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Considerations for Water Heater Sizing for Commercial Buildings

Oct 23, 2023 | Water Heaters

Select the right size water heater for your home

Water heaters are essential for daily operations in various types of commercial buildings, such as restaurants, hotels, healthcare facilities, and industrial complexes. They provide a continuous supply of hot water for various needs. Because of its importance, it is also necessary that every commercial establishment gets the right-sized water heater, and the right type suited for their establishment.

There are also important factors and things to look out for when choosing a water heater. This will enable business owners to find the right water heater to satisfy all the needs of their establishment.

Factors to Consider for Water Heater Sizing

Water heater sizing can be a complex process at times as it is influenced by several crucial factors. Understanding these factors is key to ensuring that the water heater meets the building’s needs without being excessive.Here are some of these factors:


Hot Water Demand

The first and most fundamental consideration is the building’s hot water demand. This simply entails understanding the number of fixtures, appliances, and processes that require hot water and estimating their simultaneous usage during peak periods.

Flow Rate Requirements

Flow rate is the rate at which water flows from the hot water outlet. It’s essential to match the water heater’s flow rate capacity with the building’s simultaneous hot water usage. A mismatch can result in inconsistent water temperature and reduced efficiency.


The desired hot water temperature is another important factor to put into consideration. Different applications may require varying water temperatures, and the water heater should be capable of delivering the needed temperature reliably.

Recovery Rate

The recovery rate indicates how quickly the water heater can reheat water after a significant use. This is crucial for applications with high hot water demand during short intervals, such as hotels and restaurants.

Types of Commercial Water Heaters

Commercial water heaters come in various types, each designed to meet specific needs and requirements in commercial settings. Here are detailed explanations and definitions of the common types of commercial water heaters:

Storage Tank Water Heaters

Storage tank water heaters, also known as conventional or tank-type water heaters, are the most traditional and widely used type of water heaters. These units feature an insulated water tank with a capacity of 30 to 50 gallons, serving as a reservoir for hot water, readily available when required.

A pipe is connected to the upper section of the storage tank to distribute hot water throughout the household. Tank storage water heaters are adaptable, functioning with either gas or electricity as their energy source. Generally, gas-powered models tend to be more cost-effective in terms of operation compared to their electric counterparts.


Lower Purchase Price
Storage tank water heaters are generally more affordable to purchase initially compared to some alternative water heater types. This can be a significant advantage for budget-conscious consumers.

Variety of Sizes
Storage tank water heaters come in a wide range of sizes, typically from 20 to 120 gallons or more. This versatility allows consumers to select a unit that best suits their hot water requirements, whether for a small household or a larger commercial building.

Efficient in All Climates
Storage tank water heaters are suitable for use in a variety of climates, from extreme cold to hot regions. They can efficiently heat water regardless of external weather conditions.

High Flow Rate
These water heaters are capable of delivering a high flow rate of hot water. This means you can simultaneously perform tasks such as washing dishes, doing laundry, and running a bath without running out of hot water.

Lower Installation, Repair, and Maintenance Costs
Because storage tank water heaters are widespread and used by a lot of people, installation, repairs, and maintenance are typically less expensive compared to more complex systems. Parts and expertise are readily available.

Gas-Powered Functionality During Power Outages
In cases where storage tank water heaters are powered by natural gas or propane, they can continue to function during power outages. This can be crucial for maintaining access to hot water during emergencies.


Higher Utility Costs
Storage tank water heaters tend to have higher utility costs due to standby heat loss. As the water in the tank cools and needs to be reheated, they may consume more energy, leading to higher bills. This is a significant disadvantage from an energy efficiency perspective.

Bulky Storage Tanks
The tanks in storage water heaters can be quite large and take up a considerable amount of space. This may limit installation options, especially in smaller homes or utility rooms.

Common Leaks as Units Age
Over time, the tanks in storage water heaters can corrode and develop leaks. This is a common issue as units age, potentially leading to water damage and the need for costly repairs or replacement.

Ongoing Maintenance Required
Like any appliance, storage tank water heaters require regular maintenance to ensure they function correctly and to extend their lifespan. This maintenance includes flushing the tank to remove sediment buildup and checking for potential issues.

While storage tank water heaters offer affordability, size options, and a proven track record in various climates, they do come with notable drawbacks, including higher utility costs, bulkiness, potential for leaks with age, and the need for ongoing maintenance. To make an informed decision, it’s essential to weigh these pros and cons against your specific needs and budget.

Tankless Water Heaters (On-Demand)

Tankless water heaters, also known as on-demand water heaters, do not store hot water in a tank. Instead, they heat water as it flows through the unit using electric elements or a gas burner.


