Marketplace Need

Tankless water heater systems are beginning to make inroads into the American residential market for both new construction and retrofit applications. Natural gas utilities can benefit by offering these state-of-the-art products as an additional method to retain and grow water heating customer base. Three existing brands, all developed in Japan, best suit residential applications and demands. The need for unbiased testing outside of a manufacturer ’s environment will provide for real world data allowing utilities to make informed brand selection and effective marketing to consumers.

Objective

To provide real-world application data relevant to “energy consumption”, “flow rates with respect to changes in desired temperature” and “flow rate/energy consumption at anti-scald temperatures” of the three popular tankless water heater systems. In addition, the test will allow for the operating parameters —Ambient Air Temperature, Supply Water Temperature, and Supply Water Pressure —for all three units to be in parallel. Standards of the test will simulate hot water consumption in a residential environment.

Customer Benefits

Through unbiased testing of the three top brands of tankless water heater systems, participants can effectively communicate the benefits of natural gas tankless water heater systems as compared to traditional tank water heaters fueled by either natural gas or electricity. For natural gas utilities currently marketing or planning to market this innovative product, the data from this study will prove invaluable for advertising and sales efforts.

Market Segmentation

The residential customer represents the greatest customer base for most natural gas utilities. Considering the impact of water heating on the average customer ’s consumption, retention of existing and development of new water heating customers is critical for stability and growth of natural gas utilities.

Market Potential

Current United States Department of Energy census data states that 52.6 million households utilize natural gas for water heating. This represents 1.29 quadrillion therms of natural gas consumption. Every natural gas-to-electric conversion of water heaters represents a significant impact on market share.

Program Plan

Real numbers from real applications in a product-neutral environment will allow for development of factual marketing efforts for increasing customer loyalty and attracting new residential customers for natural gas water heating. Data disseminated from the study will be adaptable to meet the needs of the individual utility so that local energy costs can be plugged in and applied to marketing efforts.

Testing procedures are based, in part, on procedures developed by Exelon Services Federal Group of Knoxville, Tennessee utilized in the Water Heater Systems Test Part I which compared a natural gas 40- gallon water heater and the like-model electric version with the Rinnai Continuum Tankless Water Heater. The Water Heater Systems Test Part II is designed and managed by Okaloosa Gas District. Each of the three test units will be individually metered and will utilize identical water consumption. Each unit will be tested for “energy consumption”, “flow rates with respect to changes in desired temperature” and “flow rate/energy consumption at anti- scald temperatures”. At the conclusion of this study, Okaloosa Gas District will have the ability to conduct similar studies on natural gas products.

Product Champion

Gary Long
Vice President of Marketing Okaloosa Gas District
Phone: 850-729-4720 office
E-mail:garylong@okaloosagas.com

ESC Staff Liasion

Eric Burgis
Director of Commercial & Residential Markets
Phone: 215-508-5415
E-mail:eburgis@escenter.org