Commercial Water Heaters

Water heating accounts for approximately 20% of natural gas use in commercial applications.i Installing a high efficiency water heater can result in thousands of dollars in energy bill savings, provide better comfort and control, and lower water and sewage costs. To ensure customers receive the benefits of high efficiency, the Sponsors of Mass Save® have created the Commercial and Industrial Water Heater Initiative, a market transformation initiative designed to promote and improve the availability of high efficiency commercial water heaters.

The Sponsors of Mass Save have collectively invested over $5 million in the initiative, resulting in increased availability and improved knowledge of high efficiency water heaters and ultimately yielding significant energy bill savings for customers. The high efficiency water heaters made available through this initiative will lower customers’ natural gas bills by over $36 million.ii

Lifetime Energy Bill Savings

Increased High Efficiency Purchases
Increased Availability
Increase in stock of high-efficiency water heaters available for purchase ensures high efficiency options are readily available for replacement situations, which account for the majority of commercial water heater sales.
Improved Knowledge
Increased high efficiency trainings have led to a more knowledgeable installer-base, ensuring installation requirements are not a barrier to selecting high-efficiency and that customers are informed about high efficiency options available.

i 2012 EIA Commercial Buildings Energy Consumption Survey.
ii Based on average lifetime energy savings for high-efficiency commercial water heaters and the average commercial rate for natural gas in Massachusetts.

Eligible Equipment

There are several high efficiency water heating options available to commercial customers. See here for incentive information and efficiency requirements.

Condensing storage water heaters
utilize the heat from exhaust gas to heat water efficiently. Condensing storage water heaters can support multiple, simultaneous uses of hot water and are preferred for emergency replacement situations because of the ease of installation. Field-supplied materials are limited to piping and fittings near the heater because these water heaters use the same gas line as the unit they are replacing.

On-demand tankless water heaters
provide a constant supply of hot water and are not subject to standby energy loss since they heat water only when needed. Tankless water heaters are well-suited for facilities with restricted or limited space because they do not require a storage tank.

Indirect water heaters
consist of a storage tank that connects to a building's main furnace or boiler to heat water. The energy stored by the tank allows the furnace or boiler to turn off and on less often, saving energy. Because they can be installed without additional exhaust piping, indirect water heaters tend to have lower installation and maintenance costs than traditional water heaters.

Condensing hot water boilers
utilize heat from exhaust gas to heat water efficiently. Because they produce a high output, condensing hot water boilers can be a good option for facilities with high-volume hot water demands.

Where to Purchase High Efficiency Water Heaters

If you are interested in purchasing a high efficiency water heater, contact your contractor to learn more about the high efficiency option available to your business. See a list of participating distributor partners here.

Frequently Asked Questions

How are funds for the market transformation program spent?
Funding is spent in a variety of ways that ultimately help customers have better access to high efficiency water heaters so that they can benefit from the lifetime energy bill savings. Below are a few examples of how funds are spent:

  • Hosting training sessions to educate contractors about the benefits of high efficiency as well as the differences in installation.
  • Identifying high efficiency water heating technologies and working with industry partners that manufacture and sell those technologies to make them readily available to customers.
  • Offsetting the additional costs associated with stocking high efficiency equipment so that it is available for emergency replacement scenarios.
  • Creating market competition to naturally reduce the cost of high efficiency to make high efficiency more attractive for our customers to purchase than standard efficiency.

What are contractor training sessions?
Contractor trainings sessions educate contractors about high efficiency water heaters, including the benefits of high efficiency, how to install different types of high efficiency equipment, what applications different types of high efficiency water heaters are best suited for, and so on. This results in contractors who are better able to identify opportunities to save their customers money over the equipment lifetime, enhance performance, and identify any potential issues before they occur.

How did you calculate how much energy bill reductions you saved your customers?
Energy bill savings are calculated based on total natural gas savings of high efficiency units compared to standard efficiency units and the average commercial rate for natural gas:

Lifetime Energy Savings = Commercial $/therm rate x (annual energy use of a standard efficiency - annual energy use of a high-efficiency) x equipment life expectancy

High-efficiency is expensive. Why should I buy it?
The energy used during the lifetime of a water heater is, on average, several times greater than the initial purchase price. The average high efficiency water heater has a lifetime of 10-15 and is roughly 20% more efficient than traditional water heaters. With high energy costs, the energy savings can add up. Depending on the type of water heater and usage, the estimated payback can be as low as two years.

Which products are high efficiency, and where can I find them?
There are a variety of high efficiency water heaters available. Types of high efficiency water heaters include: condensing storage water heaters, tankless water heaters, indirect water heaters, and condensing hot water boilers. You can also ask your contractor about what high efficiency water heating options are right for your business.