Energy Efficient
Tankless water heaters are highly energy-efficient because they only heat water when it’s needed. This on-demand heating method eliminates standby heat loss, which is common in conventional tank water heaters, resulting in energy savings and lower utility bills.

Long Lifespan
Tankless water heaters typically have a longer lifespan compared to storage tank water heaters. With proper maintenance, they can last around 20 years or more, providing long-term value.

Space-Saving Design
The compact and wall-mounted design of tankless water heaters saves valuable space, making them an excellent choice for homes or buildings with limited installation space.

Eliminates the Possibility of Leaking or Burst Tanks
Since tankless water heaters don’t store water in a tank, they eliminate the risk of tank leaks, burst tanks, or water damage, which can be a common issue with storage tank water heaters.

Various Models Available
Tankless water heaters are available in both electric and gas (natural gas or propane) models, providing consumers with flexibility in selecting the fuel source that suits their needs and infrastructure.


Higher Initial Cost
Tankless water heaters generally have a higher upfront purchase cost compared to conventional tank models. This can be a barrier for those with budget constraints.

Higher Installation Costs
Installing a tankless water heater may require adjustments to existing gas lines or electrical systems, venting, and sometimes the installation of a dedicated circuit for electric models. These installation costs can be higher than retrofitting a conventional tank water heater.

May Need Multiple Units for Large Households
In larger households or buildings with high hot water demand, a single tankless water heater may not provide an adequate supply. Multiple units or larger, more expensive models may be required to meet the simultaneous hot water needs of a large household.

Tankless water heaters offer significant advantages such as energy efficiency, a longer lifespan, space-saving design, and the elimination of the risk of tank leaks. However, they come with higher initial costs, installation expenses, and the potential need for multiple units in large households, which should be carefully considered when making a choice based on your specific requirements and budget.

Heat Pump Water Heaters

Heat pump water heaters operate by transferring heat from the surrounding air to heat the water. They use electricity to move heat, making them highly energy-efficient.


Energy Efficient
Heat pump water heaters are highly energy-efficient as they transfer heat from the surrounding air to heat the water. This process consumes less electricity compared to traditional resistance heating methods, resulting in lower energy bills.

Environmentally Friendly
Heat pump water heaters reduce greenhouse gas emissions by relying on heat transfer from the ambient air, which makes them an environmentally-friendly choice. This is especially important for those looking to reduce their carbon footprint.

Low Maintenance
Heat pump water heaters typically require minimal maintenance, as there are fewer moving parts compared to some other types of water heaters. Regular maintenance may involve cleaning air filters and checking for any potential issues.


Climate Dependence
Heat pump water heaters work best in climates where temperatures stay between 40-90 degrees Fahrenheit. In colder or extremely hot climates, they may be less efficient, which can impact their performance and energy savings.

Higher Purchase and Installation Costs
Heat pump water heaters generally have a higher upfront purchase cost compared to traditional water heaters. Additionally, installation may require adjustments to existing plumbing and electrical systems, which can increase installation expenses.

Space Requirements
Most heat pump water heaters need a substantial amount of space, typically at least 1,000 cubic feet, to operate safely and at optimal efficiency. This space requirement can limit installation options, especially in smaller homes or utility rooms.

Heat pump water heaters offer significant benefits such as energy efficiency, eco-friendliness, and low maintenance. However, their performance can be influenced by the climate in which they are installed, and they come with higher initial purchase and installation costs, as well as space requirements that must be considered when choosing the right water heating solution for your specific needs and location.

Solar Water Heaters

Solar water heaters utilize energy from the sun to heat water. They consist of solar collectors (typically installed on rooftops) and a storage tank for the heated water.


Energy Efficient
Solar water heaters are highly energy-efficient because they utilize the sun’s energy to heat water. This reduces reliance on electricity or gas, resulting in significant energy savings and lower utility bills.

Environmentally Friendly
Solar water heaters are environmentally friendly as they reduce greenhouse gas emissions and decrease the demand for fossil fuels. Using solar energy helps to mitigate the environmental impact of water heating.

Low Maintenance
Solar water heaters typically require minimal maintenance. Regular maintenance may involve checking the system for leaks, ensuring proper insulation, and inspecting components for wear and tear.

Backup Heaters
Many solar water heaters are equipped with backup heating elements, such as electric or gas, which ensure that you won’t run out of hot water on cloudy or rainy days when solar energy may not be sufficient.

Long Lifespan
Solar water heaters often have a long lifespan, typically around 20 to 30 years or more, making them a cost-effective and sustainable investment in the long run.


