compare the cost of upgrading the gas service vs. upgrading their homes electric service (if required). The upgrade of the gas is only to accommodate the gas heater but the upgrade to the electrical provides benefits for the entire home. There will be times when the decision for gas or electric should be made on the basis of cost vs. overall benefit to the value of the home, the versatility of location etc. If the consumer’s existing home has underground electric service to the house it will be more expensive to upgrade than overhead and the combination tank and SEISCO is the best choice.

Issue 6: Venting, combustion air and location issues: These issues must be addressed up front. Gas tankless water heaters are generally located outside the home in other parts of the world. The reason is simple- it is safer. Locating the tankless heater in new construction is easy but in a retrofit it is more difficult. The consumer should look at all the variables. How close can he locate the heater to the major points of hot water use and what are the total costs one vs. the other? In most cases the electric version such as the SEISCO is designed as a basic model to take care of a family of two to four with a single heater. Different models are combined in parallel or with storage tanks to get the power and heating performance desired. Most times two electric versions are about the same price or less than one of the higher Btu rated gas versions. A Seisco plus a tank combination is virtually always the best and least expensive for high volume requirements.

Issue 7: Safety. Electric water heaters have been shown to be safer through years of government studies but gas technologies are safe too.

Issue 8: Environment: My pet peeve. So many very uninformed people including some agencies take the position that heating water with gas is more efficient than electric. This, in my opinion, is more smoke and mirrors. Their argument is that there is less loss of the fuel source (natural gas) when it is delivered directly from the wellhead (pipeline) to the appliance than in the conversion of natural gas to first produce electricity that is then delivered to the appliance. To explain this, older generators of electricity used to burn coal lose 66% of the energy in the conversion to electricity. Thus even with an electric on-demand heater 99% efficient, only approximately 33% of the total initial energy source can be utilized. (34 x 99%)

On the other hand a gas heater, as the argument goes, that is 50% efficient would be able to utilize 50% of the original energy source since there was no loss as for electricity in the initial conversion.

That sounds good until we recognize that today’s gas electric generating turbines are providing over 50% efficiency, much better than 34% efficiency so often cited. Even more important is the fact that a growing percentage of electricity is generated by natural gas putting more pressure on gas prices. The source of electric generation, however, is so diverse that the use of electricity to heat water actually saves the very fuels we need to save, being oil and natural gas. The sources for electric generation include nuclear from which we get approximately 20% of our total energy, hydro in which we get approximately 10%, coal approximately 40+ percent and the balance a combination of energy sources including natural gas, oil, wind, geothermal etc. Coal gasification technology has reached the level where coal can be converted to gas and burned to generate electricity as clean as natural gas if not cleaner.

GUESS WHAT, WE HAVE MORE ENERGY STORED IN OUR COAL RESERVES IN THE U.S. THAN ALL THE KNOWN OIL RESERVES IN THE WORLD. Why then should we burn natural gas in an unregulated fashion in our homes to heat water? SAVE OUR IMPORTANT FOSSIL FUELS AND OUR AIR! HEAT WATER WITH ELECTRICITY AND ENCOURAGE THE DEVELOPMENT OF MORE RENEWABLE ENERGY SOURCES.

Issue 9: Heating with Renewable energy: Better idea. Solar thermal with the on-demand tankless water heater as the whole house back up. This one is uniquely the SEISCO, so I better tell you that up front. The SEISCO is being used and has been evaluated as the back up to solar for years. The use of this combo increases the efficiency of the total solar thermal system by at least 40%. HUD/PATH studies prove that it provides savings over the use of storage tank heaters of 60% or more. To be able to back up solar or any other system that delivers pre-heated water, the back up needs to be provide passive heating, heating only the water actually used and only to the temperature increase as may be required. Tanks are poor back ups as they will turn on their heating sources as soon as the water temperature drops below the set point. Then the stored water is heated by the tank’s heating source and not the solar. The solar thermal panel is more efficient as the temperature difference required increases. So if the water is already heated, the solar panel loses efficiency. Finally you should not use the type of tankless heater with a flow switch that heats water that is already hot. You can create a dangerous scald potential for the user with this type of combination.

Issue 10: Use hot water for space heating and shift the electric load to "off-peak". The SEISCO has received U.L. listing under its Standard 834 for Space Heating Equipment and Electric Boilers and is being used to heat homes through radiant floor heating in many areas of the U.S., Canada even in Israel. Since the slab acts as a storage reservoir for heat, the on-demand Seisco needs only turn a few hours per day, and primarily during the night. The computer controlled SEISCO can be programmed to heat only at off-peak times and the consumer can enjoy very low time of day electric rates that are more competitive than gas.

