Volume 26, number 2, September 2012

Centralized production of hot water: A sustainable choice

In fall 2011, Datech Group gave a mandate to engineering firm Dupras Ledoux* to conduct a comparative study on the centralized natural gas production of hot water versus individual electric water heaters. The principal objective of the study was to verify the costs of purchasing and installing hot water production in residential buildings of 40, 100, and 200 units. The energy bill was analyzed later in order to confirm the cost-effectiveness of the natural gas option.


Analyses were conducted on three types of building: 40, 100 and 200 units. A conventional geometric building was chosen in order to simplify construction costs. The budgeted costs shown below include the reductions from plumbing contractors, but do not include the volume rebates for the electric water heaters purchased. The mechanical room was put on the roof to reduce the cost of installing the chimney.

The reference model for the electric water heater is the superior quality Giant 60 gallon Cascade Model 172B. The $982 cost per unit includes purchase and installation, plus all the piping and accessories needed.

Table I: Electric water heater

Unit price for the supply and installation of an electric water heater
40 gal, 152ETE (standard quality) $769
60 gal, 172ETE (standard quality) $835
60 gal, 172B Cascade (superior quality) $982
60 gal, Super Cascade (best quality) $1,030

The reference model for natural gas is a low-mass water heater connected to one or several hot water tanks with integrated heat exchanger. This type of configuration can produce hot water efficiently while reducing the volume stored. Also, the insulated piping is in stainless steel and copper. The cost per unit, including all piping and accessories, is $1,818 for 40 units, $1,159 for 100 units, and $1,044 for 200 units.

Table II: Centralized hot water

40 units 100 units 200 units
Pumps $6,200 $7,500 $9,000
Chemical treatment $2,500 $2,500 $2,500
Expansion tank $1,200 $1,800 $2,400
Boiler $20,000 $26,000 $32,000
Chimney $8,000 $10,000 $11,500
Natural gas $1,500 $1,500 $1,500
Tank with integrated exchanger $3,300 $6,600 $9,900
Plumbing (piping, labour, etc.) $30,000 $60,000 $140,000
TOTAL $72,700 $115,900 $208,800
Cost per unit $1,818 $1,159 $1,044

Simplicity, savings and space gain with natural gas

Opting for centralized natural gas hot water production involves extra costs, but the advantages outweigh the disadvantages. For example, the energy bill is lower with natural gas, as is shown in Table III.

Table III: Energy bill

40 units 100 units 200 units
Natural gas consumption at 90% efficiency (m³) 11,733 29,333 58,667
Electricity consumption (kWh) 111,120 277,800 555,600
Total cost − electricity $8,345 $20,863 $41,726
Total cost –natural gas $6,557 $14,539 $27,626
Savings from choosing natural gas $1,788 $6,324 $14,099

Besides the lower energy bill, the speed of execution, plus the ease of installation during the construction phase are not insignificant advantages. The installation and maintenance of a hot water production system is much simpler with a centralized water heater. In the case of electric water heaters, one has to be installed in every unit and they have to be replaced every ten years – often an insurance company requirement. As for a centralized natural gas water heater, only one space is needed for its installation, its useful life is 15 years – and there is only one to be replaced. In addition, the repair of broken pipes and leaks in a centralized system is reduced to a bare minimum. Figure 1 shows the simplicity of the installation.

Figure 1: Diagram of the two options

At a time when each square foot is important for purchasers, there is a gain in space of at least 9 ft2 per unit, with continuous and abundant hot water literally on tap . Gaz Métro’s various financial assistance programs for efficient appliances offer financial assistance ranging from $1,200 -$20,000 toward the purchase and installation of hot water heaters with 90% or more efficiency.

For a sustainable and efficient residential building , choosing natural gas for centralized hot water production is a good solution. While the cost of purchase and installation is higher than for individual hot water heaters, the savings in operation are undeniable and building management is decidedly simpler.

Marie-Joëlle Lainé, Eng.
Datech Group

* The study conducted by Dupras Ledoux does not include data on the amounts of financial assistance from Gaz Métro or energy efficiency programs .