High Upfront Costs
Solar water heaters have a higher initial purchase and installation cost compared to conventional water heaters. The cost includes solar collectors, a storage tank, and installation expenses, which can be a significant barrier for some consumers.

Performance Dependence on Climate
The efficiency of solar water heaters is dependent on climate and weather conditions. They perform best in areas with abundant sunshine and may be less effective in regions with frequent cloud cover, short days, or cold temperatures.

Solar water heaters offer significant advantages, including energy efficiency, environmental benefits, low maintenance, backup heating options, and a long lifespan. However, their high upfront costs and performance dependence on climate are essential factors to consider when deciding if they are the right choice for your specific location and budget.

Considerations for Water Heater Sizing for Commercial Buildings

Here are some considerations to keep in mind while choosing the right size of water heater for your commercial establishment:


Energy Efficiency Considerations

Efficiency is a paramount concern for commercial water heaters, as it directly impacts operational costs. Factors to consider include the insulation and heat loss of the system and the Energy Factor (EF), which quantifies a water heater’s energy efficiency.


Location and Installation Considerations

Proper placement and installation are important to ensure the water heater’s functionality and longevity. This includes assessing physical space, available space for the water heater, and ventilation requirements. Adequate ventilation is vital for safe operation and to prevent combustion issues.

Piping and Plumbing Considerations

The plumbing and piping system should be designed to accommodate the water heater’s specifications. This involves evaluating pipe diameter, routing, and ensuring the plumbing can handle the hot water demands of the building.

Cost Considerations

Selecting the right water heater involves analyzing both initial purchase costs and long-term cost savings. A more expensive, energy-efficient system may provide substantial savings over its lifespan, outweighing the initial investment.

Sizing Considerations for Different Commercial Applications

Sizing considerations for different commercial applications play a crucial role in ensuring that the water heating system can meet the specific hot water needs of each type of establishment. Here’s a more detailed breakdown of these considerations:

Restaurants have high hot water demands, especially in the kitchen for dishwashing, and in restrooms for customer and employee use. Sizing should take into account the peak hours when both kitchen and restroom demand is high. Choosing a water heater with a high recovery rate is best to ensure a continuous supply during busy times.

Hotels experience variable hot water demand, with peak loads during check-in and check-out times when guests may need showers, and for laundry and dishwashing. Sizing should accommodate these peak periods to ensure guests have a comfortable experience. Storage tank water heaters with large capacity or multiple tankless units may be used to meet variable demand effectively.

Healthcare Facilities
Healthcare facilities, including hospitals and clinics, have unique requirements due to strict sanitation guidelines and specialized equipment used in the environment. Sizing must consider the need for hot water for sterilization, medical equipment, and patient care. High-temperature water may be necessary, and whatever type of water heater system should be capable of delivering this.

Industrial Settings
Industries often have specific processes that require hot water for various applications, such as cleaning, heating, or chemical reactions. The type and temperature of hot water required should dictate the sizing, and some industrial processes may need industrial-grade water heating solutions.

Offices typically have moderate hot water demand, primarily for restrooms and kitchens.Sizing should account for the number of employees, the size of the office, and the frequency of hot water use in these areas. Tankless water heaters or smaller storage tanks may be suitable for such settings.

Types of Fuel Sources

When choosing a fuel source for a commercial water heater, businesses should consider their specific needs, infrastructure, and budget. Factors like energy availability, local utility costs, environmental considerations, and the facility’s hot water demand should all be carefully evaluated to determine the most suitable fuel source for a commercial water heating system that aligns with their goals and operational requirements. Here are various fuel sources for heaters, each with its advantages and disadvantages:


Electric water heaters are relatively easy to install, making them a convenient choice for various commercial applications. They have good energy efficiency, as they directly convert electrical energy into heat, which is then transferred to the water. Electric water heaters are suitable for areas with reliable electrical infrastructure, ensuring a consistent supply of hot water.

However, operating costs for electric water heaters can be high, especially in regions with expensive electricity rates. This is due to the cost of electricity required to heat the water. Electric water heaters are often less energy-efficient than some other options because of potential standby heat loss when the unit is not in use.

Natural Gas

Natural gas water heaters are a cost-effective and reliable option for commercial water heating. They provide efficient and consistent hot water by burning natural gas to heat the water. Natural gas is often readily available in urban and suburban areas, making these heaters popular in regions with access to natural gas pipelines.

Sometimes, installation of natural gas water heaters may require the presence of gas lines, which can be a limitation in areas without access to natural gas infrastructure. Gas prices are also subject to fluctuations, meaning that the cost of operation may vary over time.

