“The replacement market for water heaters is expected to rise over the next two years, and we expect positive trends in the new water heater market as well,” he said. “The boiler market is forecast to remain fairly flat for the next several years; however, the percentage of condensing boilers and water heaters is expected to grow significantly.”

People are looking to save money in as many ways as possible, said Dan Rettig, project coordinator, Lochinvar LLC, adding the need for high-efficiency performance is definitely important.

“The cost of natural resources and operating costs are causing owners to look at every means possible to save on their monthly budgets,” he said. “If a return on investment can be shown, individuals are willing to pay the slightly higher upfront cost to get long-term savings.”

That return on investment is certainly a big key for homeowners, but Chuck O’Donnell, director of marketing, Laars Heating Systems Co., said people still are trending toward high-efficiency boilers, but only where the payback makes sense, especially given the reduction of available rebates and the low cost of natural gas.

“Some homeowners are choosing to go with near-condensing boilers that operate in the 85-87 percent efficiency range as a cost-effective alternative to full condensing,” O’Donnell said.

Energy efficiency isn’t the only thing being sought after. Jim Vaccaro, product development manager, Rinnai Corp., said homeowners are seeking space efficiency, as well.

“Both with condensing combi boilers for baseboard heat or tankless water heaters paired with an air handler, we’re seeing homeowners consolidate appliances to options that offer both hot water and domestic heat,” Vaccaro said.

Commercially Speaking

When it comes to boilers for commercial applications, O’Donnell said hybrid systems are becoming more popular.

“This is where the lead boiler(s) that handle the majority of the load are condensing and the remaining are installed as near-condensing to provide the capacity required during the coldest days of the year,” he said. “By installing this type of system, the installation costs are kept to a minimum but the majority of the operational savings are realized.”

Not only are residential systems seeing a growth in high-efficiency equipment, but so too are commercial systems, said Johnny White Jr., president and CEO, Taco Inc.

“In the coming years, we’ll see a greater push for increased system efficiency within the residential and commercial markets,” said White Jr. “That alone is perhaps the greatest and most forceful trend influencing manufacturers today.”

Additionally, O’Donnell said a boiler’s total installed efficiency is gaining more attention.

“The total energy, gas, and electricity that is associated with a boiler installation is becoming the measuring stick instead of thermal efficiencies alone. Commercially, engineers are targeting 95 percent thermal efficiencies, blower motor modulation, and reducing pumping costs associated with the boiler to optimize total energy, gas, and electricity usage.”

That sentiment was echoed by Rettig, who believes complete system efficiency will be the next big thing in the boiler industry.

Heating Up

When it comes to water heaters, Chuck Rohde, wholesale market manager, Water Heating Division, Rheem, said the water heater industry is optimistic about the residential real estate market’s growth potential. Rheem’s tankless water heaters are being prominently featured by builders promoting green living.

“In particular, we’re seeing more builders proactively educating buyers about the financial benefits of owning a new home with green features, compared to an existing property,” Rohde said.

High-efficiency water heating products are here to stay, said Pinto, citing the development of durable, easy-to-install-and-integrate products as one of many challenges for manufacturers. “Of course, price point and maintenance requirements will be important when specifiers and installers make product recommendations and low-maintenance requirements,” he noted.

Regulatory Landscape

While homeowners are mostly worried about the bottom line, manufacturers and contractors are keeping tabs on what lies ahead with the government.

In 2015, the DOE will implement new water heater efficiency standards, with the biggest change affecting storage water heaters that are 55 gallons or larger, Rohde said, as these units will now have to employ either heat pump or condensing technologies.

Paul Home, vice president of product and marketing, Eternal Hybrid Water Heaters, said the water heater market is offering higher outputs while shrinking the system’s physical dimensions and offering higher efficiency ratings — which is a trend most likely influenced by the upcoming regulatory changes.

“In the next five to 10 years, we are likely to see the traditional atmospheric water heaters being phased out. Higher-efficiency models equipped with dampers and fans will come into play,” Home said.

Being in line with those standards is key, but it must be done in a way that will not negatively impact the homeowner, Vaccaro said.

“Manufacturers will continue to engineer even more efficient technologies at a desirable price point,” Vaccaro said. “As government standards in certain regions of the country continue to mandate more stringent energy-efficiency requirements, larger segments of the population will become more familiar with, and adopt, tankless technology.”

And, as the general population becomes more familiar with water heater technology, manufacturers will still diligently work toward solutions. “Manufacturers will continue to drive toward higher-efficiency performance in leaner and greener footprints without compromising hot water output,” Pinto said.

Publication date: 1/27/2014 

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