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Banked Tankless Systems: A Lifesaver in Critical Applications

Combining, or banking, multiple tankless water heaters in a variety of commercial applications guarantees hot water when it’s needed most, while also minimizing energy consumption.


By Jason Fleming

Hot water is the lifeblood for many commercial applications, especially during peak hours of operation. A five-star restaurant that runs out of hot water during dinner hours will quickly lose its ranking — and its customers. A hotel that cannot promptly meet the morning hygiene needs of all its guests will be increasingly vacant. A health club that blasts members with ice-cold showers after a hard workout will soon see its locker rooms emptied.

These facilities’ livelihoods rely on having high volumes of hot water whenever demand gets high. At the same time, each needs far less hot water during non-peak hours. A restaurant doesn’t need to do much cooking or washing in the middle of the afternoon; nor are there many people showering at hotels or health clubs during that time.

Traditional storage-tank-type water heaters can prove problematic during both peak and non-peak hours. During peak hours, the amounts of hot water they can deliver are inherently limited by their storage capacities. During non-peak hours they continue to waste energy, heating large volumes of hot water that go unused.

An alternative option — combining (or “banking”) several commercial tankless water heaters with modulating technology can meet all the hot-water needs, at all times, in the most energy-efficient and reliable way possible.

How it works

When banking multiple tankless water heaters in a commercial application, no hot-water demand is too large if the system is sized properly. The heaters will communicate with one another to generate enough output to meet demand and to “smooth” that load among the various operating units in a way that extends system life.

The typical firing sequence is as follows:

  • The first tankless water heater activates as soon as there is a demand for hot water within the system; i.e., someone turns on a faucet or a shower.
  • This first unit continues to provide all the needed hot water until demand exceeds 80 percent of its capacity. Depending on the system installed, this is customizable. The default setting on some systems is for two heaters to approach capacity before a third fires. Also, some systems allow a “quick staging” option in which heaters need only reach 50 percent of capacity before the next fires.
  • Once demand surpasses the first unit’s preset capacity, it is equalized among two or more units while still meeting high-volume demand.

Modulating burner technology can track and meet any hot-water demand with pinpoint accuracy, matching energy consumption to present requirements. If only the BTUs from one water heater are needed, then only one water heater will activate. In contrast, a conventional water heater or boiler without a modulating burner will continue short cycling to maintain the programmed temperature in the tank, leading to efficiency losses and unstable temperatures.

Some manufacturers offer prefabricated rack systems of up to 24 units that are controlled by a single, remote thermostat. However, for even larger applications, multiple systems can be linked together to meet demand. The ratio of the maximum BTU output of the entire system to the minimum BTU output of a single water heater in the system is called the turndown ratio: the higher the turndown ratio, the greater the system’s flexibility in meeting hot-water demand efficiently. For example, a bank of 24 tankless water heaters with a BTU range of 15,000 to 7.2 million would have a turndown ratio of 480:1 to meet fluctuating hot-water demand.

Benefits of banking and modulation

Banking multiple units with modulating technology yields the following benefits for building owners and facility managers:

Peace of mind through redundancy

Banking units means never having to worry about one faulty heater stopping all hot-water production. The system is designed always to meet hot-water demand. If one unit is down, the others will modulate appropriately to deliver the required hot water. If, in the extreme case that all remaining heaters have reached maximum demand, the flow rate will be reduced slightly to lower the BTU input and maintain the set-point temperature. In a conventional, storage-tank system, failure of a single unit can put the entire hot water operation in jeopardy.

Less wear and tear

Since only as many water heaters fire as are needed, and the load is equalized among those that do, there is less strain on each individual unit in a banked system. For example, instead of one storage-tank water heater operating for 10,000 hours, banked tankless water heaters that modulate to meet the same demand might each operate for only 5,000 hours. All else being equal, each individual tankless unit in a banked system, therefore, has a longer life expectancy than a storage-tank type, or even a non-banked tankless unit.

Tankless units will also have less sediment buildup due to the absence of stored water. It is advised to filter incoming water to maximize quality and reduce the toll on the tankless system.

No standby losses

Storage-tank water heaters, whether condensing or non-condensing, have standby losses. That’s because they fire even when there is little-to-no, hot-water demand; e.g., afternoons and late nights at restaurants and hotels. These standby losses accumulate each hour and, over time, can result in millions of wasted BTUs.

Installation savings

Specifiers, installers and building owners may have concerns about the costs associated with installing multiple tankless units. However, the upfront cost of a commercial tankless system may actually be lower than its tank-type equivalent. It is also possible to supplement the tankless system with one or more storage tanks. This will allow fewer tankless units to be installed without losing the ability to modulate BTUs. There is also no need to oversize a tankless system as a safety precaution, since it will deliver the specified amount of hot water.

Another option is to order a prefabricated rack system that streamlines installation costs by pre-assembling, pre-plumbing, and pre-programming multiple units in a standard manifold for a particular application. The rack can also come pre-engineered with isolation valves, system and pump controllers.

If condensing heaters are chosen, their cooler exhaust gases will allow for PVC venting — instead of stainless steel — further reducing costs. In warmer climates, an outdoor installation eliminates the need for venting entirely.

The bottom line: Hot-water supplies must never be compromised in a commercial application. If they are, building owners will face, at the very least, angry tenants, customers or clients; at the worst, health code violations that can shut down operations. A banked tankless water heater system is a guarantee against such doomsday scenarios, ensuring uninterrupted, cost-effective supplies of hot water during those moments that count the most.

Jason Fleming serves as Vice President of Sales and Marketing for Noritz America, based at company headquarters in Fountain Valley, Calif. He can be reached at:

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