Propane Heaters

Propane water heaters are well-suited for off-grid locations where natural gas is not an option. They offer a reliable source of hot water, similar to natural gas units, and can be more energy-efficient than some electric models. Propane is stored in tanks on-site and burned to heat the water.

It is also important to consider that propane prices can be volatile, impacting the long-term cost-effectiveness of these units. Additionally, the storage of propane requires safety precautions, and the need for refilling propane tanks can be an inconvenience.


Solar water heaters are environmentally friendly and sustainable, utilizing free energy from the sun to heat water. They have the potential for long-term cost savings, as they reduce reliance on traditional energy sources. Solar water heaters are ideal for locations with ample sunlight, making them a green and efficient choice.

Unfortunately, high upfront installation costs can be a barrier for some businesses. Additionally, solar water heaters rely on sunlight, which may make them less effective in areas with inconsistent or limited sun exposure. Cloudy days and nighttime can result in reduced hot water production.

Hybrid Systems

Hybrid systems combine multiple energy sources, often including electric or gas backup, to increase efficiency and reliability. They can offer cost savings over time by optimizing energy use based on demand. These systems are a flexible and efficient choice for commercial water heating.

However, hybrid systems can be more complex and expensive to install and maintain compared to single-source systems. Proper system integration is essential for optimal performance, and businesses may need to invest in training and regular maintenance to maximize efficiency.

Safety and Regulatory Compliance

Commercial water heaters, like any other industrial or commercial equipment, must adhere to building codes and safety regulations to ensure their safe and efficient operation. The following factors are essential to consider:

Building Codes

Commercial water heaters should adhere to the specific building codes and regulations set forth by the local authorities. These codes ensure that the installation and operation of the water heater meet the safety and structural requirements of the building.

Ventilation and Combustion Air Requirements

Adequate ventilation is essential to ensure that combustion byproducts, such as carbon monoxide, are safely vented to the outside. This minimizes the risk of hazardous conditions inside the building.
Also, sufficient combustion air supply must be provided to the water heater to support the combustion process. This is critical in preventing incomplete combustion and the associated safety risks.

Safety Measures

Here are safety measures that a

Pressure Relief Valves
Commercial water heaters should be equipped with pressure relief valves that release excess pressure to prevent the tank from rupturing. These valves are a critical safety feature to protect against potential explosions or leaks.

Temperature Controls
Accurate temperature controls are necessary to prevent water from reaching scalding temperatures, which can cause burns or other safety hazards.

Anti-Scald Devices
In some applications, such as hotels and healthcare facilities, anti-scald devices may be required to ensure safe water temperatures at fixtures.

Gas Leak Detection
In the case of gas-powered water heaters, gas leak detection and shut-off systems should be in place to prevent gas leaks and potential fire or explosion hazards.

Regular Maintenance
Regular maintenance is essential to ensure safety and efficiency. Inspections should be conducted to check for issues like corrosion, leakage, or malfunctioning safety devices.

Inspections and Permits
Commercial water heater installations should undergo inspections to verify that they comply with local codes and safety regulations. These inspections may be carried out by local authorities or third-party agencies.

To ensure compliance with local building codes, permits may be required before the installation of a commercial water heater can begin. The permitting process helps to verify that the installation meets safety and environmental standards.

Frequently Asked Questions


How do you size a water heater for a commercial building?

Sizing a water heater for a commercial building involves assessing hot water demand, flow rate requirements, temperature needs, and recovery rate. These factors are analyzed in the context of the specific application, such as a restaurant, hotel, or healthcare facility.


How do I choose a commercial water heater?

Choosing a commercial water heater requires evaluating factors like energy efficiency, initial purchase costs, long-term savings, fuel sources, and regulatory compliance. It’s also essential to match the water heater type to the specific application’s needs.

How do I calculate what size water heater I need?

To calculate the size of the water heater needed, you must first determine the hot water demand, flow rate requirements, temperature requirements, and recovery rate.

What factors should you consider when choosing a water heater?

When choosing a water heater, consider factors such as hot water demand, flow rate requirements, temperature needs, recovery rate, energy efficiency, cost considerations, fuel sources, safety and regulatory compliance, and the specific requirements of the building.

Which seven factors should be considered in the design selection of hot water systems?

Design selection of hot water systems should consider hot water demand, flow rate requirements, temperature requirements, recovery rate, energy efficiency, cost considerations, and safety and regulatory compliance.


How do you determine the efficiency of a water heater?

The efficiency of a water heater is determined by the Energy Factor (EF), which quantifies the appliance’s energy efficiency by considering factors such as standby heat loss and recovery rate. A higher EF indicates greater efficiency.

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