Issue 11: Health: Storage Tanks are great breeding ground for Legionella. The on-demand is not. It is literally purged at each use. At shut down the water temperature in the tankless water heater will increase, from the latent heat, to above the 120º F normally required to kill Legionella. This is the case even if the water temperature delivered to the consumer during use had been at a very safe 105º F

Issue 12: Save Water. There is a great potential for saving water and additional money by installing the on-demand heater (for the whole house) very near the master bath and near the kitchen. We waste over 10,000 gallons of water a year, that we had previously paid to heat, running down the drain (after it had cooled off) waiting for new hot water to reach the fixture. Don’t design with various on-demand heaters at each location. The technology has far exceeded this European concept. Our life style requirements dictate a system that will serve the whole house from a central location. The booster needs for the master bath needs only be sized to take care of immediate needs for shower and sink. The tankless electric SEISCO is controlled by temperature and not flow (no flow switch) as heaters using outdated technology. The SEISCO monitors the incoming water temperature and as soon as the hot water from the primary heater, even a tank, reaches the SEISCO, it turns off. We need to minimize the water we waste running it down the drain. Water will soon prove to be more precious than the energy we have been discussing. There will probably be a time in the future when the computer controlled heaters such as the SEISCO will be used by water companies, at certain times, to regulate or cities to limit the amount of hot water used.

Issue 13: Save Energy and Money. In either case the consumer can save over $100 per year on energy and water costs depending on the installation, and application while at the same time recovering very valuable space often worth more than the cost of the tankless water heater and installation.

I will close by saying that summarizing some of the important caveats in purchasing a tankless water heater.

It is very important that the consumers realize that all electric tankless whole house units except the SEISCO will often create strobing light flicker as a result of modulating high electrical loads. The SEISCO’s methods for very balanced loads are the subject of the most recent patent. (refer to web site www.seisco.com) In addition most electric whole house heaters other than the SEISCO will create a large amount of mineral deposits because of over boiling that occurs at shut down. These other heaters typically operate one element at full power every time the heater is used. When the hot water flow is turned off the latent heat of that single element always turned on full power causes the water temperature in its chamber to boil out minerals. The SEISCO virtually eliminates this issue through power and heat distribution referred to as "power sharing". This unique SEISCO cure is again the subject of a SEISCO technology patent. All too often electric on-demand heaters that are sold as whole house heaters even in major discount building supply stores are actually two or three point of use heaters that have been tied together to obtain total power rating. This should be avoided as it is a little like putting a 450 horsepower engine on a tricycle. It just doesn’t have the structure for the application.

Gas tankless manufacturers often promote very high gallons per minute flow and this can be very deceptive when they are speaking of flows in which the water temperature can only be raised 50º F. If your incoming water temperature is 55º the resulting 105º is not hot water and after piping temperature losses the water arriving at the fixture will often lose 10º or more. 95º F is just luke warm water. BEFORE YOU BUY DETERMINE YOUR DESIRED REQUIREMENTS THEN READ THE SPECIFICATIONS.

Finally, gas versions are touted as being 82+% efficient. This is at the maximum burner efficiency, which is tested at or near full flow. As the heater is modulated to lower power levels, which are more commonly required for normal water heating applications, the efficiency drops rapidly as the fuel to air mixture changes. Keep in mind a gas tankless is similar to a very low-end gas boiler. The burners for any gas appliance lose efficiency over time unless properly maintained. The gas heat exchangers lose efficiency quite rapidly in hard water applications and having to descale a heat exchanger is not always a chore that the consumer wants or should attempt to do himself. It is unlikely that the gas tankless will operate with an average of more than 65% efficiency over the first 5 years and possibly less thereafter. This efficiency is very close to that of new gas storage tank heaters. Since electric always delivers it’s heat directly into the water there is no future loss. The SEISCO was determined by the Tennessee Valley Authority in its study to be 99.3% efficient so a combo Seisco and gas or electric storage tank is still very efficient.

This is not meant to say that the gas heater will not work satisfactorily under optimal conditions; however, very few if any one properly cleans out there gas tank heater or burners. It is interesting to note that the DOE wants these gas heaters to be tested with an equal amount of high flow and low flow draws of water. The manufacturers are trying to get that changed to a disproportionate number of high flow draws (where the out of the box efficiency is best) to low flow draws. The fact is that the Performance Comparison Study done by the NAHB Research Center suggests just the opposite since over 90% of the hot water usage is a low to moderate flow rates. So don’t expect high efficiencies, as they probably won’t exist.

IF YOU PREFER GAS, YOU SHOULD ASK THE MANUFACTURER TO PROVIDE THE BURNER EFFICIENCY CURVE THROUGHOUT THE ENTIRE RANGE OF MODULATION. This means, what is the heaters burner efficiency if you are only using 25% of its power (very common) vs. 50% vs. the maximum. Remember the heater can never be more efficient that the combustion efficiency of the burner–brand new.

ISSUE 14: Piping Losses. Un-insulated hot water distribution pipes can cost you over 25% of the energy you have paid for to heat water. Piping losses are one of if not the single biggest issues to hot water heating. No matter what kind of water heater you select insist that your hot water lines are well insulated. You will be amazed at the difference and save water as well.

In closing, the true life cycle costs and efficiencies should be considered so that a proper evaluation of the long-term benefits can be made.

Let me know if I can be of further assistance.

Sincerely,

Microtherm, Inc.

Home of the SEISCO

David E. Seitz, CEO

deseitz@attglobal.net